A new deficit narrative?

Even some conservative advocates say that Schakowsky’s proposed bill could raise a substantial amount of revenue. Mark Robyn, a staff economist at the conservative Tax Foundation, said that he had no reason to doubt ITEP’s revenue estimate.

Alan Viard, a resident scholar at the conservative American Enterprise Group, said that while “it’s not going to be possible to close our fiscal gap with tax increases alone, that does not in and of itself mean that we shouldn’t do some tax increases on [the wealthiest Americans].”

Viard opposes the proposed bill because he believes that it would stifle investment. But Schakowsky takes a demand-side approach: “This is revenue that, through federal programs, will go into the pockets of ordinary Americans,” she said. “We can increase demand by allowing them to become consumers again, and that demand will prompt corporations to invest and hire more people.”

Curtis Dubay, a Senior Policy Analyst at the conservative Heritage Foundation, asserted that, “The deficit is 100 percent a spending problem,” but then, despite his opposition to doing so, acknowledged that the deficit could be partially addressed by raising revenue.

According to the liberal-leaning Center on Budget and Policy Priorities, the Bush tax cuts are the single, largest contributor to the reemergence of large budget deficits in the last decade.

Roberton Williams, a senior fellow at the Tax Policy Center, a non-partisan research group, argued that an effective revenue-side deficit reduction plan would combine some tax increases with broader tax reform that would eliminate loopholes in the current tax code.

The Fairness in Taxation Act would close one of the largest of those loopholes by taxing income from capital gains at the same rate as income from wages (capital gains income is currently taxed at 15 percent).

“Any serious conversation about the deficit needs to include both spending cuts and tax revenue,” Williams added, an approach directly contrary to the pledge to oppose all income tax increases — even those limited to the wealthiest Americans — that has been authored by the conservative group Americans for Tax Reform and signed by majority of House Republicans.

“I’m not opposed to making some cuts, but revenue has to be part of the equation, as well,” Schakowsky said. “People are mad, and rightly mad, but I think we have to re-focus their attention on….hedge fund managers that are paying [only] 15 percent of their billion-dollar income in taxes. We need to step back and create a budget that’s done in a really fair way.”