Tax cuts and comments

Mark Coban's Friday Huffington Post blog (http://www.huffingtonpost.com/mark-cuban/governor-romney-tax-plan_b_1960...) does a good job of explaining why Mitt Romney thinks his tax cut plan will work. Coban doesn't say the plan will work -- he notes a couple of high-risk elements -- but he makes it understandable that Romney is convinced in his own mind that it will.

 The following paragraph is near the end: "So what does all this mean? It means this is how I was thinking and I wanted to get it out there to let people comment on it. Thats the beauty of a blog, it can create discussion on topics i am interested in."

 

So here are my comments:

 First, I am quite skeptical that a combination of tax cuts and cuts in government spending will drive the economic expansion Romney is largely counting on to keep total revenue constant. Even if the fired government workers get comparable private-sector jobs quickly, there will be little change in their purchasing power. In fact, the economy-driven shrinkage of state and local government is one of the bigger reasons the recovery has been so slow.

I also note that the last time we heard about "tax simplification," the result was what has fecetiously been called "The Lawyers and Accountants Relief Act of 1986" -- the act that drove quite ordinary people to feel they needed professional advice to file their taxes. Romney may thnik he can do the same things Reagan did and get different results, but I doubt it.

I also recall that Reagan said his tax cuts would lead to an economic expansion that would keep revenue constant. The result, as we all know, was what was at the time by far the biggest deficit in American history. Once more, I am not convinced that Romney can do the same thing Reagan did and get different results.

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