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NEW YORK — Michael A. Peterson, President and CEO of the Peter G. Peterson Foundation, commented today on Senate Budget Committee passage of tax legislation, and on reports that Senators are considering adding a “trigger” mechanism to the bill:
“The potential addition of a revenue trigger is the latest in a list of fiscal gimmicks that are being included in this bill.
“Instead of designing a backstop in case a policy fails, lawmakers should just pass tax legislation that’s fiscally responsible and permanent in the first place. They can do that by using reasonable assumptions for economic growth and being realistic about the effects on the budget.
"While arbitrary provisions like triggers, phase-ins and expirations may make the bill appear more fiscally responsible, they actually serve to mask its likely costs and also undermine the goal of growing the economy. Businesses and individuals need certainty to plan and invest efficiently. Permanence and simplification are fundamental principles of smart tax reform. Provisions and rates that drift in and out of the code make our tax system even more complex and uncertain than it is now.
“There are many ways to actually pay for this bill. The ten-year budget window includes $16 trillion of tax expenditures and $47 trillion in outlays. Eliminating just another 10% of those tax breaks or about 3% of spending would cover the costs of this legislation. Tax reform should grow the economy, not the debt, and there are many credible ways to make this bill fiscally responsible.”