1 Tax Reform in the United Statesby Jon Forman Alfred P. Murrah Professor of Law University of Oklahoma Norman, Oklahoma & ATAX Fellow, UNSW Tax-Work-in-Progress Seminar University of Sydney August 2, 2011

2 Overview The Budget Outlook Taxes Short-term Long-termThe Current Tax System Recent Tax Reform Proposals

3 U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2010), at 2,

4

5 Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (January 2011), at xv,

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7 Congressional Budget Office, Four Observations about the Federal Budget (March 7, 2011), at 6

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9 Getting back in the blackAustralian Government, Budget Overview (2011), at 8,

10 Australian Government, Budget Overview, Budget Statement 1, at 1-13 (2011),

11 Short-Term: Projected Budget TotalsBudget Totals, $billions 2011 Receipts $2,228 $39,084 Outlays $3,708 $46,055 Deficit $1,480 $ 6,971 Budget Totals, % GDP 14.8% 19.9% 24.7% 23.5% 9.8% 3.6% Public Debt, % GDP 69.4% 75.3% Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (January 2011), at xii,

12 Congressional Budget Office, Four Observations about the Federal Budget (March 7, 2011), at 7,

13 Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (January 2011), at 86,

14

15

16

17 Congressional Budget Office, Four Observations about the Federal Budget (March 7, 2011), at 8,

18 U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2009).

19 Congressional Budget Office, The Long-Term Budget Outlook (June 2011), at xi,

20 Sources of Growth in Federal Spending on Major Mandatory Health Care Programs & Social Security, 2011 to 2035 (% GDP)      Congressional Budget Office, The Long-Term Budget Outlook (June 2011), at 11,

21 Congressional Budget Office, The Long-Term Budget Outlook (June 2011), at 62,

22 U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2010), at iii,

23 U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2010), at viii,

24 U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2010), at 12,

25 U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2010), at 18,

26 Congressional Budget Office, The Long-Term Budget Outlook (June 2011), at 80,

27 Congressional Budget Office, The Long-Term Budget Outlook (June 2011), at 80,

28 Taxes Overview of the federal tax system Recent tax reform proposals

29 Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011, Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011, at 70,

30 Congressional Budget Office, The Long-Term Budget Outlook (June 2011), at 64,

31 Tax-to-GDP ratio, 2008 OECD Tax Database,

32 Edward D. Kleinbard, Muddling Through the Budget Crisis (January 6, 2011); OECD Tax Database,

33 Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011, at 72,

34 Congressional Budget Office, Trends in Federal Tax Revenues and Rates (December 2, 2010), at 10,

35 U.S. Standard Deductions, Personal Exemptions, and Simple Income Tax Thresholds, 2011Unmarried individuals Heads of household with one child Married couples filing joint returns with two children Standard deduction $5,800 $ 8,500 $11,600 Personal exemptions $3,700 $ 7,400 $14,800 Simple income tax threshold $9,500 $15,900 $26,400 Rev. Proc , IRB 297,

36 Tax Rate Schedules for Various Taxpayers, 2011Rate bracket Unmarried individuals Heads of household with one child Married couples filing joint returns with two children 10 $0 to $8,500 $0 to $12,150 $0 to $17,000 15 $8,500 to $34,500 $12,150 to $46,250 $17,000 to $69,000 25 $34,500 to $83,600 $46,250 to $119,400 $69,000 to $139,350 28 $83,600 to $174,400 $119,400 to $193,350 $139,350 to $212,300 33 $174,400 to $379,150 $193,350 to $379,150 $212,300 to $379,150 35 Over $379,150

37 Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011, at 71,

38 Proposed Budget ReceiptsReceipts, $billions 2011 2014 Individual income taxes 998 1,671 Corporation income taxes 279 398 Payroll taxes 819 1,092 Excise taxes 73 86 Estate and gift taxes 11 14 Custom duties and other receipts 47 75 Total receipts 2,228 3,442 GDP $15,034 $17,258 Receipts, % GDP 14.8% 19.9% Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (January 2011), at 87,

