I just read this post over on Brad’s blog and had to share it here, even though I’ve already posted today on how Warren Buffett feels many of us can afford to pay higher taxes (some like him, more than others), and of course, I’ve posted many, many times on my blog about how we need to raise taxes (in a thoughtful way) as a matter of simple logic and basic math.
By the way, by “raising taxes” Brad surely means (as I always do) raising tax revenues, not necessarily raising tax rates–just to respond to one of the comments on Brad’s site. Here’s how Brad explains it (so well):
I believe that when we Americans look deep into ourselves and ask us what we want our government–because it is our government: it is our agent to do what we want with our money just as the guy in Florida we hire to keep grandma’s one bedroom condo in repair is our agent–to do, we conclude the following:
- We want to let the Bush tax cuts expire.
- We want to close the 75-year Social Security gap, half by raising the limit on earnings taxed by Social Security so that the upper middle class and the rich pay more for Social Security and half by reducing the rate of growth of benefits at retirement.
- We want to stop sending our soldiers–the best-trained and best-equipped high tech armed forces in the world–abroad to be military police in countries riven by sectarian conflict where they do not speak the language–and so return defense spending to its late-1990s share of GDP.
- We want to reduce but not eliminate the “excess” cost growth in Medicare and Medicaid: we believe our doctors, nurses, and druggists will learn how to do wonderful things over the next two generations, and we do not want those wonderful things in the way of medicine applied only to the rich but to the poor and old as well.
- Whether or not we decide to do (1) through (4) above, we want to raise taxes to cover whatever of the long-run fiscal gap remains, and so bring the federal budget back into balance over the long run.
Note that (5) is not optional. As the late Milton Friedman liked to put it: to spend is to tax. If the government buys things, it must get the money to buy them from somewhere. It can get the money from three places. It can tax. It can borrow–but then the borrowing has to be repaid with interest, and the more is borrowed the higher the interest and the worse the value the taxpayers ultimately get for their money when they are taxed to repay the borrowing. Or it can print the money and so inflate the currency–but that too is a tax, and an especially unfair, painful, and destructive one, as lots and lots of people victimized by inflation find their wealth doesn’t buy what it used to and what they expected.
We can argue over whether (1) through (4) is what we want to do–that is what politics is about. But whatever we decide to do with (1) through (4), (5) is not optional–not, that is, if we want to continue to have a rich country in the long run. And the politicians who have told you that (5) is optional from Ronald Reagan to George H.W. Bush to Robert Dole to George W. Bush and now John McCain are not your friends, or America’s friends.