How Economists Rated Candidates’ Proposals

Members of the panel ranked each proposal as good debatable or bad.

End the “carried interest” tax break, which benefits hedge fund managers and private equity executives.

Proposed by Hillary Clinton, Bernie Sanders and Donald Trump

Economists' rating: GOOD

Agree, period.— Bill Nordhaus

This is one of the most egregious loopholes in the tax code.— Nancy L. Stokey

This would be a very good thing indeed. There is no economic logic for this tax break and it subsidizes a sector of the economy with dubious social value (and some of the highest earners in our society).— Daron Acemoğlu

Lower the corporate tax rate to 25 percent.

Proposed by Marco Rubio

Economists' rating: DEBATABLE

It is a good idea, but with one big caveat. U.S. corporate tax rates are among the highest in the world. U.S. companies are competitively disadvantaged as a result. That is why so many U.S. companies keep foreign earnings offshore and why so many are taking part in inversion acquisitions to become taxable elsewhere. The caveat is that if we lower the corporate tax rate, it is important to raise rates elsewhere to make the change revenue neutral. — Steve Kaplan

[This] should be part of a comprehensive tax reform plan, and is impossible to assess in isolation.— Larry Samuelson

Create a "National Infrastructure Bank" seeded with public money to help finance infrastructure projects.

Proposed by Bernie Sanders and Hillary Clinton

Economists' rating: DEBATABLE

The nation’s infrastructure is in a pitiful state, with negative consequences for US economic growth. Something needs to be done about it. I’m not sure whether this is the best proposal, but it’s probably better than nothing.— Daron Acemoglu

We definitely need more infrastructure investment — our public capital stock has eroded. I would need to know more about how projects would be chosen to decide whether this is a good idea.— Alan Auerbach

I’m in favor of more infrastructure but I think that the government can carry this out directly. I don’t think we need a special bank for the purpose.— Oliver Hart

Make tuition free at public colleges and universities.

Proposed by Bernie Sanders

Economists' rating: BAD

This proposal is too indiscriminate. Many students can afford to pay a considerable amount toward their higher education. It is wasteful to give them a free ride.— Eric Maskin

I favor making tuition free for low- and moderate-income students. But I don’t think it makes sense to subsidize high-income families for their children to attend college. — Hilary Hoynes

There are many who can and should pay for college.— Larry Samuelson

Make tuition free at community colleges for students who contribute earnings from working 10 hours a week.

Proposed by Hillary Clinton

Economists' rating: DEBATABLE

This proposal does a much better job than [free tuition for all] at targeting the students who need the tuition assistance.— Eric Maskin

We know that one of the biggest problems is completion — so I worry a little about conditioning this benefit on working.— Hilary Hoynes

Borrowing at a decent rate and paying it back through withholding would be better than forcing some students to take bad part-time jobs.— Pete Klenow

Impose a “speculator tax.” Stock trades will be taxed at 0.5 percent and bonds at 0.1 percent.

Proposed by Bernie Sanders

Economists' rating: DEBATABLE

I don’t know whether the exact numbers are right but I think that there are good reasons to throw a little sand into the gears of stock and bond trading.— Oliver Hart

Though a case can be made for a transactions tax, these rates are really high.— Richard Thaler

Raise the federal minimum wage to $15 an hour.

Proposed by Bernie Sanders

Economists' rating: BAD

Improve wage distribution, without much loss, if any, in average growth. — Darrell Duffie

Some increase in the minimum wage would be good. $15/hour may be too high.— David Cutler

I am concerned that such a high increase might lead to fewer jobs.— Oliver Hart

Trump's tax proposal: “If you are single and earn less than $25,000, or married and jointly earn less than $50,000, you will not owe any income tax. That removes nearly 75 million households -- over 50 percent -- from the income tax rolls.”

Proposed by Donald Trump

Economists' rating: DEBATABLE

This may be a pretty effective way to redistribute to the bottom half of the income distribution, assuming that it is done in a revenue neutral way by taxing the rich more.— Abhijit Banerjee

First and most importantly, it is highly unlikely to raise enough tax revenue to fund current (or even reduced) government spending. Second, it is not a good idea to create a culture where more than 1/2 the country does not pay taxes.— Steve Kaplan

Switch to the “Cruz Simple Flat Tax.” Everyone pays the same 10 percent tax rate. It retains some version of the earned income tax credit and deductions for lower-income families.

Proposed by Ted Cruz

Economists' rating: BAD

It’s a terrible idea, given the exploding inequality and the need to redistribute more. — Abhijit Banerjee

It is likely to be much less progressive than our current system.— Steve Kaplan

Expel immigrants who are in the U.S. illegally.

Proposed by Donald Trump

Economists' rating: BAD

Either impossible or just stupid or both.— Richard Thaler

First it is impractical: too costly, and their departure would hurt us as much as them.— Nancy L. Stokey

The cost of illegal immigration to citizens is overstated, and this would be costly to enforce. Taking into account the welfare of migrants, it looks even worse.— Pete Klenow

A very bad idea from the human or economic perspective.— José Scheinkman

Notes

Comments have been edited for space.