39 Center on Budget and Policy Priorities, Top Ten Tax Charts (April 14, 2011),

40 U.S. Payroll Tax Rates: Selected Years2 4 6 8 10 12 14 16 18 20 1940 1960 1980 2010 Year Percent paid jointly by employee and employer Medicare Social Security

41 Center on Budget and Policy Priorities, Top Ten Tax Charts (April 14, 2011),

42 Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011, at 66,

43 Center on Budget and Policy Priorities, Top Ten Tax Charts (April 14, 2011),

44 Top 10 Income Tax Expenditures, 2012 (Billions)Health insurance exclusion $184 Mortgage interest deduction 99 401(k) plans 68 Step-up of basis at death 61 Exclusion of net imputed rental income 51 Deductible nonbusiness state and local taxes other than on houses 49 Employer plans 45 Charitable contrib. (other than health & education) 43 Capital gains (except agriculture, timber, iron, coal) 38 Exclusion of interest on tax-exempt bonds 37 2012 Federal Budget, Analytical Perspectives, Chapter 17, Tax Expenditures, Table 17-3, 44 44

45 Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (January 2011), at 97.

46 Office of Management and the Budget, Budget of the United States Government, Fiscal Year 2010 (2009), at 11, 46 46

47 Productivity and Real Income20 Facts About U.S. Inequality that Everyone Should Know,

48 Rising Poverty U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2009, at 14, (Current Population Report No. P60-238, September 2010),

49 Congressional Budget Office, Trends in Federal Tax Revenues and Rates (December 2, 2010), at 24,

50 Rising Inequality

51 Congressional Budget Office, Trends in Federal Tax Revenues and Rates (December 2, 2010), at 15,

52

53 Shares of Total Business Returns and Net Income, 1980-20071990 2000 2007 S Corporations Returns 4% 8% 11% 12% Net Income 1% 14% Partnerships 10% 3% 18% 23% Sole Proprietorships 69% 74% 72% 17% 26% 15% C Corporations 9% 6% 80% 62% 53% Internal Revenue Service, Statistics of Income,

54 Expired Tax Provisions 2010First-time homebuyer credit Making work pay credit Build America Bonds Estate and gift tax regime for 2010 Joint Committee on Taxation, List of Expiring Federal Tax Provisions, (JCX-2-11), January 21, 2011,

55 Expiring Tax Provisions 2011Tax credit for research and experimentation expenses Increased AMT exemption amount Increase in expensing to $500,000/$2,000,000 Above-the-line deduction for qualified tuition and related expenses Temporary 2% payroll tax cut Joint Committee on Taxation, List of Expiring Federal Tax Provisions, (JCX-2-11), January 21, 2011,

56 Expiring Tax Provisions 2012Most 2001 and 2003 tax cuts 35% maximum rate 10% minimum rate $1,000 child tax credit 15% capital gain and dividend rates Expanded earned income tax credit American opportunity tax credit Reduced estate and gift taxes Joint Committee on Taxation, List of Expiring Federal Tax Provisions, (JCX-2-11), January 21, 2011,

57 Center on Budget and Policy Priorities, Top Ten Tax Charts (April 14, 2011),

58 Recent Tax Reform ProposalsPresident’s Economic Recovery Advisory Board, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation (August 2010). National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December 2010). Bipartisan Policy Center, Restoring America’s Future (November 2010). Co-Chairs: Pete Domenici & Alice Rivlin

59 Recent Tax Reform ProposalsBipartisan Tax Fairness and Simplification Act of 2011 (2011). Senators Ron Wyden and Dan Coats Rep. Paul Ryan, The Roadmap Plan (2010). National Taxpayer Advocate, 2010 Annual Report to Congress (December 31, 2010). President Obama’s FY2012 Budget

60 Recent Tax Reform ProposalsPresident Obama, Framework for Shared Prosperity and Shared Fiscal Responsibility (April 13, 2011). See also: Choosing The Nation’s Fiscal Future (National Research Council & National Academy of Public Administration 2010) The Peterson-Pew Commission on Budget Reform, Red Ink Rising: A Call to Action to Stem the Mounting Federal Debt (2009).

