What should those negotiating the fiscal cliff do?
The first step is to raise average (not marginal) tax rates on upper-income taxpayers. Revenue increases should first come from these individuals. This means closing loopholes ...Tax deductions should be scaled back, especially in the areas of mortgage interest, charitable giving and employer-provided health insurance.He didn't stop there:
A strategy of 'taxing the rich' cannot pay for the entitlement state. If we wanted a larger government as a share of GDP, we would have to raise taxes substantially on everyone. Mr. Obama cannot argue that we can right the fiscal ship simply by taxing the rich.He also suggested a VAT:
The present tax system can raise at most about 20 per cent of GDP in a booming economy. A government of, say, 25 per cent of GDP cannot be paid for by changing rates in such a system. The distortions would be too great. Rather, as in most other advanced economies, a universal consumption tax would be required.Bottom line, under Romney things wouldn't likely be much better, taxes are headed up no matter who is in office. The evil bastard technocrat economists, be they Democrat or Republican, are ganging up on us. To be sure Hubbard does call for some government spending cuts, but this is a smoke screen. They are much smaller than the tax increases and government will find ways around them to keep on spending, the tax increases will stay.