March 17, 2013


It's Lose-Lose vs. Win-Win-Win-Win-Win (THOMAS L. FRIEDMAN, 3/17/13, NY Times)

Writing in this newspaper in support of a carbon tax back in 2007, N. Gregory Mankiw, the Harvard economist, who was a senior adviser to President George W. Bush and to Mitt Romney, argued that "the idea of using taxes to fix problems, rather than merely raise government revenue, has a long history. The British economist Arthur Pigou advocated such corrective taxes to deal with pollution in the early 20th century. In his honor, economics textbooks now call them 'Pigovian taxes.' Using a Pigovian tax to address global warming is also an old idea. It was proposed as far back as 1992 by Martin S. Feldstein on the editorial page of The Wall Street Journal. ... Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word 'tax' only if followed immediately by the word 'cut.' Democratic consultants recommend the word 'tax' be followed by 'on the rich.' "

Yes, to win passage of any carbon tax, Republicans would insist that it be revenue neutral -- to be offset entirely by cuts in corporate taxes and taxes on personal income. But maybe they could be persuaded otherwise. In an ideal world, you would have 45 percent go to pay down the deficit so that we don't have to cut entitlements as much -- appealing to liberals and greens -- and have 45 percent go to reducing corporate and income taxes -- to encourage work and investment and appeal to conservatives. The remaining 10 percent could be rebated to low-income households for whom such a tax would be a burden.

Just a thought here, maybe Mr. Friedman could explain why his refusal to reform entitlements in any fashion is more thoughtful than the conservative desire to make them more generous but also more cost-effective and why he'd retain corporate and income taxes that he concedes discourage work?  

Of course, since he's not a yucky conservative we know that his position can't just be reflexive, so why not articulate his thought processes for advocating positions he knows to be Lose-Lose?

Sen. Corker: Deal Is Possible on Taxes, Entitlements (WSJ, 3/17/13)

Sen. Bob Corker (R., Tenn.) said in an interview that for members of his party to accept a "grand bargain" on fiscal issues, Mr. Obama must embrace fundamental changes to Social Security and Medicare that would make the entitlement programs viable over the long term.

"We'd like to see these programs available for future generations," Mr. Corker said. "And, so, if the president is willing to sit down and look at structural reforms that will generate a 75-year soundness for these programs, I think that through tax reform, most Republicans would be willing to look at revenue."

The GOP is the pro-entitlements party.
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Posted by at March 17, 2013 5:56 AM

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