Romney's February Surprise: Massive 20% Income Tax Cuts Across-the-Board

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Do you think this tax tack by Mittens is a good public policy idea Politico?

Only if it is matched by massive transferring of spending to the states coupled with spending cuts, as I anticipate. There is no choice but to get the deficit under control. I really believe Romney can cut federal taxes, move a lot of spending onto the states (who can decide what stays and what goes), and cut the true waste. It is probably doable. If not, we'll cut taxes less than 20%, but still cut them as much as possible. The optimization goal is to minimize taxes and spending given our various constraints.

About 75% of total government spending goes for Social Security, Medicare, Medicaid, Defense and interest on the debt that's already there. Tough categories to make big cuts in in the short term -- which would mean telling currently retired people that their benefits are being cut, or (gasp) reducing military spending.
Transferring the rest (highways, police, education, etc) to states that are already laying people off in order to balance their budgets will mean big cuts to how much gets spent on schools, highways, police departments, etc.  In effect, a big transfer of significant parts of these areas to private-sector spending, where those who can afford to will probably get better services, and those who can't will get worse. And public goods, like highways, will continue to deteriorate.

I understand that for many people this would all be a feature, not a bug. But it's as well to be honest about that, I think.

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Tax cuts are not magical miracle fairies that fix everything...when will the GOP learn this?

When the voters learn that.  Until voters realize that, the GOP will keep pushing tax cuts because they get them votes.

And, because tax cuts are a lot easier to manage politically than spending cuts, the debt will continue to grow.
There's a real bad faith to these proposals to cut taxes now in very specific ways, and cut spending later in much vaguer ways, like "eliminating waste" or "reforming Social Security."

[ajb]

Do you think this tax tack by Mittens is a good public policy idea Politico?

Only if it is matched by massive transferring of spending to the states coupled with spending cuts, as I anticipate. There is no choice but to get the deficit under control. I really believe Romney can cut federal taxes, move a lot of spending onto the states (who can decide what stays and what goes), and cut the true waste. It is probably doable. If not, we'll cut taxes less than 20%, but still cut them as much as possible. The optimization goal is to minimize taxes and spending given our various constraints.

So the cut in Fed taxes is matched by an increase in state taxes, causing a further Balkanization of the US?

Well, it will likely mean an increase in state taxes if you live in heavily Democratic states (I feel your pain, Torie), but other states, swing and Republican states, will choose different courses (i.e., cut what is deemed superfluous). Perhaps this will cause Democratic states to become more anti-tax moving forward, of course.

Let's face it: Moving whatever spending can be moved onto the states is the only way to force out what people really don't want to pay for due to the fact states have to balance their budget whereas the federal government does not. It's really the best thing to do to get the federal deficit under control, and eventually our debt load too. Have the federal government commit to defense/federal law enforcement spending, various federal courts with regards to law/order, social security/medicare (obviously the minimum age for those born after 1964 will need to be pushed up to 70 eventually), and some scientific/technological research especially with regards to defense and space exploration (e.g., NASA). With regards to a bunch of other stuff, outside the broadly outlined scope, allow the 50 states to compete with one another. The best models will eventually win. Furthermore, people who want to live in Amerisweden can live in an Amerisweden state, and people who want to live free or die can live in a live free or die state. It is a lot easier to enact change one way or the other with decentralization.

Funny, of course, because your guy, the one who's proposing all of this, is the one who brought a health care mandate to Amerisweeden.