Tax Analysts Blog

Taxes & Deficits: Take the Survey

Posted on Aug 9, 2011

Ouch -- America's credit rating has been down graded. Not only are the Germans better than us at soccer, but now they have a stronger credit rating too. Ditto for France, Luxembourg and Sweden -- those bastions of fiscal responsibility.

Okay, how long will it take us to regain our AAA rating? History suggests an upgrade might take a while. When Canada was downgraded in the early 1990s it took them 9 years to return to their prior status. Other countries have taken twice as long.

But at least Congress is focused on addressing the problem, right? A bipartisan 'Super Committee' will soon be empaneled to come up with an additional $1.5 trillion in deficit reduction. Should the Super Committee fail to produce a plan, or should their plan not gain congressional and administration approval, then $1.2 trillion in spending cuts will be triggered under the recently enacted Budget Control Act.

That will help, right? A trillion and a half dollars in deficit reduction sure sounds like a lot of money. That said, the Congressional Budget Office estimates our national debt will increase by $13 trillion over the next decade largely due to our entitlement programs and retiring baby boomers.

Across the global economy people are looking to see how Washington deals with this crisis. Will there be meaningful progress or political stalemate -- and if there is progress, will it take the form of tax hikes? We've decided to put these keys questions directly to the readers of Tax.Com. If you have 30 seconds to spare, please participate in our online survey regarding the likely outcome of the congressional Super Committee and the fate of the expiring Bush tax cuts. You'll see it on the right side of this page.

Everyone has an opinion, we want to hear yours. And don't forget to check back and see how others in the tax community responded to the survey.

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