1. americanprogress.org 1 Michael Ettlinger Vice President, Economic Policy Center for American Progress

2. americanprogress.org 2 Primary balance in 2015 Full balance in 2030

3. americanprogress.org 3

4. 4 Budgeting for Growth and Prosperity: A Long-term Plan to Balance the Budget, Grow the Economy, and Strengthen the Middle Class Michael Ettlinger, Michael Linden, and Seth Hanlon http://www.americanprogress.org/issues/2011/05/budgeting_for_growth.html

5. americanprogress.org 5

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7. Control discretionary spending Security Create a unified security budget Cut defense spending by $110 billion in 2015 Place a cap on security spending that grows at the rate of inflation +1% 7

8. americanprogress.org 8

9. Comprehensive income tax reform Reduce greenhouse gas emissions through a price on carbon and a foreign oil import fee Modest financial transactions tax Other bells and whistles 9 Major Elements of CAP’s revenue plan

10. americanprogress.org Fairer Itemized deductions (mortgage, charitable) and retirement incentives become credits worth the same to all taxpayers Flat 15% marginal rate for taxpayers under $100,000 (singles under $50,000) Restore Clinton rate for top earners ($400,000 for couples; $200,000 for singles) Temporary 5% millionaires’ surtax until budget is balanced. Capital gains rate at 28%; dividends taxed as ordinary income. Child Credit expanded from $1,000 to $1,250 with no phase-out and greater refundability. EITC retained in its current, enhanced form Comprehensive income tax reform 10

11. americanprogress.org

12. Effective tax rate, 1992-2007

13. americanprogress.org After-tax income growth, by income group

14. americanprogress.org