*P.S. I'm purposefully saying "taxes"- even though the correct term would be federal income taxes. It's a little joke for me. You see, like the dozens of Republican legislators and policy "experts" (from groups like Cato and the Tax Foundation) that I have spent hours watching at Congressional hearings attacking the refundable tax credits like the EITC, it appears that today- for some reason- I'm having trouble keeping track of what people actually pay in taxes, correct terminology, etc. Whoops?
Could you imagine what tax policies would look like from a combined "Minnesota nice" ticket of Pawlenty and Bachmann? After all, look at what "moderate" Tim Pawlenty has proposed in tax cuts: http://www.taxpolicycenter.org/numbers/displayatab.cfm?template=simulation&SimID=394&relTTN=T11-0169
Yes. You read that right (in the first table). That's over $11.6 trillion in tax cuts from current law. Deficit, schmeficit.
And the distributional effects?
In 2013 the Pawlenty plan would give people in the top one-tenth of 1 percent on the income scale (i.e., people with incomes above $2.7 million) an average annual tax cut of $1.8 million — which is more than four times what they got last year from the Bush tax cuts.As E.J. Dionne wrote this morning in the Washington Post- doesn't the GOP field almost make you miss George W. Bush? And as Dionne also pointed out, Bachmann is only now looking like a moderate because the entire Republican party has shifted so radically in the last three years. That may be scary, but it doesn't make Michele look any less crazy.
3 comments:
1. Table of Tax Policy Center assume no broadening of tax base.
2. Do you like Taranto's name for Dionne-- Baghdad Bob of liberalism.
1. TPC assumes no broadening of base because, like everyone else who talks about tax reform and swears they'll close tax expenditures to pay for their rate cuts, Pawlenty doesn't specify how he would broaden the base. Does Pawlenty deserve credit for something he hasn't said?
In addition, there's no reasonable way for Pawlenty to broaden the individual base to significantly impact the distributional effects of his rate cuts. You factor in the size of his cuts (which would require hacking EVERY popular and significant tax expenditure- employer health insurance, housing, pensions [that includes IRAs and 401(k) plans], accelerated depreciation, charity deduction, etc.), the amount of revenue you can actually raise from closing tax expenditures (which is substantially less than their $1.1 trillion annual current size, something very few people realize), phase-in time, and the level of regressivity of tax expenditures (which while significant, still pales in comparison to the extreme regressivity of Pawlenty's tax policy changes) and you're still left with a very regressive proposed tax reform... even if Pawlenty suddenly grew a pair and got specific about how he would cut every precious tax expenditure.
Pawlenty also says he could achieve 5% GDP growth for a decade. If wishes were fishes...
2. Taranto once again makes a substantive contribution.
Does this mean you are joining njDylan, PBM, and me on the Bachmann bandwagon?
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