TaxVox

Much of the reaction to the April 16 Democratic Presidential debate was directed at the moderators for focusing on character and perception rather than policy. But issues got mangled as well—not only by the candidates, but by moderator Charles Gibson. While questioning Barack Obama about his proposal to raise the capital gains tax, Gibson claimed that when the rate has been cut, government took in more money, but when the tax was increased revenue fell. Although this argument warms the hearts of the Wall Street Journal editorial page, the implication that capital gains tax rate cuts raise revenues is not supported by the evidence.

There are few things more frustrating in life than being a budget hawk. You spend your days predicting dire consequences that never quite come to pass, trying to convince voters that their government can’t keep expanding popular programs without paying for them, and hectoring politicians into making votes that would be political suicide. Like Cassandra of Greek myth, you have the ability to foretell the future, but suffer the curse of being unable to change it.

On April 17, the Tax Policy Center posted “Scoring McCain’s Tax Proposals”. Although I remain a fan of efforts by organizations like the Tax Policy Center to analyze taxation issues, the analysis is misleading on the whole and wrong in some particulars.

Senator McCain wants to make government much, much smaller. His specifics on how are sketchy—eliminate earmarks, programs that don’t work, waste… But his tax day speech gives us an idea of how much he wants to shrink the government. A lot. And even more than when we last blogged on the subject back in February.