61 Principles of Sound Tax PolicySimplicity Transparency Neutrality Stability No Retroactivity Broad Bases and Low Rates Tax Foundation, The Principles of Sound Tax Policy ,

62 More Principles of Sound Tax PolicyDistribution matters A just distribution of economic resources Intergenerational justice/ Deficits Behavioral consequences matter Encourage work and savings Marriage penalties and bonuses Keep effective rates as low as possible Growth and a stronger dollar 62 62

63 More Principles of Sound Tax Policy“The need to raise revenue makes it more crucial, not less, to enact structural reforms that focus on efficiency, equity and simplicity in the tax system.” William G. Gale & Benjamin H. Harris, Reforming Taxes and Raising Revenue: Part of the Fiscal Solution (May 2011), Income & Payroll Tax; VAT or Energy Tax

64 Tax Base Income Consumption Earnings Wealth

65 PERAB: Simplification OptionsSimplification for Families Consolidate Family Credits and Simplify Eligibility Rules Simplify and Consolidate Tax Incentives for Education PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation,

66 PERAB: Simplification OptionsSimplify Savings and Retirement Incentives Consolidate Retirement Accounts Integrate IRA and 401(k)-type Contribution Limits and Disallow Nondeductible Contributions Consolidate Non-Retirement Savings Reduce Retirement Account Leakage Simplify Taxation of Social Security PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation,

67 PERAB: Simplification OptionsSimplify Taxation of Capital Gains Harmonize Rules and Tax Rates for Long-Term Capital Gains Simplify Capital Gains Tax Rate Structure Limit or Repeal Section 1031 Like-Kind Exchanges Capital Gains on Principal Residences PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation,

68 PERAB: Simplification OptionsSimplify Tax Filing The Simple Return Data Retrieval Raise the Standard Deduction and Reduce the Benefit of Itemized Deductions Simplification for Small Business The Alternative Minimum Tax PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation,

69 PERAB: Compliance OptionsDedicate More Resources to Enforcement and Enhance Enforcement Tools Increase Information Reporting and Source Withholding Clarify the Definition of a Contractor PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation,

70 PERAB: Corporate Tax ReformReduce Marginal Corporate Rates Broaden the Corporate Tax Base Eliminate or Reduce Tax Expenditures Eliminate the Domestic Production Deduction Eliminate or Reduce Accelerated Depreciation Eliminate Other Tax Expenditures PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation,

71 PERAB: International Corporate Tax IssuesOption 1: Move to a Territorial System Option 2: Move to a Worldwide System with a Lower Corporate Tax Rate Option 3: Limit or End Deferral with the Current Corporate Tax Rate Option 4: Retain the Current System but Lower the Corporate Tax Rate PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation,

72 President’s Fiscal CommissionCo-chairs: Alan Simpson & Erskine Bowles Designed to raise 21% of GDP Individual tax rates of 12, 22, and 28% Eliminate the AMT Eliminate the phase-out of personal exemptions & limits on itemized deductions Eliminate itemized deductions but retain standard deduction & personal exemptions Tax capital gains & dividends as ordinary income The National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December 2010), Tax Policy Center,

73 President’s Fiscal CommissionEliminate tax expenditures except: child credit and earned income tax credit mortgage interest deduction—replace with 12% credit; $500,000 mortgage cap cap and phase out the exclusion for employer-sponsored health care charitable giving deduction—replace with 12% credit for contributions over 2% AGI The National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December 2010),

