Economists to debate tax reform Tuesday at Seminars at Steamboat
August 19, 2013
Steamboat Springs — Even if everyone can agree that tax reform is needed, any actual policy seems to be separated by a thin, if deep, chasm.
"In terms of what's on the table politically, it's sort of everything and nothing," said William Gale, vice president and director of the economics studies program at The Brookings Institution.
Gale will be debating tax reform with Martin Feldstein, chief economic adviser to President Ronald Reagan and professor of economics at Harvard University, at Seminars at Steamboat on Tuesday.
Belle Sawhill, who will be moderating the event and is a colleague of Gale's at The Brookings Institution, said Monday that a lot of discussion about taxes centers on simplifying the system, lowering marginal rates, raising some revenue and limiting or simplifying some tax deductions.
"I believe both of them are interested in that type of reform," she said. "They might differ on some of the specifics."
The discussion on the specifics is that of degrees, Sawhill said.
Even that window of reform goes from narrow to nil in the face of Grover Norquist's pledge barring all tax increases, which has been signed by a majority of Republican legislators in the U.S. House and Senate.
"I personally believe that it's a fiscally irresponsible pledge," Gale said, noting some of the signees have voted for Medicare expansion, two wars and tax cuts. "It's been used more as a facade then it has been a disciplinary tool."
Gale said he doesn't see any serious momentum to enact broad-base tax reform.
"In that sense, nothing is on the table," he said. "Equally, you can’t rule out anything."
The current tax reform debate is too narrow, Gale said.
"There are two big potential ways to raise revenue that we're not even talking about," he said. "One is the value-added tax, and the other is the carbon tax."
Feldstein was a member of Ronald Reagan's economic team and remains an influential figure. He is a longtime deficit hawk who favors low marginal tax rates, stating they have the ability to spur the economy.
"They're both top-notch economists," Sawhill said. "They agree on some things and disagree on others. They both pay attention to the facts and what the research says."
To reach Michael Schrantz, call 970-871-4206 or email mschrantz@SteamboatToday.com