FISCAL WIZARDRY….Larry Kudlow applies his keen intellect to our overcomplicated tax system:
For example, we don’t need six income-tax brackets. Here’s a thought: Take the 33 percent bracket that starts at $188,450 and get rid of it. Ditto for the 28 percent bracket at $123,700 and the 25 percent bracket at $61,300. Get rid of them. Collapse it all down into one simple 15 percent tax bracket. Then figure out what kind of spending cuts are necessary to finance it.
What an innovative idea! As part of a “middle class tax offensive,” cut the tax rate on millionaires from 33% to 15%! I wonder why no one else has ever thought of that?
But here’s my proposal. My back-of-the-envelope calculation says Larry’s fiscal brainstorm will cost us about $250 billion. So now that I’ve figured that out for him, how about if he games out the spending cuts first and then we take a look at his revenue ideas? It’s funny that no one ever wants to do that, but $250 billion in cuts to the non-defense, non-security, non-Medicare, non-Social Security, non-interest categories of the federal budget ought to be pretty easy for a bunch of fiscal barracudas like the modern GOP, shouldn’t it? And I think the Republican presidential field would be pretty pleased to run on all these spending cuts once somebody puts them on the table. So let’s hear it.
On the bright side, at least Larry is conceding that these tax cuts would require spending reductions in the first place. In his usual alternative universe he would have just said they’d pay for themselves and no reductions would be necessary, so I guess that’s progress. Then again, maybe he just momentarily forgot his talking points today.