Thursday, March 22, 2012

on Chait writes

on Chait writes

there’s not really a growing consensus that tax reform is good. The consensus has existed among economists forever.

where he defines tax reform as closing tax deductions and loopholes and lowering rates.

I comment

Consensus among economists ? You must be joking. I am an economist and I absolutely oppose lowering rates whether or not loopholes are eliminated.

As to loopholes, well it depends. Should we eliminate the mortgage interest deduction ? Sure (but not yet -- and not quickly -- low housing investment is a problem now). The deduction for charitable contributions not so much. Tax employer provided health insurance when the Republicans stop trying to kill Obamacare (that is on the first of never). Eliminate the R&D tax credit ? Why ? Are you nuts ? Eliminate the investment tax credit ? Why tax reinvested profits at all ?

No one like tax expenditures in the abstract (as almost everyone dislikes high government spending in the abstract). It is impossible to get a consensus once one discusses which deductions to eliminate (Chait went on to note this in the post).

Chait has long supported broadening the base and lowering rates (he was a passionate enthusiast for the 1986 tax reform). The economists who basically agree with Paul Ryan have long supported tax reform. Most non Randian economists do to. But many of us don't.

If you want to claim there is a consensus, show me a poll. Also one on just what should capital gains tax rates, tax treatment of capital income and top income tax rates. On the second set of questions, I am willing to bet a small amount of money at even odds that most members of the American Economic Association disagree with Ryan about the direction in which policy should change.

3 comments:

Ken Houghton said...

"Also one on just what should capital gains tax rates, tax treatment of capital income and top income tax rates. On the second set of questions, I am willing to bet a small amount of money at even odds that most members of the American Economic Association disagree with Ryan about the direction in which policy should change."

Not only would I take that bet--your favor charity against mine--I would promise not to give up my AEA membership before the poll, just to ensure that there were two votes in your favor.

You might want to check for that poll Scott Adams did five-ish years ago and mark your assumption to market with it. (I'll do the same, of course, if I can find the HD on which it is hiding.)

Robert said...

One vote. I am not a member of the AEA. Hmm what happens if most agree with Ryan on taxes on capital income but not on capital gains and top income tax rates (is the bet 2 out of three). Will look for Scott Adams.

Robert said...

OK I have skimmed (see below) the pdf of a Scott Adams survey conducted Sept 2008. It is not useful for our purposes. The survey is of importance of issues and whether Obama or McCain would be better. One issue is "eliminating the estate tax" another is "reducing the capital gains tax" a third is "increasing taxes paid by the rich".

The questionaire is no good at all. The issues are not a topic where one can advocate change in ond direction or the other. They have a direction chosen by Addams. I consider "eliminating the estate tax" an important issue, since I think it would be a very bad thing to do. I rate Obama as better on this issue as he won't eliminate the estate tax. But someone else might consider rating it a unimportant to mean "it would do no good at all to do that."

Clear questions include party affiliation (many more Dem than Rep) and voting intentions (many more Obama than McCain). Most clearly disagree with Ryan. Beyond that, I can't say.