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| Misinterprets Auerbach studies OpposingArgument1 #231733 Two of the cited studies involve Alan Auerbach, generally recognized as one of America's most prominent tax economists. But Auerbach has apparently disavowed their interpretation of the studies (see article by Ezra Klein cited below). | |
+Citations (1) - CitationsAdd new citationList by: CiterankMapLink[1] Economists to Romney campaign: That’s not what our research says
Author: Ezra Klein
Publication info: 8 August 2012 - Washington Post blog
Cited by: Peter Baldwin 9:46 AM 22 October 2012 GMT
Citerank: (1) 231735Studied tax proposals differentThe kind of tax reform considered in the studies cited by the Romney economic advisers where different from Mitt Romney's current proposal. Hence the conclusions do not hold.1198CE71
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| | Excerpt / Summary The key argument the Romney campaign makes for their candidate’s plan comes toward the end, when they try and answer the criticism of the vague tax-reform proposal. ”The Romney tax reform plan will increase GDP growth by between 0.5 percent and 1 percent per year over the next decade,” Romney’s economists write. “These long-run gains from tax and budget reform have been the subject of significant study by economists, as documented in the Appendix.”
So I turned to the appendix. Of the four studies mentioned, two of them are co-authored by Berkeley economist Alan Auerbach. When I looked deeper into the studies, however, they didn’t seem all that applicable to Romney’s tax plan. The Romney campaign, for instance, was using an estimate from a simulation Auerbach ran in which he replaced the income tax with a consumption tax. If the Romney campaign proposed such a policy, that would be very big news. But they have not proposed such a policy.
So I e-mailed Auerbach the relevant quote from the Romney campaign’s paper, and added two questions: “Given what we know and don’t know of the Romney plan, is it reasonable to attach these kinds of dynamic estimates to it? Do you think that reporters like me should assume that the 0.5-1% gdp boost is a reliable base case?”
His response came quickly. “I did not see the [Romney campaign's] paper, but from your description the basic answer to both of your questions is ‘no’,” he replied. His paper looked at “a much bigger tax change than Romney is proposing.” It also “assumed that all tax changes were revenue-neutral on an annual basis; the size of the Romney tax cuts makes this a questionable assumption.”
So, that’s three economists named in the Romney paper, not one of whom would sign on to the interpretation the Romney paper gave to their work. |
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