December 23, 2014

Magical Thinking on Taxes

  • The federal budget is an expression of our country's values. Where we choose to spend and at what levels, how and who we tax, and the borrowing we...

Broad tax reform could simplify the tax code, boost the country’s economy and help reduce deficits all at the same time. Yet many elected officials in both parties cling to positions that could get in the way of such reform.

Some Republicans insist that tax revenue should not climb above 18 percent or 19 percent of the economy, the average over the last 40 years. But this ignores the fact that the aging population and spiraling health care costs are dramatically increasing public demands on the federal budget.

President Obama, meanwhile, has led Democrats in resisting the idea of tax increases on middle class households -- despite the fact that even large tax increases on just the wealthy cannot close the huge projected deficits.

In holding to these positions, Democrats and Republicans are both working against some of their own policy goals.