Thursday, 3 March 2011

Death or taxes

An editorial in The New York Times today makes what to me is the most salient point about the current fiscal problems states and the federal government find themselves caught in:
The federal deficit is too large for comfort, and most states are struggling to balance their books. Some of that is because of excessive spending, and much is because the recession has driven down tax revenues. But a substantial part was caused by deliberate decisions by state and federal lawmakers to drain government of resources by handing out huge tax cuts, mostly to the rich. As governments begin to stagger from the self-induced hemorrhaging, Republican politicians like [Speaker of the House John] Boehner and [Wisconsin governor Scott] Walker cry poverty and use it as an excuse to break unions and kill programs they never liked in flush years.
This is classic, Marxian class warfare - war waged by the rich on the poor, with no one crying foul until the poor start to fight back. But the tide of public opinion may be turning:
A New York Times/CBS News poll published on Tuesday showed that Americans oppose ending bargaining rights for public unions by a majority of nearly two to one. And the poll sharply refutes the post-Reagan Republican mantra that the public invariably abhors all tax increases. Nearly twice as many people said they would prefer a tax increase to cutting benefits of public employees or to cutting spending on roads.
I find it bizarre that not one American political commentator I have heard on the radio, seen on TV or read online or in the papers has suggested raising taxes as a means of cutting the deficit. I mean, shouldn't this be the obvious solution? We have some of the lowest effective tax rates in the developed world - surely we have at least a little bit of wiggle room?

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