Five bipartisan fixes for US debt crisis
Whether in the coming weeks or later, the US s going to have to grapple with its long-term debt challenge. We at the Bipartisan Policy Center suggest these five solutions – stemming from the work of prominent leaders, Republicans and Democrats – to address US debt.
2. Begin tax reform
Comprehensive tax reform – both individual and corporate – that limits tax breaks, reduces rates, and increases revenue would improve America’s economic competitiveness while reducing the deficit. Such a reform – recommended by the Bipartisan Policy Center’s Domenici-Rivlin Debt Reduction Task Force – won’t happen overnight, but smaller steps are possible.
One place to start might be to index tax brackets and other provisions in the code, such as eligibility for various tax credits, to the chained CPI, a more accurate measure of inflation. This provision would increase revenue relative to the current system by slightly raising the amount of individuals’ incomes that are subject to higher tax brackets, reducing the deficit.