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Romney Adviser: Raise Revenues


By John Martin - Posted on 16 July 2011

A couple of weeks ago, Romney economic advisor Greg Mankiw came out in favor of the Bowles-Simpson formula for attacking the deficit, which includes revenue increases in the form of reducing tax expenditures. Here's what Mankiw said, with a link to a more lengthy piece he wrote last fall on the topic:

In the current debate over fiscal policy and the debt ceiling, Republicans have drawn a line in the sand: No tax increases.  But I fear they have lost sight of a key issue: As I discussed in this column, the distinction between spending and taxation is often murky and sometimes meaningless.
 
My advice: Amend your line in the sand to NO INCREASES IN TAX RATES.  Be willing to give up on tax expenditures if we simultaneously make current tax rates permanent--or, better yet, if we lower rates, as the Bowles-Simpson commission suggested.
 
Privately, many Republican campaigns are discussing the merits of revenue increases, and some, I'm sure, probably think they're justified under current circumstances-- especially if they could win a deal from President Obama to cut $4 trillion from the debt. 
 
This makes me wonder; isn't it possible that it'd be worth it for at least one of the Republican candidates to publicly support revenue increases? As the front-runner, Romney shouldn't do anything that would alienate the GOP base, of course. In his case, it's no doubt best for him to keep his advisers' thoughts to himself. But what about the other more moderate candidates. With a guy like Jon Huntsman hovering around 1% in the polls, you'd think he'd be tempted to use this as an opportunity to distinguish himself, and to paint his rivals as supporting misguided policies. (The same could even be said for Pawlenty, who badly needs to create an identity for himself in this campaign.)
 
This all might sound naive, but it's not like Huntsman has much hope gaining traction without something to hang his hat on. If he came out and publicly stated what Republican advisers are saying privately, I don't think he'd do worse than the 1% he now has. He might also be seen as courageous by the independent voters up in New Hampshire who might find more of a reason to support him in that state's primary.

 

That's the problem. Saying something sane and reasonable reduces your chances at winning the GOP nomination. Imagine Bachman and the others turning that into "he wants higher taxes!" It's a lost cause for Moderates in the 2012 pool of candidates-sorry to be so negative. I agree they should try it anyway but sadly I think it will only hurt them more and build up the crazy ones like Bachman. Romney's advisor is right to be open to tax changes that will bring in more revenue but demands to make certain tax cuts permanent will wipe out any gains from that, so even the reasonable ones aren't getting that or they don't care about the math. We need to return to the rates during Clinton AND change the tax code AND get rid of loopholes and subsidies. If we did that, we would not need to obsess over cuts that hurt the poor, middle class and elderly. Why is this so hard to understand and articulate?

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