BTC STATEMENT: U.S. Senate Fails to Pass Sequestration Fix
New Revenues Essential for Any Future Deficit Reduction
STATEMENT FROM NC BUDGET & TAX CENTER DIRECTOR ALEXANDRA FORTER SIROTA
RALEIGH (Feb. 28, 2013) — In a series of votes today, the United States Senate failed to repeal the $85.3 billion in automatic, across the board spending cuts known as “sequestration.” As a result, these spending cuts will go into effect tomorrow. As Congress grapples with the fallout of allowing these cuts to go forward, it is critically important for our Federal delegation to support a balanced approach to deficit reduction that replaces the sequestration cuts for 2013 with equal amounts of new revenue and smart spending cuts.
The $10 trillion in special tax loopholes provided through the federal corporate and personal income tax codes every decade are a great place to start in terms of finding these revenues, as along as the middle-class and working family tax credits included in the fiscal cliff bill are protected. For example, Congress can raise additional revenues in the following ways:
- preventing offshore corporate tax avoidance, which saves between $221 billion and $606 billion over the next decade;
- limit wealthy individuals' total tax benefit from deductions and exclusions, which saves about $513 billion over the next ten years); and
- end special tax breaks for corporate jets and oil companies, which saves about $3 billion over the decade.
Congress still has the opportunity to do the right thing on sequestration during upcoming negotiations over funding the federal government through the end of the current fiscal year. As this process continues, Congress should act to replace sequestration with a balanced approach to deficit reduction that includes one dollar in new revenues for every dollar in spending cuts. Doing so simply asks corporations and wealthy individuals to pay their fair share and protect vital public investments in education, job training, and food safety.