Columbia Business School Dean Glenn Hubbard makes good sense about how we need to approach deficit reduction and tax reform.
Dean Hubbard, a member of the ACCF Center for Policy Research’s Board of Scholars, notes that the huge U.S. deficit is primarily a spending problem. He opposes raising marginal income rates because it would not make a significant dent in the deficit. He does support reducing deductions (as did the President’s National Commission on Fiscal Responsibility and Reform). He also suggests addressing entitlement spending by slowing the rate of benefit growth for middle and upper income social security recipients as well as trimming benefits under the Patient Protection and Affordable Care Act for upper income individuals. Hubbard’s conclusion that the U.S. would be better served by adopting a long-run tax reform plan which moves toward taxing consumption more and saving and less has been substantiated over the last 30 years by the analyses of public finance scholars.
As Winston Churchill said, “you can always count on Americans to do the right thing after they’ve tried everything else” Could we be near that point in U.S. tax policy?