"Pay as YOU go, not as I go"
Interesting article here on the federal budget process, and fascinating passage:
With all these expenditures, many are saying they doubt Obama can reach his deficit goal while keeping his pledge to raise taxes only on couples making more than $250,000 a year."He's going to have to start moving down the scale and raising taxes on people making $150,000, people making $100,000 and even people making $75,000," said economist Adam Lerrick, a scholar at the conservative American Enterprise Institute. "You have to increase taxes. It's very simple. You have to pay for this somehow."
This is the first time in my adult life that I've heard a conservative expert say higher taxes are necessary to pay for deficit spending. Usually they insist that if we just lower taxes, we'll grow our way out of the deficit. That's been the mantra during the Cold War, War on Terror, Iraq, and the famous Bush tax program for the wealthy.
But I suspect the about-face has to do with the fact that now it's Obama who's doing the spending.
Having said all this, yes, I too am concerned about the Obama spending proposals. He needs to model the willingness to sacrifice pet programs that he demanded two nights ago.
I'm not sure how conservative the American Enterprise Institute really is, but nevertheless, conservtives have been saying just what Adam Lerrick says here for years. Now, you won't hear many fiscal conservatives urging anyone to raise taxes as a means of stimulating the economy, but reducing the federal deficit is another matter.
I happen to agree with Lerrick here. Increased taxes haven't always resulted in increased revenues, and there have been times when tax cuts have resulted in increased revenues. That said, what makes the present day so scary is that so many taxes will have to be raised in order to more than offset reduced consumer spending if we have any chance of eliminating the budget deficit. This problem, by the way, was created by too much spending and has nothing to do with "low" taxes and specifically tax breaks for the rich (the wealthiest 2% of Americans are paying something like 30% of the taxes, give or take).
Obama wants everyone to be fiscally prudent...except himself and the now Democratic Congress.
>>Now, you won't hear many fiscal conservatives urging anyone to raise taxes as a means of stimulating the economy, but reducing the federal deficit is another matter.
Point well taken on the former, but I still can't find any evidence of a conservative economist advocating the latter during the huge deficits of Reagan or W.
Can you?
You may be right about how higher taxes don't always create higher revenue, but the Bush I tax cuts, which alienated the conservative base, did bring in enough new revenue to allow a Democrat to finally balance the budget.
Finally, it's been demonstrated that a tax cut of $1 billion will only generate $500m in new revenue. The other $500m never comes in, John.
I don't *readily* know of any conservative economist advocating tax hikes as a means to reduce the federal budget deficit, but I clearly recall having multiple conversations along these lines way back when I was in graduate school with people clearly more conservative than myself. Don't count on me to do any research here.
I am right about taxes versus revenues; I will do some research on this and provide at least one or two examples here or offline.
I don't know what you mean exactly by your last point - can you clarify?
By the way, when it comes to taxes, I want to say this - I am principally against higher taxes for philosphical reasons. I'm against them for economic reasons, too, but I'm primarily coming at this issue from a philosophical angle. Just fyi.