Fiscal Reform

In "The Blur Between Spending and Taxes" Gregory Mankiw defends a fiscal proposal which addresses the long-term budget imbalance in the US' economy.

The Bowles-Simpson proposal argues that the federal budget needs to move toward fiscal sustainability and the best way to do so is broadening and lowering tax rates. These measures are expected to increase government revenue and distort incentives less.

However, the left wing disagrees with any action that reduce marginal tax rates on the rich and right pundits are suspicious of any measure that increases government revenues.

Despite political differences, Mankiw affirms that Bowles-Simpson's proposal is the best one to address the nation's fiscal challenges and thus both parties should agree on it.

http://www.nytimes.com/2010/11/21/business/economy/21view.html