Mitt Romney's former economic adviser Glenn Hubbard published an op-ed in the Financial Times Tuesday calling for higher tax rates on the wealthy and urging Republicans to outline specific spending cuts rather than vague across-the-board reductions in government spending. Hubbard's comments are noteworthy because Romney resisted both policies during his run for the presidency.
"What should those negotiating the fiscal cliff do?" Hubbard wrote. "The first step is to raise average (not marginal) tax rates on upper-income taxpayers. Revenue increases should first come from these individuals. This means closing loopholes ... Republicans cannot argue for low tax rates without being clear about where [spending] cuts must come from."
As the GOP candidate for president, Romney called for capping government spending at 20 percent of gross domestic product, without detailing what programs should be cut, or by what amounts. When asked during the first presidential debate about what spending he would target, Romney suggested eliminating funding for PBS -- money which amounts to far less than 1 percent of the federal budget deficit.
In fact, while Republicans often cite programs outside of Medicare or the defense budget as priorities for deficit reduction plans, the entire non-defense discretional spending budget totals only about one-third of the federal budget deficit. Romney's vague plan for an across-the-board spending cap would have forced a 22 percent hit to all government programs -- including Medicare -- by 2016, according to an analysis by the Center on Budget and Policy Priorities.
Hubbard's publication of the op-ed after the election underscores the political role that many economists play in Washington. While many economists often hold more practical views than those presented by political candidates, they frequently withold public comments contradicting their employers, or offer defenses of policy proposals with which they do not actually agree.
Hubbard is generally viewed as less beholden to the partisan political world than many of his economist peers. The Romney campaign was able to cash-in somewhat on Hubbard's perception as a reasonable, evidence-oriented economist by giving the impression that Hubbard supported Romney's policies. On tax policy, Romney rejected increasing taxes on the wealthy, and in fact offered a plan to cut their tax rates. Only after the election did Hubbard state that his own reasonable, evidence-oriented views contradicted those of the candidate he was advising.
While Hubbard endorsed raising tax rates on the wealthy, he also pushed back against a campaign theme of President Barack Obama, suggesting that American fiscal woes cannot be remedied by increasing the burden on the wealthy alone.
"A strategy of 'taxing the rich' cannot pay for the entitlement state. If we wanted a larger government as a share of GDP, we would have to raise taxes substantially on everyone," Hubbard wrote. "Mr. Obama cannot argue that we can right the fiscal ship simply by taxing the rich."
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<a href="http://krugman.blogs.nytimes.com/2012/08/10/culture-of-fraud/">The Nobel Prize-winning economist wrote</a> in a New York Times blog post in August: "Romney’s tax plan is now a demonstrated fraud — big tax cuts for the rich that he claims would be offset by closing loopholes, but the Tax Policy Center has demonstrated that the arithmetic can’t possibly work."
Matt Taibbi, contributing editor to Rolling Stone, <a href="http://www.rollingstone.com/politics/blogs/taibblog/the-vice-presidential-debate-joe-biden-was-right-to-laugh-20121012">wrote in a recent blog post </a>: "If you're going to offer an across-the-board 20 percent tax cut without explaining how it's getting paid for, hell, why stop there? Why not just offer everyone over 18 a 1965 Mustang? Why not promise every child a Zagnut and an Xbox, or compatible mates for every lonely single person?"
Harvard economist Larry Summers, a former top adviser to President Barack Obama, <a href="http://www.huffingtonpost.com/2012/10/11/larry-summers-romney-tax-plan_n_1958982.html">recently compared Mitt Romney's tax plan</a> to a hamburger and ice cream diet. He said: "It’s easy to say that 'My plan is to eat ice cream sundaes and chocolate cake and hamburgers as much as I want, my plan is to lose 60 pounds, and my plan is to avoid painful exercise, and those are all my objectives and I'm committed to every one of them.'"
The Tax Policy Center
<a href="http://www.taxpolicycenter.org/publications/url.cfm?ID=1001628">The Tax Policy Center</a>, a nonpartisan, nonprofit think tank, <a href="http://www.huffingtonpost.com/2012/09/11/romney-tax-plan-middle-class_n_1874113.html">recently concluded</a> that Mitt Romney's tax plan is mathematically impossible without raising taxes on the middle class.
<a href="http://www.bloomberg.com/news/2012-10-12/the-final-word-on-mitt-romney-s-tax-plan.html">Bloomberg View columnist Josh Barro wrote</a> in a recent column that the six studies that the Romney campaign uses to claim the candidate's tax plan is mathematically possible "individually and collectively...fail the task."
<a href="http://thinkprogress.org/economy/2012/10/12/1004921/zandi-romney-tax-plan/">Mark Zandi</a>, chief economist at Moody's Analytics, recently said on CNN that when it comes to Romney's tax plan, "the arithmetic doesn't work as it is right now."
<a href="http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/04/romney-tax-plan-on-table-debt-collapses-table/">Washington Post columnist Ezra Klein wrote in August</a> that "the Tax Policy Center’s analysis has removed all doubt" that Romney's tax plan is mathematically impossible.
<a href="http://www.thedailybeast.com/articles/2012/10/11/vice-presidential-debate-live-blog.html">David Frum</a>, contributing editor at Newsweek and The Daily Beast, recently wrote: "Romney's tax cut plan doesn't work. I'm a Republican, I support Romney, etc. But you can't cut that much in such a stagnant economy and expect to break even. Even with a deductions cap, it just won't happen."
Catherine Rampell, economics reporter at The New York Times, wrote of the <a href="http://economix.blogs.nytimes.com/2012/10/01/the-math-on-the-romney-ryan-tax-plan/">the Romney campaign's tax promises</a> in a recent blog post: "Not <em>all</em> of those principles can coexist so long as basic arithmetic survives."