Alan Auerbach and Larry Kotlikoff are the academic source of the Ryan/Brady tax bill (“The Better Way”) and they have recently completed an analysis of the plan for the Goodman Institute, using very high level, first-of-their-kind computer models. (Each estimate requires several computers running for 14 hours.) The surprising results were reported last Friday in the Wall Street Journal by Kotlikoff:
- There is no give-a-way to the rich: the plan is “almost as fair” as the current system.
- There are no huge deficits: in fact, the plan gains revenue for the government.
- There is a boost in wages: about $4,000 in additional take-home pay every year for the average household.