Tax expert: Romney deduction cap doesn't compute

[anvi]

In order to successfully tackle our massive and perilous deficit, we will have to both make cuts to our largest spending programs (and finding ways to hold down health care cost inflation sure wouldn't hurt) and raise revenues net.  We have to make painful spending cuts no matter how much we can reasonably raise revenues, and we will have to raise revenues net from both the upper and middle classes no matter how much the economy can reasonably be expected to grow.  Romney wants everyone to believe we can tackle the deficit without raising net revenues from anyone.  Obama wants the middle class to believe that we can close the deficit hole by only taxing the wealthy more and shaving around the edges of entitlement spending.  Both are wrong, and worse, both know better, which means that both of them are lying.  So, why pick between them?  Because only one of them will win, because both citizens and the states still need federal government support, and because you can't recover from debt if you refuse to make more money.  Plus, re Nathan, I don't want Mitt nominating federal judges.

[anvi]

Politico, when you read English sentences, do you understand them?  Or, more likely, do you just selectively pay attention to whatever you want that will allow you to drop as many of your memes into your posts as possible?  I said both painful spending cuts and raising revenues net.  If we're going to successfully tackle the deficit and maintain a functional system of government, we have to do both.  Insofar as either candidate suggests we only have to do one of them, they are not telling us the truth.        

[anvi]

We are talking about decreasing the deficit in this thread.  For that, you need long-term, phased in spending cuts and revenue hikes.  Tax increases and spending cuts will have to be phased in over a ten year period in order for the economy to be able to absorb them, nobody is suggesting that they be phased in right away.  

How the deficit reduction process interacts with labor market growth is not a straightforward matter.  The economy is actually doing fairly well right now, and the reason the labor market is lagging is because businesses have found ways to meet productivity levels that correspond to current demand with smaller domestic labor forces.  Given current levels of demand, they are not going to start hiring swaths of people just because of a marginal rate cut that places their tax liability somewhere around the current effective rate.  They'll start hiring more when there is increased demand and thus need for increased productivity.  That's why deficit-reducing measures have to be phased in over time, so that process can happen.  But the deficit reduction measures have to be phased in, unless you want ever-increasing dangers of further credit downgrades and spiking interest rates in the future, which will do far more harm to the economy that slight upward adjustments in net tax revenues for everyone.
   

[anvi]

True that, Ernest.  My expectations often aren't strongly enough attached to reality.  Oh, well.