Romney will cut spending; I have no doubt about it.......he has said in interviews that if he is a one term president so be it, he intends to cut spending, reform entitlements, restructure the tax code, lower taxes and work to a balanced budget. Originally Posted by WhirlawayI don't believe for a minute that Romney would cut spending, at least not in any substantial way. Politicians say all kinds of things on the campaign trail, but let's be realistic here. What, exactly, is he going to cut that's going to make any real dent in the deficit?
Remember all the caterwauling over attempts by congressional Republicans to cut about $37 billion from the budget a couple of years ago? And that's only about one-quarter of one percent of GDP. To balance the budget, you'd have to cut about thirty times that much. Even to reduce the deficit to what most economists consider an acceptable level, you'd need to find a combination of spending cuts and tax increases more than twenty times that large.
The notion that Romney can cut taxes 20% across-the-board (which he has said he'll try to do) while reducing the deficit to acceptable levels is simply ridiculous.
Romney would almost certainly reduce spending (or at least the rate of growth of spending) relative to what Obama would do, but that's not saying much.
As for tax cuts we do not need any. However, tax reform that stimulates economic activity we need badly. Things like cutting business taxes sound like gifts to the rich but they would help keep businesses in the US and incentivize investment here. That sounds like and is easy to claim in sound bites as a gift to the rich but it should actually increase revenues to the government. Originally Posted by LazQuite correct.
The U.S. corporate income tax rate has become one of the highest in the world, since nearly every other industrialized Western nation began slashing rates substantially in the 1990s. We are left with an uncompetitive code that's riddled with loopholes and exclusions. The effective rate paid by corporate America is actually fairly low, but the problem is that the code's complexity offers relative benefits to very large, politically connected firms, thus rendering some of their smaller competitors unable to compete.
This is not a brand new problem. Even Jason Furman spoke of the need for rate-lowering and base-broadening reforms back around 2007. But after January of 2009, he seemed to have forgotten all about the issue.
Comprehensive tax reform, in my opinion, is an urgent priority. We need a code that looks like it was designed on purpose, not a monstrosity that just gets junked up with more and more crap every year.
