David Brooks and Jackie Calmes of the Times offer exampes of the unspoken pundit assumption thattax hikes do not have consequences. as they describe the fiscal cliff negotiations. David Brooks spiked my blood pressure first:
The Truly Grand Bargain
So Republicans have to realize that they are going to cave on tax rates. The only question is what they get in return. What they should demand is this: That the year 2013 will be spent putting together a pro-growth tax and entitlement reform package that will put this country on a sound financial footing through 2040.
Republicans should go to the White House and say they are willing to see top tax rates go up to 36 percent or 37 percent and they are willing to forgo a debt-ceiling fight for this year.
This is a big political concession, but it’s not much of an economic one. President Obama needs rate increases to show the liberals he has won a “victory,” but the fact is that raising revenue by raising rates is not that much worse for the economy than raising revenue by closing loopholes, which Republicans have already conceded.
Caving on rates is a matter of opinion (and I think he is right) but he does include the message that tax hikes, especially poorly designed ones, can harm the economy.
However, he ends up in conventional liberal la-lal-land when he talks about a Grand Bargain compromise with this message:
Republicans could say to the country: Hey, we don’t like raising tax rates. But we understand that when a nation is running a $16 trillion debt that is exploding year by year, everybody has to be willing to make compromises and sacrifices. We understand that the big thing holding the country back is that the political system doesn’t function. We want to tackle big things right now.
Raising taxes on "the rich" is not a mater of forcing them to sacrifice. A doctor nearing retirement may decide to "sacrifice" by seeing fewer patients and sparing himself the aggravation of ObamaCare; an entrepeneur may decide to "sacrifice" by relocating in some other country. If the net impact of raising taxes on "the rich" is to harm the growth of the economy then this is a cutting one's nose to spite one's face type of scarifice.
Well. At least Mr. Brooks displayed some familiarity with the issue. Jackie Calmes has a piece cheerleading for even higher taxes with this galling headline:
Democratic Group to Offer Tax Plan With Huge Payoff
Democratic luminaries with ties to the Obama and Clinton administrations, including two former Treasury secretaries and two former White House chiefs of staff, on Tuesday will enter the tax debate with an overhaul plan that would raise an additional $1.8 trillion in the first decade.
That is $200 billion more than President Obama has proposed and $1 trillion more than Republicans in Congress support....
Geez, and if they tried for $3 trillion in new revenue the payoff would be even huger, since raising taxes has no downside in CalmesWorld.
One more challenge to the old BP:
“This is from the team that brought you the last good economy,” said John D. Podesta, a former chief of staff for President Bill Clinton, in reference to the Clinton-era pedigrees of many of the plan’s sponsors.
Wait, Newt Gingrich and Bob Dole are involved with this proposal too? I don't think so, yet their insistence on balanced budgets and tax cuts was surely part of the reason Clinton hid behind saving Social Security first rather than fulfilling liberal fantasies with new spending.