Paul Krugman, in his latest column, writes:
The surprise about the Obama plan is how much in the way of tax breaks it contains, and how much that cuts into the revenue available for other things, especially health care.What's surprising isn't Obama's tax proposal, but that a great economist like Paul Krugman would be so blind to the economics behind campaign proposals. Voters want two things when it comes to tax policy: lower taxes and a balanced budget. Thus, a vote-maximizing politician will want a campaign proposal that promises voters both. This is why the Laffer curve was such an effective
Barack Obama’s tax plan is more responsible than Mr. McCain’s: relative to current policy, the Tax Policy Center estimates, the Obama plan would raise revenue by $700 billion over the next decade, compared with a $600 billion loss for Mr. McCain.Check-mate, professor.