Site Meter

Friday, November 05, 2004

Class War

The Democrats decades long effort to be Republican light has not succeded yet. I have long thought that an extreme proposal to increase the progressivity of the tax code would be both good policy and good politics. The Republicans would reply by accusing the Democrats of class war. So ? Seems a pretty feeble argument. It would make rich journalists hostile. Like they are so sympathetic now. It would make it hard to raise money, but not impossible with the small donations on the internet and the Kerry campaign showed the limits of money without slogans.

I am sure that this would be popular. Whenever it is polled it is popular (this is very rarely).
I am also sure it would be good policy. Roughly a good case would be that this is what Clinton did with his increase of income taxes on the top 2 million households and increase in the EITC.

I think there is clearly an active margin of people deciding whether to participate in the labor market including married women and young people. Problems with high taxes on rich people seem to me to be difficult to detect in practice by people who don't cheat (no names but there are two in my mind).

I'd say eliminate income tax on all earnings under $ 50,000 for a family of 4. This isn't even much money.

Now a better policy would be payroll tax reform, but eliminating the income tax for many households would be better politics.

This seems obvious to me. I have never heard an even semi convincing argument against it.

No comments: