In my professional work, I focus on US economic policy – taxes, budget, macroeconomics, etc. My personal blog covers those issues too, but it also allows me to explore the interplay of economics, finance, nature, and daily life. I haven’t had a chance to use that flexibility much recently, but some of my older posts apply economics to fun issues like eating guacamole and trying to defeat the invasive lionfish (which are a problem throughout the Caribbean including Cuba).
-On April, the Trump administration released a Tax Plan that could reduce federal revenues by as much as $7.8 trillion over the next decade, according to new estimates by the Tax Policy Center. You previously directed the Urban-Brookings Tax Policy Center and you were an acting director of the Congressional Budget Office (CBO). What do you think about this tax cuts plan, as a fiscal policy expert?
President Trump’s proposals raise several big concerns. Are we talking about tax reform or tax cuts? Trump likes to talk about major tax cuts. But the Republicans leaders in Congress are focused on revenue-neutral tax reform. Which will it be? If the president wants to do tax reform, what tax increases will he support to pay for any new tax cuts? He’s mentioned a few–e.g., limiting some tax deductions–but they are nowhere near enough to pay for all the tax cuts he’s endorsed. Also, does the president want to make the tax code less progressive? Does he want to shift some of the tax burden from people with the highest incomes down to the rest of the population. He and his advisors sometimes deny that they want to give a tax cut to the richest Americans. But so far, his proposals would do exactly that.
-During the 2016 campaign, Trump proposed $1 trillion in investments in infrastructure such as roads, bridges, and airports. Do you think is possible? Will Congress approve it?
Trump’s vision for infrastructure relies heavily on the private sector. He talks about $1 trillion in investment, but what he means is $200 billion from the federal government and $800 billion from the private sector and perhaps state and local governments. There is wide agreement among Republicans, Democrats, and independents about the potential benefit of increased infrastructure investment. But there’s much less agreement when you get to specifics about particular projects, funding, construction rules, etc. Congress has been so focused on health policy and tax reform, that it’s hard to see how infrastructure gets attention soon.
-The republican representatives Mark Meadows, Scott Perry and Jim Jordan offered a legislative proposal to require the Congressional Budget to rely on outside institutes. What do you think about this proposal?
As I wrote in a recent post, I think it’s a terrible idea. CBO is one of the jewels in our system of government. The agency is a team of professional analysts who do their best to inform Congress and the American people about the potential impacts of new legislation. That’s incredibly valuable. I work at one of those outside institutes, and believe the work we do is vital as well. But we can’t and shouldn’t replace CBO. Congress deserves its own team working exclusively for it.
-Do you think that the United States should play a bigger role fighting the climate change? What do you think is the right thing to do?
Yes, I do think the US can and should play a bigger role combating climate change. But doing so is clearly not a priority of the Trump administration. Like most economists, I think a substantial tax on emissions of carbon dioxide and other greenhouse gases should be a central part of our strategy. I’ve been in DC long enough, however, to appreciate that such a tax is a long shot and that we have to focus on other steps.
-You also advice start-up companies. How much you consider your macroeconomic prospects on your advices?
We usually focus on business models, strategy, fundraising, and the policy environment. Macroeconomic concerns come up only occasionally.
Last week, my wife, a niece, and I spent several hours with green sea turtles (tortuga blanca – I don’t know why they change color between English and Spanish) laying their eggs on a beach in Mexico. The mother turtles work so hard climbing up the beach, digging a deep hole, laying eggs, and then returning to the sea. Just as they have for millions of years. It was a very primal experience witnessing them nesting.
-Have you ever visited Cuba? Are you interested? We have crocodiles.
I would love to visit Cuba, meet people, and explore. I bet there’s some wonderful snorkeling? I’ve seen crocodiles in Florida and Mexico; it would be fun to encounter their Cuban cousins. Cuba may also offer the last hope of finding an Ivory-billed Woodpecker (carpintero real, a name also applied to other, still existing woodpeckers). Sadly, they are likely extinct in the United States, but there’s a slim chance they persist in Cuba. Here’s a nice story of a search for them: http://www.audubon.org/