The Congressional Progressive Caucus introduced a budget this week that it says would bring total deficit reduction to $4.4 trillion through defense cuts, new revenues, and economic growth that would result from measures to boost the economy and education. It includes a substantial amount of revenue through the closure of tax loopholes and new taxes on risky financial trading while also preserving Medicare, Medicaid, and Social Security from cuts.
Under the budget, defense spending would return to 2006 levels, investment income would be taxed as wage income, and tax rates would rise on millionaires and billionaires. The highlights of the budget include:
A financial transactions tax: Such a tax, as introduced by Rep. Peter DeFazio (D-OR) and Sen. Tom Harkin (D-IA), would raise $352 billion in revenue over the next decade while also reducing risky high-speed trading among Wall Street banks. Eleven European countries have announced that they would adopt such a tax, and it has been supported by consumer groups and financial and business leaders.
Stimulus measures: In an effort to boost the economic recovery, the Progressive budget would fund infrastructure investments and provide aid to states to allow for the rehiring of police officers, teachers, and firefighters. It also includes funding for job training initiatives, extended unemployment insurance (which has been cut at the state level), a tax credit for working families, and money to rebuild schools, which are facing a half-trillion deficit in construction and improvement needs.
Closure of corporate tax loopholes: According to the budget, it would raise more than $200 billion in revenue from the closure of tax loopholes and elimination of tax breaks, including those for gas and oil companies, one that benefits wealthy Wall Street traders, and one that gives corporations a break for moving jobs overseas.
The budget also includes a carbon tax to increase funding for alternative energy methods and a public option to lower the cost of health care. It would also give the government the power to negotiate drug prices to generate more in health care savings.