TO GRASP the utter fiscal irresponsibility of the Republican presidential campaign so far, consider these statistical realities, from the Congressional Budget Office.
Under current law (a relatively optimistic policy assumption), the U.S. government is on course for high and rising annual budget deficits after 2018, leading to national debt equal to 103 percent of economic output by 2040. In that year, four of every five federal dollars spent would go to entitlements and interest, with one left over for every other need, including defense. Avoiding this scenario, merely to the extent of keeping the debt at today’s already historically high level (74 percent of output), would require a downward adjustment in the projected debt accumulation of 1.1 percent of economic output each year for the next quarter-century. That’s the equivalent of 5.5 percent less spending in each of those years, or 6 percent more taxes.
In the face of these realities, the major GOP candidates are proposing nothing like such a huge cut in spending — while they are proposing tax plans that would slash revenue .
Not surprisingly, businessman Donald Trump’s plan is the most implausible, costing the treasury $10.1 trillion over a decade, according to the Tax Foundation. Sen. Marco Rubio’s (Fla.) would cost $2.4 trillion; former Florida governor Jeb Bush’s plan, $1.6 trillion; and Sen. Ted Cruz’s (Tex.), $768 billion. (And yes, the Tax Foundation did account for the higher growth these cuts would supposedly encourage, meaning that the estimates are probably on the low side.) Retired neurosurgeon Ben Carson is calling for a flat tax, as is former Hewlett-Packard chief executive Carly Fiorina, but their plans have been too sketchy to “score” so far. And don’t get us started about the fact that upper-income people would benefit most from each of these plans.
To be sure, the blue-sky quality of the Republican discussion has its benefits. Radical but sensible ideas have arisen amid the radical but nonsensical ones. Mr. Rubio’s refundable child tax credit might help struggling families offset their payroll tax burden; Mr. Cruz (like Sen. Rand Paul of Kentucky) advocates a form of value-added tax, which could raise revenue more efficiently with fewer economic distortions than the current system. Mr. Carson bravely called for ending the mortgage interest deduction. While it’s absurd to abolish the Internal Revenue Service, as Mr. Cruz promises, or to speak of reducing the tax code to three pages, a la Ms. Fiorina, they are not wrong to target the current law’s costly complexity.
If Republicans were focusing on radical tax reform, as opposed to radical tax reduction, we’d be more open to their ideas. So might the public. GOP candidates are fixated on the ideological preferences of their primary electorate, but the broader electorate is not nearly as anti-tax as it once was. In a tax-season poll this year, 56 percent of Americans told Gallup their federal income taxes were “fair.” The poll showed the public evenly split between those who think taxes are too high and those who don’t; 15 years ago, 63 percent said “too high.”
Perhaps the people understand what GOP politicians do not: No sustainable fiscal path could include such massive tax cuts, but the road to ruin just might.