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THE investment debacle in Orange County, California, lingers, but all is not gloomy in the Golden State. Governor Pete Wilson’s huge economy-flattening tax increases of a few years ago may soon be reversed. A secret fiscal-policy task force chaired by George Bush’s chief economist, Michael Boskin, with members including Nobelist Gary Becker and Reagan advisors George Shultz, Martin Anderson, Annelise Anderson, and John Cogan, has recommended a three-year across-the-board 15 per cent in marginal tax-rate cuts for personal and business income.

Commissioned by Wilson a year ago, the group started the exercise by assuming a modest 5.9 per cent growth rate for nominal personal income during the next five years (lower than the 9 per cent rate forecast by UCLA). This yielded $37.4 billion in additional tax revenues during the period. Then the panel examined major spending commitments for education, Medicaid, debt service, and other discretionary items, and found sufficient resources to allow for 5 per cent yearly tax-cut installments beginning in October 1995.

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THE investment debacle in Orange County, California, lingers, but all is not gloomy in the Golden State. Governor Pete Wilson’s huge economy-flattening tax increases of a few years ago may soon be reversed. A secret fiscal-policy task force chaired by George Bush’s chief economist, Michael Boskin, with members including Nobelist Gary Becker and Reagan advisors George Shultz, Martin Anderson, Annelise Anderson, and John Cogan, has recommended a three-year across-the-board 15 per cent in marginal tax-rate cuts for personal and business income.

Commissioned by Wilson a year ago, the group started the exercise by assuming a modest 5.9 per cent growth rate for nominal personal income during the next five years (lower than the 9 per cent rate forecast by UCLA). This yielded $37.4 billion in additional tax revenues during the period. Then the panel examined major spending commitments for education, Medicaid, debt service, and other discretionary items, and found sufficient resources to allow for 5 per cent yearly tax-cut installments beginning in October 1995.