74 President’s Fiscal CommissionEliminate tax expenditures except: exclusion of interest on state and municipal bonds—tax interest only on newly-issued bonds retirement savings—maintain basic preferences, but consolidate retirement accounts and cap annual tax-preferred contributions at lower of $20,000 or 20 percent of income; expand savers’ credit defined benefit pensions The National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December 2010),

75 President’s Fiscal CommissionEliminate corporate tax expenditures & reduce corporate tax rate to 28% Territorial tax system for active foreign-source income Increase Social Security taxable wage base to 90% of wages, by 2050 Increase the gasoline excise tax on gasoline by 15¢ per gallon The National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December 2010),

76 Bipartisan Policy CenterCo-Chairs: Pete Domenici & Alice Rivlin one-year payroll tax holiday in 2011 to help stimulate economic recovery individual tax rates: 15% on the 1st $50,000 of taxable income ($100,000 for married couples, 27% on excess eliminate the AMT Bipartisan Policy Center, Restoring America’s Future (November 2010),

77 Bipartisan Policy CenterEliminate tax expenditures: exclusion from tax of the inside buildup of life insurance and deferred annuities credits and deductions for higher education expenses credit for child & dependent care exclusion from income of benefits under Section 125 cafeteria plans foreign earned income exclusion Bipartisan Policy Center, Restoring America’s Future (November 2010),

78 Bipartisan Policy CenterExempt the first $1,000 of net long-term gains from taxation (indexed for inflation) tax any additional long-term gains and all qualified dividends as ordinary income include in income unrealized capital gains at death Cap and phase out the exclusion for employer-sponsored health care Bipartisan Policy Center, Restoring America’s Future (November 2010),

79 Bipartisan Policy CenterEliminate deduction for state and local taxes Replace charitable contributions and mortgage interest deductions with 15% refundable credits Retain medical deduction Bipartisan Policy Center, Restoring America’s Future (November 2010),

80 Bipartisan Policy CenterReplace the standard deduction, personal exemptions, head of household filing status, the child tax credit, and the earned income tax credit with two refundable credits: $1,600 for each dependent child an earnings credit equal to 21.3 percent of the first $20,300 of earnings Bipartisan Policy Center, Restoring America’s Future (November 2010),

81 Bipartisan Policy CenterTax all Social Security benefits, eliminate the elderly credit & provide 2 new credits: 7.5% of Social Security benefits 15% of the current standard deduction for individuals age 65 or older Increase Social Security taxable wage base to 90% of wages Bipartisan Policy Center, Restoring America’s Future (November 2010),

82 Bipartisan Policy CenterImpose a 6.5% broad-based consumption tax Impose an excise tax 1¢/ounce on sugar-sweetened beverages Raise the excise tax on alcoholic beverages to 25¢/ounce Estate tax: $3.5 million exemption and 45% maximum tax rate Bipartisan Policy Center, Restoring America’s Future (November 2010),

83 Bipartisan Policy CenterCorporate taxes reduce the corporate rate to 27% eliminate many tax expenditures: domestic production deduction research and experimentation credit accelerated depreciation for rental housing retain deferral of income for controlled foreign corporations Bipartisan Policy Center, Restoring America’s Future (November 2010),

84 Wyden-Coats Tax Act Like the Tax Reform Act of 1986 Individualstop tax rate of 35% standard deduction of $15,000 ($30,000 for couples) repeal AMT 35% exclusion for capital gains and qualified dividends eliminate lots of tax breaks Senator Ron Wyden, The Bipartisan Tax Fairness and Simplification Act of 2011 (2011),

85 Wyden-Coats Tax Act Corporate & businessreplaces the graduated corporate rate structure with a flat rate of 24% eliminates many business tax breaks allow unlimited expensing of equipment and inventories for small businesses Senator Ron Wyden, The Bipartisan Tax Fairness and Simplification Act of 2011 (2011),

