The administration, worried about Democratic election prospects, is considering a new set of tax cuts to stimulate the economy. But Diane Lim Rogers, Concord’s chief economist, argues that the administration’s ideas are neither new nor particularly well thought-out. While the economy may need some additional temporary help, she says there is no justification for deficit-financing permanent tax cuts.
In a new blog, Rogers also argues that any extension of the Bush tax cuts should be weighed against other options to help the economy – not simply given a free pass, as many policymakers in both parties seem to favor. And Rogers objects to the restrictions placed on the President’s Economic Recovery Advisory Board – restrictions that doomed its new report on tax reform options to be a “boring disappointment.”
Her recommendations for effective tax reform: Raise more revenue to help deal with the expanding requirements of an aging population, broaden the income tax base by ending many loopholes, and consider placing more of the tax burden on things other than income.
Orszag: One Nation, Two Deficits