Onwards to 70%!

Unless I’m misinterpreting him, that’s the message of John Judis’s article in The New Republic, “Obama’s Tax Hikes Won’t Be Nearly Big Enough”:

It’s quite possible, as the United States demonstrated in the late 1990s, for government to provide these services and balance the federal budget. But to fund these programs, governments will have to extract a share of income from those who are able to afford them and use the revenues to make the services available for everyone. As it stands now, we have a top-heavy distribution of income that our tax code accommodates and reinforces rather than attempts to correct.

The alternative to paying for the rising costs of these services is not to provide the services, or to provide a drastically inferior version of them for the vulnerable–run-down clinics without x-ray machines or doctors, schools staffed by listless teachers who are barely literate, pensions that plunge the aged into poverty. The Republicans and conservatives who talk about shrinking government don’t say this would be the outcome – instead they crow about computers in inner city schools – but it’s exactly what would happen if they get their way.

Are those really the only two alternatives? To extract more from the private sector than we’ve ever been successful in doing before so that the federal government can spend a higher proportion of GDP than it has before?

Let’s make a preliminary list of the problems with his claim:

  • Isn’t it just barely possible that physicians and teachers have incomes that are already high enough relative to the communities they serve?
  • Why aren’t we producing more doctors?
  • I note that he presumes that that there are no listless or barely literate teachers already. I wonder if he’s set foot in a Chicago school over the period of the last couple of decades. Or a California one when they learned a few years back that some of their teachers were, in fact, illiterate.
  • Do more X-ray machines really translate into better healthcare?
  • What’s wrong with nurse practitioners?
  • Does any form of means-testing of Social Security “plunge the aged into poverty”?
  • How does using chained CPI “plunge the aged into poverty”?
  • Isn’t what is much more likely to “plunge the aged into poverty” high healthcare costs?

Finally, why will higher nominal marginal rates lead to higher effective rates? Our top marginal rate is half what it was in 1960 but our effective rate is just a point or two lower. No Tax Attorney Left Behind.

If you really, sincerely believe that every dollar of federal spending other than the elusive waste, fraud, and abuse is absolutely necessary, isn’t the only way to extract enough money from the economy to broaden the base of taxpayers on whom higher taxes are levied into the fourth and fifth quintiles (people earning more than $50,000)?

20 comments… add one

  • PD Shaw

    I find myself completely confused by the stagnant versus productive sectors of goods and services. It appears to be a ruse to conceal a distinction he sees between government and non-government services. Implicitly he is saying government services are inherently inefficient and therefore their cost will always be higher (than what, I wonder?)

    So, teachers cannot produce teach more students, but why should they receive a 25% raise over three years? Can they not be evaluated for quality of teaching? Can their raises be more modest?

    My big issue with government is that it doesn’t understand labor costs and makes grand, inefficient gestures. The way around this for the last ten years are more has been to slowly reduce direct government employment (at least on a per capita basis) and rely more on outsourcing, which has its own problems and cannot continue.

  • michael reynolds

    We could try a death penalty for hyperbole. That might get things moving.

    Cutting Social Security at all plunges old people into poverty, and yet paying Social Security to people of private means never seems to elevate people into wealth. I don’t doubt there are people very close to the line who would indeed be plunged etc… but if that’s the case then isn’t the obvious answer to means-test?

  • We could try a death penalty for hyperbole. That might get things moving.

    I’m surprised you’d advocate this. :p

  • michael reynolds

    Steve V:

    I believe in the law that’s called a “suggestion against interest.”

  • Cutting Social Security at all plunges old people into poverty, and yet paying Social Security to people of private means never seems to elevate people into wealth. I don’t doubt there are people very close to the line who would indeed be plunged etc… but if that’s the case then isn’t the obvious answer to means-test?

    Wait what? Isn’t that what Dave is saying?

  • By the way, anyone ever consider the perverse incentives of means testing?

    No?

    Shocking.

  • jan

    A little more perspective, on our debt versus dependency problem, from this ZeroHedge analysis:

    Government dependents outnumber those in private sector jobs in 11 U.S. states

    This list of states includes some of the biggest states in the country: California, New York, Illinois, Ohio, Maine, Kentucky, South Carolina, Mississippi, Alabama, New Mexico and Hawaii. It is interesting to note that seven of those states were won by Barack Obama on election night. In California, there are 139 “takers” for every 100 private sector workers. That is crazy!

    Yes, we will always need a safety net. There are many people out there that simply cannot take care of themselves. We certainly don’t want to see anyone sleeping in the streets or starving to death.

    But if the number of people jumping on to the safety net continues to grow at the current pace, the net will break and it will not be available for any of us.

  • But if the number of people jumping on to the safety net continues to grow at the current pace, the net will break and it will not be available for any of us.

    To paraphrase James Carville (with a bit of Samuel L. Jackson), “Its the incentives, mother f*ckers.”

  • Drew

    jan

    The ideal “safety net” of a lefiy knows no bounds. Seen the recent spate of articles on how cell phones reduce crime. Hold on, government subsidized phones are just around the corner.

    PS Judis article was standard issue tripe.

  • jan

    Drew

    Agree with your statement about a ‘lefty knows no bounds to the size of a safety net.’ Also, haven’t seen the cell phone articles regarding their usefulness in reducing crime. However, considering how the govt. program, under Obama, did give one million cell phones to people in Ohio (which were probably useful in contacting them to get out and vote), I trust anything to happen under Obama to launch more programs and freebies in order to augment his kind of ideology.

    I keep imagining this kind of audacity, under the administration of anyone but a dem, and the howls of resentment that would come from a disjointed press and leftist constituency.

    BTW, how are you feeling?

