The other side of the counterfeit coin.
Scott Lemieux makes an interesting point about the supply-side hack theory of tax cuts bringing higher tax revenue by increasing the tax base (yes, the same theory that produces things like this): it simultaneously denies the idea that greater government spending can also raise federal revenue by increasing the tax base!
Granted, there is some veiled logic to the Republican position here, at least on the spending side. As everyone knows, republicans actually love spending, just not on the poor. But the US has low consumption taxes (and most apply at the state and local level) and the poor face the lowest marginal income tax rates. So if your typical bottom-quintile family saves $5000 a year on health insurance through a new public health care plan, a relatively small percentage of that savings is going to end up back in the federal coffers. By contrast, giant transfers to relatively high-wage defense contractors result in lots of new income and corporate tax revenue, at least if production is carried out at home and the company can't totally shelter its profits.
One could argue, then, if one wanted, that the GOP version of tax-cut-and-spend is less budget-busting than the (mostly non-existent) "liberal" version of tax-cut-and-spend. Though of course it's all of pretty moot importance from a budget-balancing perspective (and at least comparable from an equity perspective, but I digress) compared to reinstating a 40% top rate and treating investment income on a par with wage income. And on that point that hacks remain firm and the GOP firmly in thrall to the hacks.
Granted, there is some veiled logic to the Republican position here, at least on the spending side. As everyone knows, republicans actually love spending, just not on the poor. But the US has low consumption taxes (and most apply at the state and local level) and the poor face the lowest marginal income tax rates. So if your typical bottom-quintile family saves $5000 a year on health insurance through a new public health care plan, a relatively small percentage of that savings is going to end up back in the federal coffers. By contrast, giant transfers to relatively high-wage defense contractors result in lots of new income and corporate tax revenue, at least if production is carried out at home and the company can't totally shelter its profits.
One could argue, then, if one wanted, that the GOP version of tax-cut-and-spend is less budget-busting than the (mostly non-existent) "liberal" version of tax-cut-and-spend. Though of course it's all of pretty moot importance from a budget-balancing perspective (and at least comparable from an equity perspective, but I digress) compared to reinstating a 40% top rate and treating investment income on a par with wage income. And on that point that hacks remain firm and the GOP firmly in thrall to the hacks.
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