The New York Times has a short article today that seems primed to cause maximum alarm, headlined, “Jeb Bush’s Tax Plan Would Cause $8.1 Trillion Budget Hole, Analysis Finds.”
I’ve read the article, and while it deals with the potential problems and fallout from Jeb Bush creating such a big revenue shortage, its says virtually nothing about how this analysis from the Tax Policy Center was done:
This new analysis tries to shed some more light on those questions with the help of a complex model. The Tax Policy Center found bigger revenue losses ($6.8 trillion) than a conservative Tax Foundation analysis and smaller than one by the more liberal Citizens for Tax Justice. That $6.8 trillion hole grows to more than $8 trillion when the added interest costs are added in, however. And the new report warned that the amount of government borrowing could also drive up interest rates and swallow up money sought by private investors.
It’s very odd that the Tax Policy Center is being positioned as the “moderate” organization relative to “the more liberal Citizens for Tax Justice.” The Tax Policy Center is joint effort by the Brookings Institution and Urban Institute, two left-leaning think tanks. What we have here are a liberal and an even more liberal critique of a conservative Republican’s tax plan, and the former is being given great credence by The New York Times. Further, it’s hard to take these numbers seriously without examining the methodology used to analyze Bush’s tax plan, which the article doesn’t discuss. It’s hard to trust that the media reporting on this stuff have any idea about how these numbers were arrived at, as we saw at the GOP debate in October when CNBC’s John Harwood and Senator Marco Rubio tangled over the details of Rubio’s tax plan.
Fortunately, over at Opportunity Lives, John Hart has written an excellent piece explaining the problems of a media all too eager to regurgitate figures from the host of think tanks doing tax analysis:
On the policy front, conservatives have pushed a platform of reform in recent years, only to be met with false political attacks, aided and abetted by a liberal policy infrastructure. . . In both campaigns, Democrats laundered their attacks through supposedly non-partisan entities like the Tax Policy Center (TPC), a joint project of the Urban Institute and Brookings Institution. In 2008, the TPC did little to rebut Obama’s false claim that McCain wanted to tax people’s health care. In 2012, the TPC sponsored a paper from economists Samuel Brown, William Gale and Adam Looney that wrongly suggested Romney would raise taxes on the middle class. As we move closer to a general election, reformers ought to approach the battle of ideas with some clear thinking about who can sincerely serve as honest brokers. The debate moderators have been big news in the 2016 campaign but the far more important referees are off camera — the wonky scorekeepers at tax organizations who can shape voters perceptions. Republicans can avoid a third act in this drama by refusing to play ball with any tax analysis group that 1) fails to adhere to basic standards of transparency, and 2) declines to use the real-world accounting practice known as “dynamic scoring” that accounts for the macroeconomic effects that result from major changes in tax policy.
Go ahead and read the whole piece here. If you want to understand economic debate in 2016, and make sense of the deluge of claims and counterclaims about presidential tax plans, Hart’s article is essential.
