Since the retirement of the great Bill Moyers from PBS earlier this year, I have been leaning increasingly on Fareed Zakaria, the smart, savvy, right-of-center editor of Newsweek International and host of CNN’s GPS. If you haven’t watched him, you will struggle to find someone more intelligently conversant on the issues of the day, especially foreign affairs (you can subscribe for free in iTunes here). He also brings on heads of state and the best minds on a given field or on a particular issue.
Anyway, I’d just like to give you some of the great lines from his most recent Newsweek column entitled “Raise My Taxes, Mr. President!” I would like to echo that sentiment, though choosing to let the Bush tax cuts expire wouldn’t affect Amy and I at our income level, I would not mind if they did. Just let think facs and statements marinate for a while in your mind:
Of these the tax cuts were by far the largest, adding up to $2.3 trillion over 10 years. According to the Congressional Budget Office, nearly half the cost of all legislation enacted from 2001 to 2007 can be attributed to the tax cuts.
In fact, federal taxes as a percentage of the economy are at their lowest level since the presidency of Harry Truman.
We have one of the smallest governments among all the rich countries in the world.
Better yet, spend money on far more efficient ways to spur job creation, such as tax credits for jobs, which the CBO estimates would create four to six times as many jobs as would tax cuts.
I don’t like our current tax system. It’s unwieldy, taxes the wrong things (income instead of consumption), and is filled with loopholes that are legalized corruption. But we are not going to create the perfect tax code today. We have in front of us a simple, easy way to bring America’s fiscal house in order, reduce our dependence on foreign borrowing, restore U.S. credibility and power, and give us a stable revenue base from which to make key investments for future growth. All we need is for Congress to do what it does so well—nothing.
I admire Fareed Zakaria very much — he and David Brooks are my two favorite pundits. I was sad when he left the show Foreign Exchange, but he deserved to be more than a glorified news anchor. I used to subscribe to Newsweek because it was practically free and pretty much the only thing that could get me to crack open an issue was a cover story by Zakaria. Tax credits for job creation is a great idea; trickle-down economics is too imprecise, particularly in an economic climate in which it is feared that much of our traditional industry has gone away and is not coming back. We need direct incentives to create new domestic industries rather than giving the richest more money and trusting they won't just invest it overseas.
I've a few bones to pick:
Paragraph 1: So basically you're saying that congress spent an additional 1.15 trillion dollars between 2001-2007, above and beyond our current obligations. How does that give me confidence that tax money is well spent?
Paragraph 2: I'm not willing to return to cold-war era tax levels. It makes sense to spend money when you are in a life and death struggle with another world power. It does not make sense now.
Paragraph 3: "We have one of the smallest governments among all the rich countries of the world." And why should we make it bigger? Does the rest of the world have something we don't? I contend that we have something they do not: Google, Facebook, Apple, Microsoft. To name a few.
Paragraph 4: The U.S. needs incentives for innovation and financial sensibility, not subsidized employment. What happens when the subsidies stop? (Albeit tax credits are a better idea than blanket federal spending).
Paragraph 5: I agree with the statements about the complicated tax-code. I do not want to give money into the hands of those who created it.
Hi Peter, I didn't recognize your email address, are you a Peter I know or a new visitor? Either way: welcome.
#1 I don't think we're reading the same passage, or perhaps I'm not understanding your point. Paragraph #1 says that more than half of the cost of all legislation passed from 2001-2007 came from the Bush tax cuts alone. President Bush also added two wars and the prescription drug benefit to the country's credit card during those years too. I too have concerns about all of the mechanisms in our legislative branch, but you can't say because a congress and senate spend recklessly nine years ago the Congress and Senate today are going to do the same.
#2 Do you make more than $250,000? Because if not your tax rates aren't going up if the Bush tax cuts expire: you will continue to enjoy the lowest federal taxes in almost 60 years. And if we are going to balance our deficits at this point we have to cut spending AND raise taxes, you can't do it without both.
#3 The size of government is a balancing act and a compromise, but I would argue that, yes, other governments do have something to offer us: moral, universal health care; appropriate military spending; a reasonable social safety net. We do have a market economy that in many ways is the envy of the world, and I don't think we have to scrap that to provide a better education for our children and safety net for our fellow citizens.
#4 Subsidies are to allow workers to maintain their skills and contact with the market. Much of the long term unemployment in Europe snowballed because of the length of time workers were away from active involvement in the market. I do agree that we need more incentives for innovation, especially in the areas of clean energy and broadband internet. I'd heartily support new stimulus spending to puts thousands of people to work building windmills, solar panels, even nuclear power, and, even more importantly, the next generation power transmission system. Much of the last stimulus bill simply shored up failing budgets, not creating or extending new opportunity.
#5 Amen. So many loops holes, mainly exploited by the wealthy and connected. A simple, progressive tax system, or, even better, something like a VAT tax to tax consumption rather than income. We spend billions each year on our complicated tax code.
Thanks Peter, old friend or new friend. Hope to hear from you soon!