This tax-and-budget analysis from Bruce Bartlett is wrong on many levels — in both its particulars and its overall sweep.

Bartlett claims the famous supply-side tax-cutters at The Wall Street Journal editorial page have, in a major reversal, opened the door to a Value Added Tax and thus a major expansion of overall taxation and American government. He thinks a new Journal opinion article from Columbia Business School dean Glenn Hubbard represents a big shift in the thinking of economic conservatives. I don’t see it that way at all. (more…)

Roger Altman sees many of the same slow-growth problems that David Malpass warned against . . .

federal deficits may average a stunning $1 trillion annually over the next 10 years. This worsened outlook is stirring unease on Main Street and beginning to reorder priorities for President Barack Obama . . . .

The burst of spending in recent years and the growing likelihood of a weak economic recovery. The latter would mean considerably lower federal revenues, the compiling of more interest on our growing debt, and thus higher deficits. . . . the latest data suggests that we’re on a much slower path. Probably along the lines of the most recent Goldman Sachs and International Monetary Fund forecasts, whose growth rates average about 2% for 2010-2011.

A speedy recovery is highly unlikely . . . .

. . . but unlike Malpass’s pro-growth strategy, Altman proposes to make matters worse:

we’ll have to raise taxes.

Today, the U.S. ranks next to last among the 28 Organization for Economic Cooperation and Development nations in total federal revenue as a share of GDP. Our federal revenues represent 18% of national output, down from 20% just 10 years ago. That makes the mismatch between our spending and our revenue very large, producing the huge deficits we face.

We all know the recent and bitter history of tax struggles in Washington, let alone Mr. Obama’s pledge to exempt those earning less than $250,000 from higher income taxes. This suggests that, possibly next year, Congress will seriously consider a value-added tax (VAT). A bipartisan deficit reduction commission, structured like the one on Social Security headed by Alan Greenspan in 1982, may be necessary to create sufficient support for a VAT or other new taxes.

. . . it is no longer a matter of whether tax revenues must increase, but how.

Keith Hennessey with two posts containing lots of good charts on tax trends over the decades and where we are likely headed.

“Even when you make [a tax form] out on the level, you don’t know when it’s through if you are a crook or a martyr.”

– Will Rogers, as relayed by Tom Herman, the excellent long-time tax writer for The Wall Street Journal, in his last column today, April 15, 2009

Among the economic doldrums, we’ve spotted an industry ripe with innovation: Tax accounting! Our ingenious estate tax is forcing increasing numbers of taxpayers to create “intentionally defective grantor trusts.” How, you might ask, can I get one of those? Easy . . .

she will start the trust by giving it some money — $193,670 — to buy the buildings. She won’t owe any gift tax on that transfer, because taxpayers get a lifetime $1 million credit to shield their gifts.

With the $193,670 in seed money, plus a loan for $643,030 from the couple, the trust will buy their stake in the buildings, currently valued at about $1.2 million. The interest rate over the loan’s nine-year term: a mere 2.15%.

In another positive twist, the trust won’t have to pay Drs. Massiah and Emanuele back the full $1.2 million. Because the couple owns the real estate through a limited liability corporation, they can discount the value of the stakes they sell to the trust.

The upshot: The trust only has to pay back $643,030, plus 2.15% interest, says Rudy Fusco, the couple’s estate-planning lawyer at Leeds Morelli & Brown PC in Carle Place, N.Y.

The estate tax doesn’t benefit families, the economy, and not even the government. It raises very little revenue but imposes huge dead weight losses on the economy. It helps only estate lawyers and tax accountants.

Harvard’s Robert Barro interviewed about Keynesian spending, tax cuts, Paul Krugman, and. . .

Tax cuts are bound to be better. I think the best evidence for expanding GDP comes from the temporary military spending that usually accompanies wars — wars that don’t destroy a lot of stuff, at least in the US experience. Even there I don’t think it’s one for one, so if you don’t value the war itself it’s not a good idea. You know, attacking Iran is a shovel-ready project. But I wouldn’t recommend it.

“tax increases appear to have a very large, sustained, and highly significant negative impact on output.”

“tax cuts have very large and persistent positive output effects.”

tax cuts do “not have any clear impact on revenues at horizons beyond about two years.”

– Christina Romer, Berkeley economist and Obama appointee as chair of the Council of Economic Advisors, in two working papers, the most recent versions of which are very timely: November 2008 and July 2008.