Friday, November 12, 2010

Disband the Deficit Commission

Building on Citizen k's post about the tax reform proposals I referenced below, Krugman sees its value differently:

Matters become clearer once you reach the section on tax reform. The goals of reform, as Mr. Bowles and Mr. Simpson see them, are presented in the form of seven bullet points. “Lower Rates” is the first point; “Reduce the Deficit” is the seventh.

So how, exactly, did a deficit-cutting commission become a commission whose first priority is cutting tax rates, with deficit reduction literally at the bottom of the list? [...]

Actually, though, what the co-chairmen are proposing is a mixture of tax cuts and tax increases — tax cuts for the wealthy, tax increases for the middle class. They suggest eliminating tax breaks that, whatever you think of them, matter a lot to middle-class Americans — the deductibility of health benefits and mortgage interest — and using much of the revenue gained thereby, not to reduce the deficit, but to allow sharp reductions in both the top marginal tax rate and in the corporate tax rate.
The one point everyone seems to agree on is that they didn't address health care costs, but from the vague mention that Krugman highlights, it sure sounds like a prelude to cutting Medicare coverage to me. Krugman says they should cut their losses and disband the commission. I have to agree.

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