  • jan

    Senator Ron Johnson is one Senator who spares no political correctness, in laying it on the line as to what he thinks about the Senate and it’s leaders: …”This place is a joke!” The only unfortunate part about this statement is that no one is laughing.

    “It’s an alternate universe. No, this — this place is a joke. I mean, bottom line, this is an absurd process,” Johnson said on CNBC. “It certainly proves the genius of our founding fathers that government should be limited. I mean, the fact that we have this place having such an enormous effect on our economy, on people’s livelihood, is wrong. It’s simply wrong.”

    Johnson also slammed the reign of Senate Majority Leader Harry Reid (D-Nev.) as “a one-man dictatorship.”
    “And under his leadership, the Senate has been a charade while I’ve been here for two years. I serve on the Budget Committee. You know how many times we’ve voted on a budget in the Budget Committee? Zero. We haven’t even marked one up,” he said.

    The senator also decried the shady negotiations. “We’re here at the end of the year, a couple of elected officials with their unelected staffs, are doing these deals behind closed doors,” he said. “I don’t know what’s happening behind there. Am I all of a sudden going to get a product sometime in the middle of the day and say, ‘you’ve got to vote on it right away’? I mean, that is an absurd process.”

    “We’ve turned the Senate from a legislating body into a deal-making body, and that’s just wrong.”

    In the meantime, idiots applaud the puppet master, Prez Obama, for raising taxes on the rich. Ah, what mindless drones people have become!

  • steve

    “The ideal “safety net” of a lefiy knows no bounds.”

    Not the ones I read. True for anonymous commenters.

    For anyone who wants to know more about Obamaphones.

    http://www.forbes.com/sites/kellyphillipserb/2012/09/28/crazy-for-obama-phones-but-are-they-for-real/

    Steve

  • jan

    Obamaphone was a slang term taken from that vocal video of the woman touting a free phone (from Obama) in Ohio. It was already addressed in various articles that while Obama didn’t start this federal program, in the last year plus the number of free phones doubled, which, probably made a lot of people happy for yet another freebie from Obama. The same has happened with food stamps, disability applications, welfare in general — all have dramatically increased under Obama.

    Subsidized cell phone program nearly doubles in Ohio.

    A program that provides subsidized phone service to low-income individuals has nearly doubled in size in Ohio in the past year — now covering more than a million people. At the same time, federal officials say they’re reining in waste, fraud and abuse in the program.

  • Andy
  • There’s a strain of political thought that is narrowly majoritarian. They think it’s the height of injustice that 50% + 1 of the voters can’t do anything they darned well please.

  • Andy

    I’m not sure he subscribes to that – it doesn’t sound that way from the OpEd, but then again it’s filled with contradictions, so who knows. I do wonder, though, if the editors Gray Lady broke into the New Year’s Eve booze a little early this year.

  • steve

    Remember what Jefferson said.

    “The question Whether one generation of men has a right to bind another, seems never to have been started either on this or our side of the water. Yet it is a question of such consequences as not only to merit decision, but place also, among the fundamental principles of every government. The course of reflection in which we are immersed here on the elementary principles of society has presented this question to my mind; and that no such obligation can be transmitted I think very capable of proof. I set out on this ground which I suppose to be self evident, “that the earth belongs in usufruct to the living;” that the dead have neither powers nor rights over it. …..

    On similar ground it may be proved that no society can make a perpetual constitution, or even a perpetual law. The earth belongs always to the living generation. They may manage it then, and what proceeds from it, as they please, during their usufruct. They are masters too of their own persons, and consequently may govern them as they please. But persons and property make the sum of the objects of government. The constitution and the laws of their predecessors extinguished them, in their natural course, with those whose will gave them being. This could preserve that being till it ceased to be itself, and no longer. Every constitution, then, and every law, naturally expires at the end of 19. years. If it be enforced longer, it is an act of force and not of right.”

    I think that there is a legitimate school of thought that suggests the inability to amend the Constitution (most amendments came in two groups in special circumstances) requires the judiciary to make extraordinary work arounds to fit the evolving needs of a country much different than it was in the 1700s.

    Steve

  • sam

    @Drew

    Still on Vic, I see.

  • I think that there is a legitimate school of thought that suggests the inability to amend the Constitution (most amendments came in two groups in special circumstances) requires the judiciary to make extraordinary work arounds to fit the evolving needs of a country much different than it was in the 1700s.

    There’s no inability to amend the Constitution. There’s an unwillingness. A serious difference of opinion.

    Equating “not being able to get enough votes” with “inability to amend” is just petulance over not getting your way. Unlike France or the EU our system is a common law system. Unlike the EU constitution our Constitution is mostly not law but metalaw. It shouldn’t need to be changed very often and when it does it’s important that the rights and opinions of minorities, particularly sizeable minorities, are taken into account.

  • I think that there is a legitimate school of thought that suggests the inability to amend the Constitution (most amendments came in two groups in special circumstances) requires the judiciary to make extraordinary work arounds to fit the evolving needs of a country much different than it was in the 1700s.

    I think Dave has covered this nicely in that there is a way to amend the Constitution, but that there is a lack of willpower to do so. I’s also add to his comments that not having a constitution means you are going to go with majoritarian rule. While that might not sound bad at first consider the following:

    1. The limits on the growth of government power are tremendously reduced. Maybe not a bad thing when “your guy” is in the big chair, but when the “other guy” is in there you will squeal like a pig that just got donkey punched.

    2. Policy may become very unstable in that as parties trade off who is in control they might simply start undoing what the other party did while in power.

    3. What role does the Supreme Court play now that it is no longer constrained by the Constitution?

    Basically, you are saying the rules don’t matter anymore. We’ll change them to suit our needs. Policy uncertainty might be an issue now, “get rid of the Constitution” and it might very well become the issue that is constraining growth.

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