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Tax Policy
A Tax Raise We Can Believe In
(4/6/2009) - The budget deficit for 2009 will, for the first time, exceed a trillion dollars. The Obama administration is projecting that 2009’s record will be surpassed in 2010.
Money is, among other things, a claim on goods and services. Borrowing massive amounts of money is in effect promising to perform services or produce goods in the future, which will result in collecting more taxes in the future.
Obama justifies the current spending and the stimulus package in particular as necessary to keep the economy out of the ditch and get it to produce wealth at its capacity. Without spending, the economy will sink further, which will mean less production and debts just as high. And, he argues, if we invest in education, reducing health-care costs, and an ability to produce clean energy, we will set the stage for paying off the debts we are incurring now.
On these points I agree with Obama.
I do not agree, however, with another of Obama’s propositions – that we should avoid raising taxes during times of economic distress. Now, I wouldn’t advocate an across-the-board tax hike. Raising taxes on America’s poorest (a category which I conveniently fall close to) is probably not desirable.
