{"id":16224,"date":"2023-09-01T16:46:27","date_gmt":"2023-09-01T16:46:27","guid":{"rendered":"https:\/\/isafespend.com\/personal-finance\/taxes\/ramaswamys-dynamic-debate-performance-is-paired-with-an-incoherent-economic-agenda\/"},"modified":"2023-09-01T16:46:27","modified_gmt":"2023-09-01T16:46:27","slug":"ramaswamys-dynamic-debate-performance-is-paired-with-an-incoherent-economic-agenda","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=16224","title":{"rendered":"Ramaswamy\u2019s Dynamic Debate Performance Is Paired With An Incoherent Economic Agenda"},"content":{"rendered":"
\n

Following the first Republican presidential primary debate, businessman Vivek Ramaswamy seems to be having a moment. That makes it a good time to explore his unorthodox fiscal agenda.<\/p>\n

While in many respects his platform appears to be standard Republican playbook, it includes some real surprises. But his unrealistic assumptions, yawning gaps, constant evolution, and internal inconsistencies make it hard to know how he\u2019d lead the nation\u2019s tax and budget policy.<\/p>\n

You won\u2019t find many specifics on Ramaswamy\u2019s campaign website, but he is more forthcoming in his many public appearances. In sum, Ramaswamy insists the nation can grow its way out of the federal debt even as he\u2019d significantly cut taxes, especially for the wealthy. And he identifies few ways to cut spending other than by slashing the federal civilian workforce, which accounted for about 5% of federal spending in 2016.<\/p>\n

Historic Growth, But How?<\/strong><\/h2>\n

Ramaswamy insists his economic policies, which also are largely unspecified, would allow the U.S. to grow its way out of its $26 trillion public debt and end its annual deficits, now 5.9% of the gross domestic product (GDP).<\/p>\n

<\/fbs-ad><\/p>\n

He promises 5%-plus annual economic growth, a level reached only twice in the past 40 years, and both times for one year following a recession. But he insists even 3% growth would eliminate budget deficits.<\/p>\n

Ramaswamy seems to ignore that the two biggest drivers of growth are improved worker productivity and increases in the labor force. There is little government policy can do in the short run to boost productivity, which is largely a result of technological advances. And all it could do to increase the labor force is open the door to significant immigration, but Ramaswamy favors more curbs on new immigrants and would deport undocumented workers already in the U.S.<\/p>\n

But to his point, would 3% annual GDP growth eliminate the budget deficit? Nope. By one estimate, labor productivity would have to triple for decades to even bring the debt back to historical levels.<\/p>\n

Up And Down On Taxes <\/strong><\/h2>\n

Curiously, tax cuts seem to be something of an afterthought for Ramaswamy. In a May 18 interview with Wall Street Journal<\/em> editorial page editor Paul Gigot, Ramaswamy tried to explain why he focuses so much on regulatory and monetary reform and so little on tax policy.<\/p>\n

His explanation: \u201cReducing taxes is absolutely table stakes for being a pro-growth candidate, and I am, but you’re just hearing me put more of an emphasis on what I don’t even require necessarily the permission or forgiveness of Congress to do.\u201d<\/p>\n

In July, Ramaswamy signed Americans for Tax Reform\u2019s no-tax-increase pledge, according to the group\u2019s website. But in his 2022 book, Nation of Victims<\/em>, he seemed to embrace a 59% tax on inherited wealth he said was proposed by progressive economists Thomas Piketty and Emmanuel Saez. While it is not quite what they suggested, it is close.<\/p>\n

Ramaswamy wrote he was not wedded to 59% but said, \u201cThe point is the inheritance rate should be very high. If anything, I\u2019d take the figure Piketty and Saez arrive at as a minimum.\u201d<\/p>\n

Such a levy would clearly violate his pledge and he has since walked it back, calling it merely a \u201cmathematical calculation.\u201d Indeed, he now says he opposes any \u201cdeath tax.\u201d<\/p>\n

Ramaswamy also has been largely silent about whether to make permanent the individual provisions of the 2017 Tax Cuts and Jobs Act, a step that would add more than $3 trillion to the debt over 10 years.<\/p>\n

A 12% Flat Tax <\/strong><\/h2>\n

However, he says he does favor a 12% flat tax \u201celiminating cronyist (sic) deductions and loopholes.\u201d Maybe that means a flat rate income tax. Or perhaps the Fair Tax. The Tax Policy Center estimates such a national sales tax levied at a tax inclusive rate of 23% (a 30% markup at the register) would add nearly $18 trillion to the federal debt over a decade, assuming a reasonable amount of tax avoidance.<\/p>\n

Oddly, Ramaswamy buries his plan on a website page where he denies supporting the estate tax. It is a curious place to talk about completely remaking the federal tax system.<\/p>\n

Ramaswamy also says he\u2019d eliminate the IRS (among many other federal agencies), a promise made by many Fair Tax supporters. He does not explain who would collect and administer his new tax proposal.<\/p>\n

Mostly Silent On Spending<\/strong><\/h2>\n

Ramaswamy avoids discussing spending reductions. For example, asked at a New Hampshire town hall about Social Security, his only response was \u201cno cuts for seniors\u201d before he pivoted back to his pitch for 5% GDP growth. He said he would address \u201cquirks\u201d in the program only after the nation reaches that growth target.<\/p>\n

When it comes to monetary policy, he promised to cut staff at the Federal Reserve by 90%, repeal its mandate to target full employment, and create a \u201cstable dollar\u201d by tying it to a \u201cbasket of commodities.\u201d But research suggests that in the (mostly developing) countries that link their currencies to commodities, the practice makes currency more volatile, not more stable.<\/p>\n

Vivek Ramasawmy is a talented political performer who grabbed much of the attention at last week\u2019s GOP debate. But his economic policy agenda is incoherent.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Following the first Republican presidential primary debate, businessman Vivek Ramaswamy seems to be having a moment. That makes it a good time to explore his unorthodox fiscal agenda. While in many respects his platform appears to be standard Republican playbook, it includes some real surprises. But his unrealistic assumptions, yawning gaps, constant evolution, and internal<\/p>\n","protected":false},"author":1,"featured_media":16206,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56],"tags":[],"class_list":{"0":"post-16224","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-taxes"},"yoast_head":"\nRamaswamy\u2019s Dynamic Debate Performance Is Paired With An Incoherent Economic Agenda | iSafeSpend<\/title>\n<meta name=\"description\" content=\"Following the first Republican presidential primary debate, businessman Vivek Ramaswamy seems to be having a moment. 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