Tim Pawlenty’s Exciting Tax Plan

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"Tim Pawlenty’s Exciting Tax Plan"

The knock on Tim Pawlenty is that he’s boring, but there’s nothing boring about this Tax Policy Center analysis of the distributional impact of his tax plan:

Now of course pointing out that this seems unfair is just “class warfare” and fails to account for the pro-growth nature of the regressive tax change. But note something important. The positive growth impact of regressive tax cuts is often justified in terms of creating incentives to save and invest. But part of Pawlenty’s economic plan is embracing the George W Bush theory that regressive tax cuts don’t need to be paid for with unpopular offsetting spending increases. But if you borrow the money that you’re using to increase incentives to save and invest, you can’t increase the economy-wide savings rate. It’s just money borrowed from the future to put into the pockets of the rich people of today.

Exciting!

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