Maybe we could have a "Grand Compromise" with Obama with these conditions...and in the process conduct a great experiment on supply side economics...The compromise would be: $4 trillion in immediate entitlements only spending cuts. $1 trillion in immediate tax increases on people making $250K and higher. With the following important conditions: 1. We have a bipartisan commission of economists to measure job creation and economic growth following the spending cuts and tax increases. Following a 12 month period from day of enactment of the tax increases, the commission measures the amount of job creation and growth above an agreed upon baseline. 2. If the job creation and growth has not been negatively impacted by more than 3% then the tax increases stay. 3. If jobs are destroyed during the 12 month test period then the tax increases immediately go away and instead 10% across the board tax decreases are implemented. The benefits would be to test once and for all if massive tax increases harm the economy if only on those making $250K. This would provide substantial evidence on whether some of our supply side ideas work and the suggestion that small business and general hiring is negatively impacted by tax increases. By taking this tax question off the table through the experiment, we could focus on better policies.
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7/12/11 at 8:49pm