ziggy29
Moderator Emeritus
As long as we're honest that *any* tax increase does have at least *some* drag on taxable economic activity, I'm cool with that. There are more than ten trillion reasons why we probably have to reluctantly raise taxes (though I'd rather gradually but consistently cut spending when the economy doesn't require as much spending). But let's not pretend it's good for the pace of taxable economic activity, which we sorely need right now.Nobody is arguing for higher taxes, just saying they may be necessary and that it doesn't lead to the economic catastrophe that opponents claim -- like the current economic catastrophe, which we arrived at with lower taxes than in the '90s.
I don't think lower taxes were the reason for this catastrophe as much as reckless borrowing and lending on real estate, fueled by recklessly low interest rates from the Greenspan Fed and irresponsibly high appraisals to make the sale, and coupled with national policy encouraging marginal risks to own homes and "creative" financing options. If anything, given the mortgage interest deduction, higher tax rates would encourage larger mortgages for the tax dodge. All of these reckless inputs are independent of lower taxes.
I have no problem with the statement that we need to raise taxes. Unfortunately, we've backed ourselves into that corner. What I reject is the idea that it doesn't come with a price tag of reduced taxable economic activity, primarily buying stuff and employing people. And it's critical, therefore, that we don't take it too far, especially while the economy is this delicate.