Tags: chained | cpi | tax | increase

Fiscal Conservatives: ‘Chained-CPI’ is $100 Billion Tax Increase

Tuesday, 30 Apr 2013 12:30 PM

By David Yonkman, Washington Correspondent

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
A change in how the government measures inflation could result in a $100 billion tax increase, the limited government group Club for Growth tells Newsmax.

The so-called "chained CPI" proposal outlined in President Barack Obama’s fiscal 2014 budget is meant to save money in programs like Social Security by recalculating the cost-of-living adjustment through the Consumer Price Index.

But without a change in the tax code, the lower inflation adjustment change would force people into higher income brackets because wages usually rise faster than inflation.

Overall, benefits would be lower but taxes higher.

“Using chained CPI for tax brackets would represent a major tax increase over time,” says Club for Growth Spokesman Barney Keller. “Fiscal conservatives should only support chained CPI for slowing the growth of spending, not as an anti-growth tool to boost revenues.”

The Club for Growth, along with seven other fiscally conservative organizations, warned Congress about the potential tax hike in a letter this week.

“In the context of bracket-flattening tax reform which is revenue-neutral or a net tax cut, chained CPI may be an acceptable component,” the groups said in their letter. “But as a stand-alone tax measure, chained CPI is a $100 billion tax increase in the first decade alone.”

Liberals in Washington have criticized the proposal because it would result in fewer government benefits over time. But fiscal conservatives have embraced it as a positive first step in entitlement reform because it would hold down cost-of-living increases, although they still refuse to consider any tax increases as part of a budget deal.

“Over time, American families and small employers will find themselves facing a higher marginal income tax rate than they would absent the change to chained CPI,” the groups wrote. “Additionally, other tax provisions such as IRA and 401(k) contribution eligibility, etc. would grow more slowly if chained CPI were adopted.

The letter also included signatures by representatives from such heavyweight conservative organizations as Americans for Tax Reform, Heritage Action for America, and Americans for Prosperity.


© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Researchers Use Twitter to Predict Crime

Sunday, 20 Apr 2014 07:46 AM

Hidden in the Twittersphere are nuggets of information that could prove useful to crime fighters -- even before a crime  . . .

Ex-Soldier: My Friendly-fire Shots Might Have Killed Pat Tillman

Sunday, 20 Apr 2014 07:41 AM

A former U.S. Army Ranger who was in the same platoon as ex-NFL player Pat Tillman has stated in a television interview  . . .

Boston Marathon Looks to Shake Shadow of Deadly 2013 Bombing

Sunday, 20 Apr 2014 07:23 AM

Runners, from the world's elite racers to first-timers, will step to the Boston Marathon starting line on Monday for the . . .

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved