Economists Grade McCain On the Curve
I turned in my PhD dissertation just in time. I can’t believe I’m going to be a doctor of public finance.
My paper: An Alternative Tax System in the McCain Administration. It is a detailed description and macroeconomic analysis of John McCain’s plan to give taxpayers a choice of paying under the current system or through a much simpler and more efficient option.
My thesis committee of 300 economists has been hugely supportive and wrote an incredible letter of recommendation. They could not have been more effusive (for economists, at least), telling everyone how they “enthusiastically support” my analysis and how it “builds on the core principles that made America great.”
Now, I admit, I’ve been a bit distracted over the past few months, trying to get this new job and all. So my paper is not as complete as it might have been. Well, actually, I never did say what income I would tax. And I never got around to proposing a rate structure either. So, I couldn’t say what the distributional impact would be, or what the new plan would do to federal revenues. And, I had to skip the section on what it would mean for economic growth. I’m sure you understand: Without the rates or the base, the macro analysis just didn’t hold together. But trust me, the optional new tax will be way better than the current Internal Revenue Code and won’t even increase the deficit.
Who cares about all these boring details, anyway? My thesis committee includes former senior government economists and professors at our best universities. And they didn’t need specifics, so why should you? Even though they had no idea what McCain is proposing, this is what their letter said:
“His plan would also create a new and much simpler tax system and give Americans a free choice of whether to pay taxes under that simple system or the current complex and burdensome income tax.”
There are a few spoilsports. Always are. For instance, the grumps at the Tax Policy Center keep looking at the versions proposed by former GOP presidential hopeful Fred Thompson and the Republican Study Committee. They would create an optional tax with rates of 10% and 25%, with a standard deduction of $25,000 for joint filers. TPC figured Thompson’s plan would add $7.6 trillion to the deficit over 10 years. I know that sounds like a lot of money, but it isn’t my plan. I promise.
I’ll get you those details soon. After all, my defense isn’t scheduled until Nov. 4.