Liberal New York Times economics reporter turned leftist economics columnist Eduardo Porter is appalled that Americans refuse to go along with confiscatory tax rates like the rest of the civilized world, and suggested racism is part of the problem, in Wednesday’s “Considering the True Cost Of Keeping Taxes Lower” on the front of the Business Day section. And on Thursday reporter Alan Rappeport continued his snotty and quite selective concern about deficit spending, now that Republicans are threatening tax cuts.
First, Porter denigrated the idea of American "rugged individualism" and moved to "racial hostility" as the cause for the strange unwillingness of Americans to pay high taxes:
American tax policy must stand as one of the great mysteries of the global political economy.
Wagner’s Law, named for the 19th-century German economist Adolph Wagner, states that government spending as a share of the economy will increase as nations get richer and their citizens demand more and better public services. This may approximate public policy in other industrialized nations. In the United States, it fails.
Americans are paying dearly as a result, as their comparatively small government has proved incapable of providing an adequate safety net to protect those most vulnerable to globalization and technological change.
It is hard to understand the deep reasons behind the American aversion to taxes and government. Is it the vestigial expression of a rugged individualism born on the American frontier? Is it racial hostility -- an unwillingness by whites to fund social programs that some believe unduly benefit minorities?
And whatever apologists for small government might argue, there is no credible evidence that countries with higher tax rates necessarily grow less.
Over the last couple of weeks, Republicans have offered legislation to cut taxes by $1.5 trillion over the next decade — more than half a percentage point of G.D.P. They assert a dire need to stimulate growth by encouraging corporations to invest in the United States.
I have written about this country’s uniquely stingy tax policy before. Small government, I believe, has proved to be no match for its social ills, too puny to offer much resistance to rampant inequality, stubborn infant mortality or off-the-charts opioid addiction. American voters’ uniquely intense hostility toward trade can, in the same way, be traced back to the government’s ineffectiveness in mitigating trade’s disruptions.
Porter cited a study from the liberal Brookings Institution that “Raising the exemption on the estate tax to $11 million, as Republicans propose, will help only a narrow sliver of ultrarich Americans”:
It is hard to conclude that the Republican proposal is about anything but that narrow sliver. If it succeeds, it will transform the United States from a low-tax country to a lower-tax one. And the mystery will persist: In cutting taxes as babies die and adults waste away in addiction, what do Americans mean by nation?
On Thursday, the Times’ Alan Rappeport continued his snotty and quite selective concern about deficit spending in “Tax Rewrite Could Mean Cuts in Safety Nets.” Now that Republicans are threatening tax cuts, it’s suddenly time to drag up the deficit as an issue (something the Times rarely cared about during the big-spending Obama years):
Republican lawmakers have largely dismissed concerns about how their $1.5 trillion tax cut would add to the federal deficit. Now, some Democrats are warning that the tax rewrite would ultimately be financed by gutting entitlement programs like Social Security and Medicare.
The possibility of cuts to safety net programs appeared more likely on Tuesday, as the Congressional Budget Office warned that the tax bill could set off an arcane budget rule that would make deep cuts to Medicare over the next decade.
Republican lawmakers have turned a blind eye to the effect of the tax bill on the deficit, saying the tax cuts would essentially pay for themselves through increased economic growth.
But the party of deficit hawks is beginning to once again complain about the ballooning federal deficit, suggesting that spending cuts must be enforced to reduce the national debt, which has surpassed $20 trillion.
At a town hall-style event in Virginia on Tuesday night, Paul D. Ryan, the House speaker, said the most important steps that could be taken to reduce the national debt were spurring economic growth and making changes to entitlement programs.
Rappeport eagerly quoted Democrats using "nasty" names.
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Democrats said the tax bill was opening the door to the kind of entitlement cuts that Republicans had long wanted to pursue.
“This is a nasty, two-step strategy that has long been the holy grail for hard-right Republicans,” said Senator Chuck Schumer, Democrat of New York and the minority leader. “If this bill passes, you can bet the Republicans will immediately sharpen the knives for middle-class benefits.”
If Republicans decide to try to circumvent the pay-as-you-go rule, it could be taken as a sign that they are not serious about deficit reduction. For Democrats, it could be enticing to show the public the consequences of Republican-driven tax cuts, but it would be difficult for them to essentially support cuts to a government program that provides health insurance for the elderly.