$2.439 trillion will come from additional taxes. The most significant card played in this category gained $1.235 trillion alone. Although it is a daunting task and somewhat unpopular, reforming and simplifying the tax code would definitely be a game changer for our current economic position. With this policy, the tax code will be simplified down to three brackets. Rates would drop to between 8 to 12 percent for the lowest wage earners, 14 to 22 percent for the middle bracket, and 23 to 29 percent for the top bracket. Additionally, we will reduce loopholes and tax breaks, eliminate the Alternative Minimum Tax, establish a territorial tax system for corporate taxes, and decrease corporate taxes from 35 to between 23 and 29 percent. Another significant, yet controversial, taxation would be to phase out the home mortgage interest deduction, which would effectively increase federal revenues by approximately $1.043 trillion. Next, $130 billion will be raised by taxing sugary beverages at one cent per ounce. Though some may argue that this additional sales tax would hurt the beverage industry and, by extension, the economy, there is strong evidence to the contrary. In general, the price elasticity of demand for sugar-sweetened beverages (SSB) is inelastic, between -0.8 and -1.0, according to Dr. Tatiana (Tania) Andreyeva, Director of Economic Initiatives at the Rudd Center for Food Policy & Obesity at Yale University (Andreyeva et al., 2009). Therefore, the small price hike is unlikely to bring about any significant movement along the demand curve for SSBs and the tax will, in fact, increase federal revenues, with the added benefit of helping to combat obesity and, to a lesser extent, reduce health care expenditures. This budget also calls for increased taxes on carries. As it stands, private equity and hedge fund managers enjoy only a 15 percent tax rate on carried interest. By…
