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MSN Money: Grading Hillary Clinton's Cautious Tax Plan
"The Fiscal Times convened a panel of experts in tax and fiscal policy to analyze the Clinton and Trump tax plans. Details of each plan were reviewed by three well-respected policy experts: William G. Gale, the Arjay and Francis Miller Chair in Federal Economic Policy at the Brookings Institution and co-director of the Tax Policy Center; Doug Holtz-Eakin, President of the American Action Forum and a former Congressional Budget Office Director; and G. William Hoagland, a vice president of the Bipartisan Policy Center and a former Republican Senate budget official."
The final grades varied from A- to D-.
You can read the article if you like. I don't claim to be a tax expert so I'm not qualified to make any comments on the impact of any of the tax plans. However, what it clearly illustrates to me is not who is right or who is wrong, but rather that you can have such a wide variance in grades by three well respected economists. I suppose if you add an MMT economist, you would get another whole new set of grades.
In other threads I have written about going into Clinton's and Sanders's websites to examine and compare proposals on a whole host of issues including taxes. I can make observations based on my limited knowledge, but as I seek more "expert opinion" on the internet from people who are clearly more knowledgeable, I see the similar kind of variances. They either like it or they hate it or maybe something in between. Who should I choose to be "my expert"? I suppose it depends on which politician I like the most. Isn't that what it is all about? Likeability....or other emotions such as anger and hate and fear...or maybe populism...or just tribes. Or Salon versus Vox. Or "what's in it for me?" But critical thinking...NO.
Then there is Donald Trump's tax plan explained according to Vox. I won't go there.
An MMT perspective would ask what the candidates' tax and spending plans will do to employment and inflation, as questions about financial sustainability are inapplicable. Unfortunately, all of these experts seem to think financial sustainability is the only thing that matters.
The government deficit does matter, but not the way we think. In the final analysis, all it tells us is the nominal amount of the non-government's net-surplus. What is happening in the real economy determines how the deficit matters. Is the economy too cold? The deficit is too small all other things remaining equal. Is the economy too hot? The deficit is too big all other things remaining equal. These are basic rules of thumb that have been known for hundreds of years and pre-date Keynesian economics.
Both the Deficit Terrorist approach and an MMT approach to grading and forecasting fiscal plans should involve not just tallying the tax revenue and spending expected, but addressing how these changes would alter the income distribution and secondary flows (second order effects). That would require analysis of the credit expansion, global trade, and the supply of real resources. There are potentially infinite outcomes based on infinite possible combinations and sequences. In short, it's a mathematical and logistic nightmare prone to ideological abuse.
Far better to just set the size of government to what we want it to be over a certain period, and then monitor the economy for signs of overheating or contraction, and then raise or lower taxes as is appropriate for full employment and price stability.
All of this forecasting and predicting means nothing anyway if we cannot apply the correct remedies as needed.