86 Rep. Ryan’s Roadmap Designed to raise 19% of GDPPay income taxes through existing law, or Through a highly simplified code with virtually no tax breaks 10% on the first $50,000 ($100,000 for couples), 25% on the rest $39,000 standard deduction & personal exemptions for a family of 4 Paul Ryan, The Roadmap Plan (2010),

87 Rep. Ryan’s Roadmap Eliminate the estate taxeliminate the AMT eliminate taxes on interest, capital gains, and dividends Eliminate the estate tax Replace the corporate income tax with a border-adjustable business consumption tax of 8.5% See also House Committee on Budget, The Path to Prosperity (2011) Paul Ryan, The Roadmap Plan (2010),

88 National Taxpayer AdvocateRepeal the AMT Consolidate the family tax provisions Improve other provisions relating to taxation of the family unit Consolidate education savings incentives Consolidate retirement savings incentives National Taxpayer Advocate, 2010 Annual Report to Congress (December 31, 2010),

89 National Taxpayer AdvocateSimplify worker classification determinations Eliminate (or reduce incentives for lawmakers to enact tax sunsets Eliminate (or simplify) phase outs Streamline the penalty regime National Taxpayer Advocate, 2010 Annual Report to Congress (December 31, 2010),

90 President Obama: Reform Corporate & Individual Tax“I’m asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit. It can be done.” “In fact, the best thing we could do for all Americans is to simplify the individual tax code. This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.” Text of President Barack Obama’s State of the Union Address ,

91 President Obama’s 2012 BudgetExtend the Earned Income Credit Expand the Dependent Care Credit Extend American Opportunity Credit Tax Dividends and Net Long-Term Capital Gains at a 20-Percent Rate for Upper-Income Taxpayers Reduce the Value of Certain Tax Expenditures for Upper-Income U.S. Department of the Treasury, General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals (February 2011),

92 President Obama’s 2012 BudgetEnhance and Make Permanent the Research and Experimentation (R&E) Tax Credit Reform & Extend Build America Bonds Reform Treatment of Financial Institutions and Products Reinstate Superfund Taxes Reform U.S. International Tax System U.S. Department of the Treasury, General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals (February 2011),

93 President Obama’s 2012 BudgetEliminate Oil and Gas Preferences Eliminate Coal Preferences Expand Information Reporting Improve Compliance by Businesses Require Greater Electronic Filing Worker Classification Strengthen Tax Administration Expand Penalties U.S. Department of the Treasury, General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals (February 2011),

94 President Obama’s Framework for Shared Prosperity and Shared Fiscal ResponsibilityThe White House,

95 President Obama’s Framework: another 12-year estimate: $5.3TRestore high-bracket tax rates to Clinton-era levels: $1T Cut tax-expenditure spending through the tax code: $1T Cut health care spending: $0.5T Cut other mandatory spending by: $0.4T Cut security spending: $0.4T Cut non-security discretionary spending: $0.8T Those reductions will carry with them a reduction in net interest of: $1.2T Brad DeLong,

96 President Obama’s Framework: Tax Reform$3 of spending cuts and interest savings for every $1 from tax reform that contributes to deficit reduction comprehensive tax reform to produce a system which is fairer, has fewer loopholes, less complexity, and is not rigged in favor of those with lawyers and accountants to game it. The White House, Fact Sheet: The President’s Framework for Shared Prosperity and Shared Fiscal Responsibility (April 13, 2011),

97 President Obama’s Framework: Tax ReformWould not extend the Bush tax cuts for the wealthiest Americans Builds on the Fiscal Commission’s goal of reducing tax expenditures to both lower rates and lower the deficit Corporate tax eliminate loopholes reduce distortions lower the corporate tax rate The White House, Fact Sheet: The President’s Framework for Shared Prosperity and Shared Fiscal Responsibility (April 13, 2011),

