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Grading the Senate stimulus plan

Friday, January 30, 2009

Reportcard (2) A few days ago,we looked at how tax experts and economists rated the House's stimulus plan

Now it's the Senate's turn.

And just like the House version, the Senate's proposal gets a C+ grade.

Actually, the Tax Policy Center (TPC) gave the Senate Finance Committee plan 14 different grades on 14 separate provisions in that legislative body's proposal. As I did with the grades that TPC issued the House Ways and Means measure, I averaged them.

"Each grade depends on both timeliness and targeting," says TPC in its notes on Senate stimulus report card. "To receive an A, a provision would have to begin quickly and go primarily to people who would most likely spend it or to businesses that would most likely use funds to retain workers or expand.better than what Republicans offered."

No Senate stimulus provision earned an A. Neither did any one in the House version.

Another so-so grade: Again like the House counterpart, two provisions got B+ ratings -- the "Making Work Pay" tax credit and an increase of the refundable portion of the child tax credit.

Seven provisions got some sort of C grade.

Two barely passed.

Incentives to hire unemployed veterans and disconnected youth got a D, just like in the House bill. And the much ballyhooed attempt to fix the alternative minimum tax received a D- from TPC analysts.

AMT addressed ... sort of: The Senate's ATM patch, says the report card, is "neither timely nor targeted; makes no sense as economic stimulus."

Len Burman, writing at TPC's TaxVox blog, elaborates on the Senate AMT measure:

"The AMT is always patched because 30 million angry Americans would howl in protest if it weren't. But the annual fix was shoe-horned into the Senate fiscal relief bill Tuesday afternoon anyway.

Don't get me wrong. I hate the AMT. It's pointlessly complex, inefficient, and unfair.  Every year we patch it (temporarily increase the exemption levels) in a bizarre game of tax policy chicken. Its purported revenue (roughly 1 trillion dollars over the next ten years) masks the depths of our looming budget challenges and makes further income tax cuts look more affordable than they really are.  We should follow the advice of President Bush's tax reform panel and repeal the AMT while broadening the regular income tax base to offset the revenue losses. Or just replace it with a simpler alternative.

Of course, we won't do either anytime soon."

You can see all the grades and the reasons behind them in the TPC's Senate Stimulus Plan Report Card.

More on the plans: You can read more on the stimulus proposals from the Associated Press, CNN Politics, Reuters, Financial Times, CNN Money and Washington Post.

Report card clip art licensed from
the Clip Art Gallery on DiscoverySchool.com

Posted on Friday, January 30, 2009 at 04:42 PM in Economy, Politics, Stimulus plan, Taxes | | Comments (1)

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henry

taxes are legal theft of people's money... you want something, pay for it yourself..... the polits are unconvicted extortionists....

Posted by: henry | Saturday, January 31, 2009 at 11:04 AM

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