Friday, February 27, 2009

Too narrow a tax base?

After praising Obama's willingness to tackle health care reform, impose a cap-and-trade program on carbon emissions, and do away with accounting gimmicks like placing war spending off-budget, Clive Crook offers a major caveat about the Obama budget:
In this "new era of responsibility", as the budget document is called, it would have been better for Obama to signal that huge and desirable initiatives like universal health care will impose at least some costs on all Americans. It is literally impossible to make the rich pay for everything, and telling 95% of voters that they can have all these things at no cost is not good leadership. It has even less to do with shared responsibility.
True, that. My chief worry about the governing compact Obama forged during the campaign is his promise not to raise taxes on any household with less than $250k in income. Obama's core domestic policy premises were that the U.S. needs to repair its safety net, reduce income inequality and improve opportunity through education. That means higher taxes for the affluent and some tradeoff of tax and benefit for the middle class, if lower tax burdens for the poor. I fear that on this point David Brooks was right: Obama boxed himself in on taxation during the campaign.

1 comment:

  1. I thought Obama was talking about not raising the marginal tax rates for anyone except the top income tax bracket. I didn't see it as not raising taxes elsewhere that affect everyone. Most taxes would apply to people as a whole. Cigarette tax, gas tax, cap and trade... And Obama has always seemed in favor of these targeted taxes that also positively affect behavior (like how he didn't cave in to that gas tax holiday BS).

    On health care, would it really cost everyone more? Because I don't see it that way. It would mean for a lot of people just a shift in how they pay for health care. They are already paying for even if their employer is "paying" for it, and the idea that people would now be paying more would just be a faulty perception.

    Then there's indirect costs that raise insurance costs like administration overhead, ER visits from the uninsured, and the medical bankruptcy epidemic...