98 Center for American Progress (left-wing plan)15% income tax rate on couples with income under $100,000 Most loopholes eliminated; 15% credits instead Tax on greenhouse gases & oil import fee of $5 per barrel Financial transactions tax Remove cap on employer payroll tax Estate tax Peter G. Peterson Foundation, 2011 Fiscal Summit: Solutions for America’s Future (May 2011), at

99 Heritage Foundation (right-wing plan)Single-rate tax income tax on all income sources that are spent on consumption (savings are deductible) Eliminates the estate tax Few deductions of credits Rate set to raise 18.5% of GDP Probably 25-30% Peter G. Peterson Foundation, 2011 Fiscal Summit: Solutions for America’s Future (May 2011), at

100 Probable Reforms Eliminate the LIFO method of accountingRepeal oil company tax breaks Eliminate graduated corporate rates Eliminate capital gains treatment of carried interest for fund managers Limiting the benefit of itemized deductions to 28 percent Sullivan:  What the Debt Limit Debacle Teaches Us About Tax Reform,

101 Probable Reforms continuedClose tax haven loopholes Impose corporate tax on large passthrough entities Extend the depreciable life of corporate aircraft to seven years Repeal the 45-cent-per-gallon tax credit for corn ethanol Repeal the deduction for domestic production activities

102 Consumption Tax OptionsProgressive Personal Consumption Tax Subtraction method Value Added Tax Treasury Department proposal for Business Activity Tax (BAT) Credit-method (European) VAT National retail sales tax (RST) Charles E. McClure, Jr., Why the United States Needs a Value Added Tax (2009),

103

104 Earlier Tax Reform ProposalsPresident’s Advisory Panel on Tax Reform, Final Report (2005), U.S. Treasury Department, The President's Tax Proposals to the Congress for Fairness, Growth, and Simplicity (1985).

105 Earlier Tax Reform ProposalsU.S. Treasury Department, Tax Reform for Fairness, Simplicity, and Economic Growth: The Treasury Department Report to the President (3 volumes, 1984). David Bradford and the U.S. Treasury Tax Policy Staff, Blueprints for Tax Reform (Arlington, VA: Tax Analysts. 2nd ed. 1984).

106 Conclusion President needs 60 votes in the Senate and cooperation in the House The whole tax system is in play And will be in play for years Lobbyists will be tripping over each other Change is almost always incremental

107 Sources The President’s Economic Recovery Advisory Board, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation (August 2010), The National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December 2010), The Bipartisan Policy Center Debt Reduction Task Force, Restoring America’s Future: Reviving the Economy, Cutting Spending and Debt, and Creating a Simple, Pro-Growth Tax System (November 2010),

108 Sources Senators Ron Wyden & Dan Coats, Bipartisan Tax Fairness and Simplification Act of 2011 (2011), Representative Paul Ryan, The Roadmap Plan (2010), House Committee on Budget, The Path to Prosperity: Restoring America’s Promise (2011), Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011,

109 Sources National Taxpayer Advocate, 2010 Annual Report to Congress (December 31, 2010), Office of Management and Budget, 2012 Federal Budget, The White House, Fact Sheet: The President’s Framework for Shared Prosperity and Shared Fiscal Responsibility (April 13, 2011), Joint Committee on Taxation, List of Expiring Federal Tax Provisions, (JCX-2-11), January 21, 2011,

110 Sources The Tax Policy Center, Deficit Reduction Proposals, Joshua Rosenberg, The U.S. Fiscal Trajectory: Causes and Consequences (January 21, 2011), Peter G. Peterson Foundation, 2011 Fiscal Summit: Solutions for America’s Future (May 2011), U.S. Department of the Treasury, General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals (February 2011),

111 About the Author Jonathan Barry Forman (“Jon”) is the Alfred P. Murrah Professor of Law at the University of Oklahoma College of Law and the author of Making America Work (Washington, DC: Urban Institute Press, 2006). Jon was the Professor in Residence at the Internal Revenue Service Office of Chief Counsel, Washington, DC, for the academic year. Jon can be reached at , 111 111