Doubling Down On W by Paul Krugman

As I’ve said, it’s hard these days for liberals to look at the state of the Republican primary without feeling a lot of Trumpenfreude. But one downside of The Donald’s turn in the spotlight is that the policy positions of the tonsorially conventional candidates are going largely unscrutinized, which is bad. For the fact is that the whole field has taken a hard right turn into fantasyland.

Take, for example, tax policy. Big tax cuts tilted toward the 1 percent were George W. Bush’s signature domestic achievement. But they failed to deliver the promised prosperity — and given the changes in the environment since then, any repeat of his push should seem unattractive. After all, W pretended simply to be handing back a budget surplus; today’s GOP has spent years hyperventilating about deficits. Inequality is a big issue, too, in a way it wasn’t at the end of the Clinton boom. So you might think that the current crop of candidates would be proposing something different.

Instead, what we’ve gotten is a doubling down. So far, the Tax Policy Center has only done full analyses of the Jeb! and Trump tax cuts, but that’s enough to get the shape of things — and to make a comparison with the W cuts. [In what follows, I make comparable debt estimates for W by using projected revenue over the first decade relative to actual GDP; and I use the Center’s analysis of what would have happened if the W cuts had been allowed to expire for distributional impacts.]

So, first, both Jeb! and Trump are proposing cuts that would do more fiscal damage than anything W enacted, with the following estimates of the 10-year increase in debt as a percentage of GDP:

W: 18.2
Jeb: 28.2
Trump: 39.2

To get a picture of distribution, here’s the change in after-tax income for the middle quintile, the top 1 percent, and the top 0.1 percent:

Photo

CreditTax Policy Center

So the current crop of candidates, even the supposedly moderate ones, are proposing to blow a bigger hole in the budget than W ever did, and use the extra debt to do even more to increase inequality.

It’s pretty amazing. The next thing you know, they’ll be bringing back the architects of the Iraq disaster to do it all over again. Oh, wait.

Paul Krugman