EJ Dionne: Deficit Dodge Ball: Will Anyone Admit That Taxes Have to Rise?

[steven johnson]

The necessity of increasing revenues over the next 20 years is the 800 pound gorilla in room. Every administration for the past 20 years has used dubious accounting and unrealistically optimistic economic effects on tax revenues to balance the budget in the future. The future is here. Now what are we going to do?

Thursday, March 26, 2009; Page A21

The debate on the budget is phony, the howling on deficits a charade. Few politicians want to acknowledge that if you really are concerned about long-term deficits, you have to support tax increases.

That's why the most significant moment of President Obama's news conference on Tuesday was not his dodge of a question on AIG but his defense of the least popular tax increase in his budget: limits on the benefits wealthier taxpayers get for their charitable contributions and mortgage payments.

The larger problem is the emptiness of all the howling over the long-term deficits. Nibbling away at bits of Obama's proposed budget will do very little about them. Talk of "entitlement reform" is empty unless we have health-care reform -- and unless we acknowledge that we will never cut Medicare and Social Security enough to close the budget gap. In fact, Social Security is more important than ever, now that the value of so many 401(k)s has plummeted.

The task of those who genuinely care about deficits is to make the world safe for tax increases. Under current conditions, it's a whole lot easier for politicians to talk a lot about deficits, and then just let them grow.

Deficit Dodge Ball

[n2doc]

1. Yep, always everyone talking about reducing taxes, but

then when the deficits rise "oh, noes, we can't raise taxes!" Sorry, there is a point, long since reached, where taxes have to go back up. Probably above Clinton's level since the debt has grown so big and we have pressing needs to pay for-Health Care.

And the place to find the money is on the top 10%, always has been, always will be.

[Juche]

2. Obama has called for trillions in tax hikes over the next decade

His cap/trade policy and his attempts to change the tax code on the well off will raise about $1 trillion in a decade. Letting the bush tax cuts expire will probably raise $2 trillion in a decade. He cut $2 trillion in spending from the government over a decade (much of it in corporate welfare and subsidies to the well off). He is looking at a 2-4% tax on people making over 250k a year to help fund social security. So off the bat Obama is raising revenue and/or cutting spending by $5 trillion over a decade.

Obama has called for trillions in higher taxes (mostly on corporations and the wealthy) and trillions less in subsidies and tax cuts for them.

[Demeter]

3. Well, EJ, You're One!

Gotta start somewhere....