Tax anyone but the rich ...

I found this column really interesting. I don't know what Adam Davidson's politics are, and maybe they shouldn't matter for an economic analysis (although they often do seem to matter.) But Davidson repeats the annoying Republican/conservative straw man argument that taxing the rich at one hundred percent would not raise enough money to close the deficit (over what period of time? One year? Ten years? They never say.) Davidson also argues, somewhat more convincingly, that corporate taxes are too high, although he goes on to say that indeed many big corporations pay zero taxes with loopholes, and essentially says that there is no way to remove those loopholes. Davidson finishes by asserting that taxes on the middle class most be dramatically raised to close the deficit.

Look, my personal opinion is that taxing anyone's income over 50% is too onerous, and currently I want to see the top tax bracket at 40%, no more but no less. Do I think that will close the deficit? No, almost certainly not. But I think that it would a good symbol, the rich setting aside greed for patriotism. Meanwhile, I think for at least a year no other personal income taxes should be raised. After all, part of the problem with the economy is a lack of demand for goods and services.

I am not sure about corporate taxes, lowering them and removing various loopholes seems like a good idea. But a lot of tax loopholes have some logic behind them. The problem is I have little faith Congress is currently capable of make smart, good choices about removing some, but not all, corporate tax loopholes. As galling as it is, it strikes me that big corporations will still pay zero corporate taxes for some time to come.

As I understand it, our economic situation has not really changed since January 2009. Apparently US treasury bonds are selling briskly, even though the effective interest rate is negative (we are sort of making money of selling bonds.) Because of that, there could be another, larger stimulus to jump start the economy. After the economy recovers, we can have a national debate about the debt. Now, it is reasonable to say the the debt and deficit are larger physically than they ever have been before, so they should be addressed sometime (and by the way, big parts of the deficit right now is unemployment benefits and reduced tax revenues cause by the high unemployment rate.) But again raising taxes on the middle class and/or the poor will hurt that demand thing, and possibly push us into a double dip recession. And the deficit/debt are not an excuse to act as though teachers, police or whole government departments are somehow leaches on society. If you want to say the poor need some "skin" in the game (because social security, Medicare, state and local taxes don't count,) then I want to talk about whether the rich are patriotic or just greedy.

In any event, I think that this Sunday NY Times article is nothing more than a restatement of Republican talking points disguised as "thoughtful" commentary, and a major disservice to the Times' readers.