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)?