The Fiscal Delusion

In a New York Times opinion piece, Advisory Council member Robert E. Rubin suggests that the focus on reducing or eliminating tax expenditures to address the fiscal cliff and the nation’s long-term fiscal trajectory is misguided. Rubin argues that many of these cuts would hit important and popular policy programs and ultimately would not create enough savings to have a significant impact on tax rates or the budget deficit. He also suggests that continuing to discuss proposals that would reduce tax rates and deficits, such as the Simpson-Bowles plan, could backfire. Rubin highlights data from a Hamilton Project paper, “A Dozen Economic Facts About Tax Reform,” that show lowering individual income tax rates would modestly increase the earnings of the typical American family while substantially increasing the federal budget deficit. Read the full piece here.