Yes, I've read them.
Still pretty much 'inside the Beltway' stuff, as no proposals are yet before Congress, and everyone is trying to influence the Administration's ideas before they are presented in the SOU address.
The WSJ's editorial this past week with their argument that "the poor aren't paying enough in income taxes" certainly signaled that the internal debate is at high boil now.
L. Linsey's argument (quoted in the NYT piece today) that "Social Security taxes aren't real taxes... so they shouldn't be counted when we look at relative tax burdens between the classes" is, well... "innovative" I guess is the word I'm looking for, but I doubt it will fly.
If F.I.C.A. (12.4% out of the average worker's paycheck, a larger bite to most Americans than income or sales taxes) isn't a *REAL* tax (because, as Linsey says: "the money is returned to the worker in retirement") then I guess the very RICHEST Americans wouldn't mind having the cap removed off of F.I.C.A. taxes, and paying at the same rate as everyone else, and taking their chances along with everyone else on getting 'repaid'.
(Yeah, right, THAT'S sure to happen!)
(E.J. Dionne, Jr. quoted some statistics from Richard Sims, policy director of the Institute on Taxation and Economic Policy, in his recent WashPost article "Low-Income Taxpayers: New Meat for the Right". Mr. Sims took the recently published example of a top CEO who earned $122.5 million in 2000, and calculated that his FICA tax rate was 0.00043 percent.)
My guess is that realists are being heard within the Administration... and a very bitter debate is ongoing.
1). The realists are aware that long-term growth rates (over the next 10 years or so) are going to be a lot closer to the historical averages... then to the go-go growth rates of the '90s.
2). And, without such go-go-like growth rates we are unable to staunch the emergence of a truly massive debt problem - leading ultimately to a steady, and major, decline in the dollar... and a sapping of growth rates as capital gets sucked out of the commercial markets (the federal debt "crowding out effect"), and imported inflation, as cheapened dollars buy less. The twin effects (federal debt crowding out commercial debt, and the need to fight inflation) would jointly reinforce a high interest rate policy... which would sap growth, and depress the economy (as in Japan now) below it's natural growth rate.
3) So, since for whatever reasons, the Administration seems unable:
a) to cut back on spending (so far, they are tied with the other 'Texas President', LBJ, as the most profligate spenders ever),
b) unwilling to compromise on the least economically productive of their tax cuts (the Estate Tax giveaway),
c) unwilling to consider real, substantial, comprehensive reform of the total tax code (likely because: if they eliminate all those special tax preferences and loopholes that clog up the tax code, they will face a revolt by the beneficiaries of those loopholes... who finance political campaigns),
d) and yet are becoming aware of the looming - and immense - deficits that await us... and the harm they will do.
They seem to be casting about for some 'cow' to milk... and it has to be a REALLY BIG cow indeed to help out fiscally.
I doubt the 'Poor' are going to be able to provide enough milk... no matter how often they are taken to the milking shed, but the 'middle class' may be a big enough beast of burden.
Only question seems to be: how long will they put up with it (in the name of patriotism and the new Forever War, and freedom for tax shirkers to escape to the Bahamas, and... well... in the name of *something*).
Think the 'middle class' is ready for a good long, two-a-day, milking? |
