National Public Radio’s podcast and blog “Planet Money” has recently introduced their presidential candidate for the 2012 election.
Dean Baker of the Center for Economic Policy and Research in Washington, D.C., Katherine Baicker of Harvard, Robert Frank of Cornell, Russell Roberts of George Mason and Luigi Zingales of Chicago are economists. They come from all across the political spectrum and they were given the task to identify major economic polices they could all stand behind.
In doing so, a candidate was born, with a platform that consisted of five tax proposals — plus one change to the criminal code — based on good economics.
There’s one catch, though: This political candidate could never win an election.
Although the candidate would potentially fix the economy, the proposals are just too radical to propose to Americans. Nonetheless, here they are:
1) Get Rid of the Mortgage Tax Deduction
For years, the U.S. has let homeowners deduct the interest they pay on their mortgages. This distorts the housing market, driving up prices for everyone while subsidizing the purchases of expensive houses. This is easily the most controversial proposal, where 53 percent of Americans polled are against it.
2) Eliminate Tax Deductions On Employer-Provided Health Insurance
Neither employees nor employers currently pay taxes on workplace health-insurance benefits. That encourages fancier health insurance coverage, driving up usage and, therefore, health spending overall. This deduction costs the government an estimated $184.16 billion per year, but is opposed by 48 percent of Americans polled.
3) Eliminate the Corporate Tax
Both Romney and Obama have expressed support for at least reducing the highest corporate tax rates in the entire world, but that’s not enough. We need to eliminate it completely. If companies reinvest their money into their businesses, that’s a good thing. Taxing companies in an effort to tax rich people is wrongheaded; just tax the rich people instead.
4) Tax Carbon Emissions
This could lead to higher prices at the pump, but it’s a consumption tax, and can be structured to make sure it doesn’t disproportionally harm lower-income Americans. More, it’s taxing an act that has a negative affect on the environment, thus giving an incentive to stop polluting.
5) Legalize Marijuana
Undoubtedly the most popular platform idea wasn’t a tax but an opposition to criminalization. The fake candidate is in support of legalizing marijuana. According to economists’ reasoning, it costs an exorbitant amount of money to catch, prosecute, and put in jail, criminals of marijuana. Decriminalizing the drug would decrease government spending by a large amount. Taxing it would even add revenue.
6) Shift from an Income Tax to a Consumption Tax
Taxes discourage spending in the category of whatever you’re taxing. Income is a good thing after all, so why do we tax it? Payroll taxes discourage jobs, so instead, impose a consumption tax, designed to be progressive to protect lower-income households.
The extensive discussion about the economy since July has made Americans frustrated. We have listened to Romney boast about his 59-point job and economic plan for months, while Obama has been forced to assure voters that his post-financial crisis, Keynesian spending approach will eventually work out in the long run.
Either way, the economy has the possibility of taking two drastically different routes that won’t include any of these proposals — even though they were proposed by the best minds in the country.
When I go to the polls on Nov. 6, it won’t be about the economy, it will be about social issues. In this case, Obama is the way to go.