November 2, 2012
Economic Effects of the Obama and Romney Tax Plans
Over the past several weeks, Tax Foundation economists have published a series of studies that analyze the long-term economic and distributional effects of the tax plans outlined by President Barack Obama and Governor Mitt Romney. These comprehensive assessments were done using the Tax Foundation’s Tax Simulation and Macroeconomic Model which measures how changes in tax policies affect the economic levers that determine economic growth, workers’ incomes, and the distribution of the tax burden.
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If a study assumes that taxes depress work effort and that public goods contribute nothing to GDP growth, of course predicted GDP goes up if we cut taxes and spending on public goods. It's all in the assumptions. Would the Tax Foundation publish a study with any other assumptions? No, because the results would be inconsistent with their politics. This is not economics. It's political advertising.
Posted by: Theodore Seto | Nov 3, 2012 11:42:22 AM
If we cut taxes to zero, I assume economic growth would go up even further than under the Romney plan. Of course, that is putting aside the effect on the deficit. For the same reason, Romney's tax plan shows growth, because he is lowering taxes, and does not consider the effect on the deficit.
If we offered tax credits for everyone rather than paying taxes at all, then I assume economic growth would go up even further. Of course, that is putting aside the effect on the deficit.
Posted by: Hugh | Nov 4, 2012 9:08:54 AM