Another Krugman Whopper
As I wrote the other day, the unsigned editorials in The New York Times are becoming almost indistinguishable from press releases and talking points put out by the Democratic National Committee. The same is true of Paul Krugman’s columns.
You would expect political campaigns to shade the truth, distort, and mislead. But the paper of record? A Nobel Prize winner? This is from Krugman’s Monday column:
[T]he Romney plan offers huge tax breaks to corporations and the wealthy, while pledging to offset these cuts by closing unspecified loopholes.
In fact, Mitt Romney has never called for tax cuts either for corporations or the wealthy. What he has advocated is “tax reform,” which means lowering the rates and expanding the base. If the past is any guide, this will result in higher, not lower, tax payments by the wealthy. But we will have a much more efficient tax system — one that does not unnecessarily penalize saving, investment and work.
There is a serious discussion in the blogosphere about how to accomplish such a tax reform. But Krugman has long since removed himself from serious discussion. Details below the fold.
As Martin Feldstein wrote in the Wall Street Journal the other day, Romney’s tax reform proposal was attacked for being “mathematically impossible.” To get the rates as low as Romney aims will require tax increases on the middle class declared the Tax Policy Center (Brookings/Urban institute). Feldstein purported to show that the criticism was false.
However, Brad DeLong claimed to find an error in Feldstein’s calculations and David Henderson agreed with DeLong. Now Feldstein has responded at Greg Mankiw’s blog with a lengthy explanation and this concluding thought:
So I think my conclusion stands: it is feasible to combine tax cuts and base broadening as Governor Romney suggests without raising the budget deficit or imposing any middle class tax increase. Critics might not like the Romney plan but they cannot call it “mathematically impossible.”
You are arguing over semantics, hardly a “whopper” there. The fact is that Romney has been very specific (by his standards) about his plan to lower the top marginal rates, but has been incredibly evasive about which loopholes he will close. If he doesn’t have the courage to describe them in the campaign, what makes you think he will be able to follow through with proposing legislation to eliminate popular tax breaks that his wealthy backers benefit disproportionately from?
So are you and Feldstein on record as saying that Romney intends to make the wealthy pay more in taxes? That is news to me, and probably news to the trickle-down ideologues that support the Republican ticket. Considering Feldstein is a Romney advisor, I certainly think his claims are worthy of additional scrutiny, sd I’m sure many people here would scrutinize the claims of an Obama advisor. Is there an economist not supporting Romney that thinks it is possible to make cuts of that magnitude revenue-neutral just by eliminating deductions? I have yet to see one, while independent analyses have been skeptical.
Also, doesn’t “base broadening” euphemistically imply raising the amount of taxes paid by lower income earners? Would John/Feldstein/Romney go on record as supporting that policy.
If the tax code is simplified, and the volitile regulations that hamper businesses from reinvesting are dismissed, we will see a huge spike up in employment.
Paul Krugman right.. How can we give credit to something that has not been proven to work in reality, rather than in theory?
“Also, doesn’t ‘base broadening’ euphemistically imply raising the amount of taxes paid by lower income earners?”
Over the years Congress (both Democrats and Republicans) slowly reduced the income threshold of people required to pay income taxes until nearly half of workers don’t have to pay anything other than payroll taxes. This made sense from an economic standpoint; the cost of collecting from low-income people was hardly more than the revenue raised. But, it also had the effect that half of workers don’t have a stake in controlling the size of government.
While learning intermediate macroeconomics, my class was assigned one of Mankiw’s textbooks for study. From this exposure to his style of well-reasoned and thought out form of instruction, I am inclined to give weight to his colleague’s arguments which he endorses.
Krugman keeps getting bombarded!
It is no surprise that properly calculated tax reform can work, just as it is no surprise that Romney’s won’t. The Romney tax rates are simply too low.
Martin Feldstein identifies a major problem with the Tax Policy Center analysis: “The TPC focus on those with AGI over $200,000 limits that group to the top 4 million taxpayers who are three percent of all returns and five percent of all taxable returns.”
Krugman uses the My holding up a bank is okay, bceause that person shot and killed a guy which is a far worse act, defense. What makes it worse is that he should be declaiming, It’s a lie; I didn’t hold up the bank. As a liberal myself, I am appalled that we are so fond of that and the Bush did it too defense for having done the right thing. Confronted with the lie that the bill will worsen the deficit, Krugman starts talking about what Bush did, instead of declaiming, That is a contemptable lie, it will do nothing of the sort. He immediately starts talking about what Bush did, which is completely irrelevant.Why are we so unable to stand up on our hind legs and say that we acted on principle, did what we believed to be right, and produced an outcome that will help people and benefit the nation? This bill has good features in it. When attacked for having passed it, we curl up in a ball and start talking about how Bush was worse instead of proudly shining a light on the good that we are doing with this bill.