The Political Underpinning of Tax Theory

There is no mistaking Professor Gregory Mankiw's political leanings (he advised both Presidents Reagan and the second Bush). Indeed the fruits of his pen can often be seen as more or less subtle justifications for certain Republican policies, something that he was accused of with regularity during the Bush years. As a result, he can rankle some. Much the same could be said of Professor Paul Krugman on the other end of the spectrum, though he likewise spent time on Reagan's advisory council. Indeed the author of 'The Conscience of a Liberal,' though he is a Nobel Prize winner, is identified with liberal punditry more than the dismal science in some quarters.

Despite political differences, the two could almost be mistaken for each other in a lot of ways. Aside from both spending time in the Reagan White House, both are adament free-trade advocates and have both been described as Keynesians, or sometimes New Keynesians, especially in Mankiw's case. Both spent time at MIT finishing Ph.D.s; both write for The New York Times. Both have written some of the best-known economic texts used at universities around the world. However, reflecting the views of the parties they are often identified with, indeed almost as standard bearers, they are diametrically opposed when it comes to tax policy. In particular, and in a timely manner with the expiration of the Bush tax cuts on the horizon, they find little common ground when it comes to taxes for the rich.

As aggressively as the Voice of the Liberal advocates for letting the wealthy pay their 'fair share,' Mankiw advocates for the type of trickle down policies made famous right around the time he was putting in his first shift on a presidential advisory committee. For anyone unfamiliar on unclear on what typical Republicans and Democrats think about taxation policy, both have written pieces summarizing some of their views in the aforementioned New York Times recently that do as good a job of expressing the opinions of either side as I have ever seen. Krugman's may be found here, while Mankiw's can be found here. I would be interested to see what readers think of either or both in the comments section.