So
David Brooks found out that Romney's tax plan, such as it was, wasn't going to work, or else that it isn't 1986. Or both, of course.
That is, if you think of the Romney program as being more or less the same as the Tip 'n' Gip arrangement of 1986, to lower the marginal income tax rates and at the same time close up some of the loopholes, and you figure that it did work then, you may nevertheless want to acknowledge that it won't work now, even if that's what Obama, chastened by the devastating election results, wanted to do...
(What's that you say? Obama
won the election? No doubt that's true, in a simple arithmetical sense, and I suppose that's enough to keep him technically in the office over the next four years. But it wasn't what you could call a
moral victory, and I would think it would behove him to show a little humility for a change, and an appetite for compromise with the people whose massive vote losses were after all the only reason he did win. That, and corruption in the polling industry, since it turned out that not only were Democrats oversampled in poll after poll leading up to the election, but also, shockingly,
in the election itself. But I digress.)
One reason for its not being 1986—beyond the sheer volume of water that has flowed under the bridge since it was—would be the difference in comportment of the baby boomers, then in their powerful prime, now ready to retire. Not only will this bring on more government spending, keeping us in our scooters and catheters, but it will also diminish growth,* at least outside the health care and male enhancement industries, because there will be fewer workers manning the Reserve Army of the Unemployed.
What we evidently need, then, is a tax setup that raises revenue by increasing taxes, and encourages growth by lowering them,
at the same time. In other words, we have to make a break with the 1986 paradigm, which effectively did the opposite, or something very like it, on the basis of the famous Laffer Dinner Napkin Hypothesis (according to which if you draw a curve on a dinner napkin you can be famous forever).
This is where the
Tax from Planet X comes in—the tax that looks like a breath mint, tastes like a candy mint, and works like a horse lowered onto the sumptuous form of an empress (it's a Potëmkin tax).** The X-Tax raises revenue when you think of it as a consumption tax (as four out of five television economists prefer), lowers revenue when you think of it as an income tax (since it taxes only the income you get by allowing your company to consume
you), and blows your mind in all directions.
*Brooks gives some numbers for GDP growth rates, from an average annual rate of 3.2% for the "five decades after World War II" to 2.2% for the foreseeable future, but I have no idea where these numbers come from. I find 3.2% for the six and a half decades from 1947 to 2012. Projections into the future mean nothing unless you know their assumptions on productivity growth and labor force participation, and not much then. One of the most mysterious things about this column is that it has quite a lot of numbers, apparently taken from more than one source, contrary to Brooks's usual practice.
**As I have said before, I give no credence whatever to that disgusting Jesuit-spread story about Catherine and the horse. I'm sorry it keeps coming up.
What I really want to know here is where Brooksie dug that idea up from. I can't believe
Progressive Consumption Taxation: The X-Tax Revisited has been languishing in his Kindle ever since it came out in June (it's #284,068 on the Amazon list) and just suddenly popped up—still less that he read it in the summer and decided to write about it now, because that's not how he works, a couple of weeks being the maximum time for any idea to stay in his in-box before he either writes it up or tosses it out; and in any case he was in 1986 mode all through the campaign, touting the Romney tax views as if he kind of agreed with them.
And nevertheless, what has happened in the last two weeks regarding our Mr. X-Tax? Has celebrated economist Alan Viard of the American Enterprise Institute published something new, or dropped by the Times to get interviewed? Has Brooksie dropped by the AEI to give one of his little talks and autograph some books, or have the two heads talked on TV together?
None of the above, not before the column was published on the 29th, and yet—there
was something on the 30th: Viard turned up on the AEI website with a little series of
one-minute videos explaining the X-Tax to an unsuspecting public, and the Institute's resident bloggist, James Pethokoukis, posted a goodly portion of Brooks's column together with one of Viard's videos. Strange, strange! Was this the retroactionary cause of the column?
No! There's another clue, from wonkster
Dylan Matthews at the Washington Post, who wrote on the 16th inst. about a Race to the Bottom sponsored by the Pete G. Peterson Foundation, its "
solutions initiative" for think tanks to put out deficit reduction plans. The American Enterprise Institute in this story is the dog that didn't bark; it was in last year's round one, but not in this year's round two, where it was in some degree replaced by Douglas Holtz-Eakin's American Action Forum. Indeed, in a fairly large degree, because they've taken the X-Tax over.
And then on cue on the 30th, this admiring Tweet?
Without, let it be noted, mentioning Viard!
Clarifying the case as one of conservative territoriality: poor
David Bradford dies, leaving his X-Tax an X-orphan; Viard picks it up, gives it a warm, loving home at the AEI, consecrates a book to it, brings it to Pete's house, gets no attention; a year later Holz-Bindestrich effectively pees on the AEI, snatching the X-baby to pass it off at Pete's house as his own!
Viard has some tricks of his own; he hooks up with Brooks, somehow persuading him to buttress his claim to the X-infant in a new column***; as soon as the column appears he and Pethokoukis festoon the AEI with X-flowers in welcome. But Holz-Pecker, undaunted, appropriates it on the Twitter to his own praise. And so the war of the think tanks continues.
And all the while I'll bet Brooks has no idea of the passionate little drama unfolding at his feet!
***One possibility is that he set Brooks up with the statistics for the column, always a weak point where Brooks or his interns are concerned.
