Personally, I would prefer a tax on gasoline.
Probably a larger deficit until unemployment drops.
I suppose I'd prefer higher taxes, though mainly because I think raising taxes is always going to be politically challenging but new revenue will obviously be necessary to deal with a lot of things our country needs to tackle in the next few daces (deficit reduction, subsidizing health care for retiring boomers and low-income folks, cushioning the fall for those affected by labor market dislocation, etc.).Locking in some amount of higher revenue would be a good start on those things. I'm worried that if some of those budgetary needs approach without us having higher revenues in place then the political wrangling and deadlock might cause some real problems.
If we're holding spending the same, how does the deficit go up in the keep-taxes-the-same scenario?Anyway, higher deficits until the economy recovers.
I suppose by "a larger deficit" he means a deficit larger than it would be if taxes were raised.Anyway, I would vote for higher taxes only if they were scheduled to take effect after a specified time has passed or after unemployment has dipped below a specified level.
Right now, a larger deficit--the economy still needs the stimulus. Longer-term, as the economy recovers, higher taxes (raised in a way that would be progressive, rather than neutral or regressive).
Taxes where they are until seasonally adjusted unemployment drops to 5.5%. Then raise taxes in a progressive direction.
High taxes on the extremely rich are an end unto themselves. The fact that they also generate revenue that can be used for the common good is just a nice bonus.
Eliminate the capital gains carried interest loophole, and change the income tax rate on American corporations to a flat rate, say 15%. Foreign-based companies doing business in America should pay at least 25% on US-based income. The Buffett rule would be okay, too.A more progressive tax code shifts the burden from the middle class to those who benefit the most from the system running smoothly.
I have lots of ideas about taxes and how they can be used to reduce inequality. But right now there should be no new taxes. The country has one overriding problem: unemployment. We should do what we must to reduce that. New taxes are counterproductive.After unemployment is under control: not only raise the estate tax, make it much harder to get around. Add several new marginal income tax rates. Raise or even eliminate the payroll tax cap.That's a start.
I believe you're incorrect, Frank. Clinton raised wealth taxes in his first six months, and that helped to fuel a huge bubble of research and investment. People don't like to risk their money. However, when presented with the choice of risking their money versus paying it in taxes, they will take the risk every time. Taxes are considered a dead loss, so even a small possibility of a payout is preferable.Wealth taxes are the key to getting the economy moving again.
"Bubble" is the optimal word there. But I have no problem with a wealth tax after unemployment goes down.
The trick is to structure the new wealth tax so that active investment in the US economy, especially investment that creates jobs, allows the wealthy individual to avoid paying the new taxes. The economy is stagnant because wealthy individuals and corporations are sitting on big piles of money. It's great for them, but it doesn't serve the larger good and it doesn't build a middle class.I think you expect that the economy will heal on its own. I don't think that it will. Negative incentives, i.e. taxes, have historically worked quite well to drive high-risk, high-reward investments. The last five years have shown that without negative incentives, there's too much risk for most individuals to stomach.
No new taxes until unemployment drops, then maybe $30/ton carbon tax with rebates to lower income families. Eliminate fax preferences for capital gains and dividends, employer-paid health insurance, and home mortgage interest. The last one could be phased in over 10 years to allow time for people to adjust.
"Since I think I'm writing about this soon: holding spending the same, which do you prefer: higher taxes (written, let's say, by liberals, so making taxes more progressive) or taxes where they are and a larger deficit? "Right now the biggest economic problem is lack of jobs and weak growth not deficits and debt so I would take the larger deficits over higher taxes. I'm not sure why I am required to hold spending the same though in your scenario other than surrendering to the House GOP agenda. At a minimum spending can go up at the same rate as the economy and population growth. Certain types of spending (the usual suspects infrastructure etc.) I'd like to see go up even more than that while others (occupying Asian countries, the War on Drugs, etc.) could go down.
Note: Only a member of this blog may post a comment.
At The Washington Post
At The American Prospect