What Republicans Ought to Bargain For (Part II)

It’s always odd to get into a simultaneous fight with someone on the left and someone apparently on the right, but I have to respond to two commenters to my post on Greg Mankiw’s proposal for what Republicans could bargain for if they actually wanted to engage on the issue of deficit reduction.

Jake Collins thinks it’s appalling that I would support a value-added tax or VAT, one of Mankiw’s proposed trades, because it “cuts taxes on the rich and raises them on the middle-class and the poor.” Why, he asks, would liberals favor that?

I’m not saying liberals necessarily do favor a VAT. I just said I am a comparatively liberal person, and I think it’s a good idea. Note, by the way, that the most rabid opponent of a VAT is the Wall Street Journal editorial page, which is righteously right-wing.

But the real point is this: don’t be dogmatic.

1) A VAT is not the same thing as a flat tax, which really would be regressive. In European countries, the VAT comes on top of an income tax, which is still progressive. I don’t hear many people accusing Germany, France or Belgium of being right-wing. (And having lived and worked six years in Europe, trust me: their conservatives are to the left of Bill Clinton and possibly Obama.)

2) A VAT can be tweaked in many ways to keep it from being regressive. Yes, middle-income families might end up paying more than before. But it absolutely does not follow that wealthy taxpayers would end up paying less than before.

3) I would submit that many middle-income people (including me) SHOULD pay more. The government needs to raise more revenue to provide the services that voters demand, and middle-class people benefit from those services too.

Rich people should pay more taxes, and I support repealing the Bush tax cuts for households earning more than $200,000. But our system is already too dependent on the very top earners, and you cannot raise all the additional money needed just by hitting up the top 2 percent. Some of that money has to come from further down the income ladder. And why shouldn’t it? Where is it written that 40 percent or so of taxpayers should not owe income tax?

Jim Glass complains at length about my assertion that Republicans don’t want to engage in serious discussion about deficit reduction. “Who are the Democrats who are agreeing to engage on the spending side of the equation?” And he goes on at length.

Jim: get real. Obama HAS said the entitlement cuts and other spending cuts are on the table. So have many other Democrats, notably Senator Kent Conrad, chairman of the Senate Budget Committee.

Republicans in Congress have made obstructionism the North Star of their strategy. They are blocking anything and everything they can — health care, stimulus, a carbon-trading bill, even the deficit-reduction commission. Along the way, Republicans have been forced to repudiate their own positions (like the seven who co-sponsored the deficit commission before voting against it) and they often tell whoppers and howlers to justify their positions. (E.G., the stimulus bill hasn’t created “one new job…”)

From a short-term political standpoint, obstruction may well be the smart strategy. It’s mind-boggling to me, but Republicans are enjoying a bounce in the polls. But let’s be clear about what’s going on: the GOP wants to deny Obama and the Democrats any and all legislative victories. It has no interest in discussion, bargaining or compromise. It’s a deeply cynical strategy, but it’s also transparently obvious.

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About Edmund L. Andrews 37 Articles

Edmund L. Andrews spent two decades as a business and economics correspondent for The New York Times. During that time, he covered many of the nation ’s most transforming events, from the Internet and biotech revolutions to the emergence of capitalism in central Europe and Russia and the Federal Reserve under Alan Greenspan and Ben S. Bernanke. In 2009 he published BUSTED: Life Inside the Great Mortgage Meltdown (WW Norton), his own harrowingly personal account of the epic financial crisis. He has frequently appeared on major television and radio news programs, from the NewsHour with Jim Lehrer and Today to 20/20, All Things Considered, Lou Dobbs on CNN, the Colbert Show, BBC Worldwide, MSNBC and CNBC.

Ed began his affiliation with The Times in 1988 when he covered patents, telecommunications, and technology. In 1992, he joined the Washington bureau of The Times as a domestic correspondent and reported extensively on the business and politics surrounding the convergence of cable television, the Internet and broadband digital networks. In 1996, Ed became The Times’ European economics correspondent and its Frankfurt bureau chief. He returned to Washington in 2002 and became the bureau’s lead economics correspondent and The Times’ main eyes and ears on the Federal Reserve.

Prior to joining The Times, Ed worked as a magazine writer specializing in business and economics. Before that, he was an assignment editor for Cable News Network in Washington and an education and city government reporter at The Sentinel-Record in Hot Springs, Ark.

Ed graduated magna cum laude from Colgate University in 1978 with high honors in international relations. In 1981, he received a master’s degree in journalism from Northwestern University. He is married to Patricia Barreiro and has four children – Ryan, Matthew, Daniel and Emily.

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