During his first press conference since he was re-elected, President Obama today criticized the tax approach that Speaker of the House John Boehner (R-OH) and many other Congressional Republicans have proposed. Boehner and the rest of the GOP have recently suggested cutting tax rates, but raising more federal revenue via a combination of closing loopholes and counting on the economic growth that tax cuts will supposedly cause.
Obama derided “dynamic scoring” — the revenue increases that conservatives claim will occur after tax cuts — saying he would oppose any efforts to only “sorta-kinda raise revenue”:
What I will not do is to have a process that is vague, that says we’re going to sorta-kinda raise revenue through dynamic scoring or closing loopholes that have not been identified. And the reason I won’t do that is I don’t want to find ourselves in a position six months from now or a year from now, where low-and-behold, the only way to close the deficit is to sock it to middle-class families...............
Obama also rejected the notion that he would accept new revenue solely via closing deductions and eliminating loopholes for the wealthy, and not via raising marginal tax rates.
There is little evidence that tax reform that lowers rates and cuts loopholes will spark appreciable economic growth that will increase revenue. For instance, as conservative economist Bruce Bartlett shows, the tax reform package of 1986 did not increase growth. Several other studies show the same thing. As Citizens for Tax Justice added, “the highest priority of tax reform should be raising revenue — real revenue, not the voodoo-economics sort of revenue gains that Boehner mistakenly claims will come from tax-rate reductions.”
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