More taxes
Robert J Samuelson in the Washington Post:
The truth is that we can’t afford any tax reduction. We need higher,
not lower, taxes. What we should be debating is the nature of new taxes
(my choice: a carbon tax), how quickly (or slowly) they should be
introduced and how much prudent spending cuts could shrink the magnitude
of tax increases.
To put this slightly differently: Americans are under-taxed. We are
under-taxed not in some principled and philosophical sense that there is
an ideal level of taxation that we haven’t yet reached. We are
under-taxed in a pragmatic and expedient way. For half a century, we
haven’t covered our spending with revenue from taxes.
Of course, there are times when borrowing (that is, budget deficits) is
unavoidable and desirable. Wars. Economic downturns. National
emergencies. But our addiction to debt extends well beyond these
exceptions. We have run deficits with strong economies and weak, with
low inflation and high, and with favorable and unfavorable productivity
gains.
Since 1961 — and I admit to having reported this fact before — federal budgets have been in surplus in only five years.
And these surpluses have invariably coincided with long economic booms
that swelled government tax revenue: 1969, following the long boom of
the 1960s; and 1998 through 2001, reflecting the “tech boom” of the
1990s.
We resist the discipline of balancing the budget, which is inherently
unpopular. It’s what Eugene Steuerle of the Urban Institute calls
“take-away politics.” Some programs would be cut; some taxes would be
raised. Americans like big government. They just don’t like paying for
it.
Borrowing is easier. It’s largely invisible to most
Americans, creating the illusion of “something for nothing.” This
liberates Republicans to peddle more tax cuts. Their tax cut would add $1.5 trillion to the debt over 10 years. A more realistic figure is $2.1 trillion, claims the Committee for a Responsible Federal Budget.
Democrats are little better. They advocate more entitlement spending, despite CBO’s estimate of $10 trillion in deficits under existing policies over the next decade.
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