Republican Bruce Bartlett: We must raise taxes
Bruce Bartlett says it's unrealistic and risky to rule out tax increases. From Ezra Klein's Q&A:
An Interview with Bruce BartlettBruce Bartlett's conservative credentials are impeccable: He's worked for Ronald Reagan and George H.W. Bush, Jude Wanniski and Gary Bauer, Ron Paul and Jack Kemp. But he's also an economic realist: Government spending is growing, he says, and taxes are going to have to grow with it. The question for his party is whether it wants to get to work crafting those tax increases in a responsible way, or whether it wants to let Democrats levy inefficient hits on the rich and strange changes to the tax code. The health-care debate is a perfect example: A VAT could pay for this efficiently. But without Republican support, a surtax on the rich is likely to pay for this inefficiently. We spoke yesterday.
EK: Start at the beginning. Why do we even need taxes? Why pay for anything?
BB: We have a stream of revenue we'll continue to get in the future from the policies in place. But spending is projected to rise much more rapidly. So the question becomes what is the politically and economically tolerable level of the deficit? The Republican position seems to be, as Dick Cheney once said, that "deficits don't matter."
I don't know when we reach that threshold. But I think we were getting close even before the current problems. And federal spending is supposed to rise by about 50 percent over the next 25 years or so, and that was before any of the recent events. I think long before we'd reach the year 2030 we'd have a deficit large enough to create massive economic and political problems. Since the deficit has gotten so much larger so much faster, we're starting to see those problems on the horizon: Weakness of the dollar, increased efforts of foreign countries to diversify, unwillingness of other countries to hold the dollar. Eventually, we'll have a lot more trouble selling our bonds because our foreigners won't want them any longer.
Tyler Cowen says Bartlett is "courageous."
Comments
Paraphrased from his 1995 platform speech: The question for the party is whether it wants to get to work crafting those health care plans in a responsible way, or whether it wants to let Democrats levy inefficient hits on the rich and strange changes to the tax code to pay for them.
courage: a quality of spirit that enables you to face danger or pain without showing fear
sophism: a deliberately invalid argument displaying ingenuity in reasoning in the hope of deceiving someone
Posted by: MrRational | July 17, 2009 2:16 PM
Why is there only one choice (to raise taxes)? Any rational person looking at a shortfall in his budget would consider the income and expense sides of the ledger. What Bartlett says is rather juvenile, like a teenager who dictates to her parents, "I have to go to this movie tonight!" Where are the leaders who can hold a partisan, but intelligent debate on the national budget? What Bartlett says may get him into the headlines but it does nothing to address the fundamental flaws in US fiscal policy.
Posted by: Dan | July 17, 2009 2:35 PM
Why only one choice, Dan? Because the other choice (to cut spending), which is usually the only choice of some antigovernment enthusiasts, has been, since the Reagan era, applied with such zeal that our society's physical and social infrastructures are now in advanced stages of decay. Roads, bridges, tunnels, fresh water and sewer mains, electric grids, and municipal buildings are crumbling. Teachers, nurses, doctors, and policemen are underpaid, undertrained and unprepared, and in short supply while our prisons, even as we build more, are overburdened and dangerous. Our military is so understaffed for the demands it must meet, that we keep sending the same soldiers off to fight again and again and again. Vital governmental institutions that serve the needs--not the wants--of our society are being strangled for lack of funding. As Oliver Wendell Holmes said, "Taxes are the price we pay for a civilized society."
Posted by: Gene | July 17, 2009 4:18 PM
Spending cuts are not the reason why we have some failing infrastructure. A lack of taxes is not it either.
There are many countries that have tremendous tax rates, far higher than our own, yet suffer from debt and poor infrastructure. Look at communism. You could consider their form of govt. the ultimate tax - a life tax if you will. Yet their infrastructure proved no better for being able to dictate the populace's wages and means of earnings.
Make no mistake it is government run amok that creates these problems. The amount of money that is spent blowing things up in foreign countries and then trying to fix them again is staggering.
That money alone could fix every bridge, pothole and old sewer line in the country and leave a lot left over.
With that said you will still get your wish of higher taxes. Cap and trade will create a non-direct tax hike unparalleled in our nation. While diverting more funds to financial manipulators through new derivatives and derivative programs.
Smaller and more efficient govt is the and only answer. If we don't go there soon than be ready to whip out your best red suit comrade.
Posted by: BRIAN | July 20, 2009 12:01 AM