The tax plan put forward by Romney is bad politics for a number of reasons.
- It bungles specificity. If you are going to make a tax reform proposal, you either need to be very specific or very non-specific. If you are going to be specific, you need to have done the distributional analysis and be ready to respond. If you are going to be non-specific, go so high level (revenue neutral base broadening) that the plan is inherently a goal rather than the plan. By doing neither, the Romney plan opened itself up to analysis like that done by the TPC and the campaign was not ready for the response because it hadn't done the work.
- The plan itself is fundamentally irrelevant fiscally. Since the plan, unlike Simpson-Bowles for example, was not designed to increase revenues; it doesn't actually change the fiscal picture. Thus, in a campaign that should be about profligate current and planned future spending, this is a massive distraction that has exactly zero impact on the deficit.
- The plan lacks foundation. If you are going to make tax reform a central plank of your campaign, you need to establish the foundation of what impact you are expecting from tax reform. Vague claims about unleashing growth or pro-growth reform are insufficient because revenue neutral tax reform is, by definition, going to have winners and losers and the losers are going to complain.
But beyond bad politics, the plan is also unnecessary. Change, particularly major change, is inherently difficult. Revenue neutral tax reform is not going to materially affect our fiscal trajectory nor improve the economy materially. As such, putting a difficult policy that has a low return on the table is not a policy we need to embrace at this point. The current tax code will get the job done. Why change what you don't have to?
None of this should be interpreted as opposition to tax reform. As readers know, I favor far more radical tax reform than what is proposed by Romney and Ryan. It's simply a bad policy judgment at this point in time.