Tuesday, February 15, 2011

An informative interview on budgets, and some comments

Merrill Goozner, who's blog GoozNews I've recommended several times, recently gave a very interesting interview to Washington Journal on C-span. You can get to the video HERE. I wrote some comments on this which I reproduce below.

Mr. Goozner,

I watched your C-Span interview with great interest. You were, it seems to me, too fair toward both political parties — especially the Republicans. However, that’s probably what has to be done on C-Span.

What was absent from the discussion was the issue to tax increases. No one wants to “de-stimulate” the economy, but certain taxes, it seems to me, fall rightly and squarely on non-productive income. First of all are two proposed taxes that Make Wall Street Pay. The first of these is elimination of capital gains treatment of income for hedge-fund managers, who are risking only their clients’ assets. (Actually, I rather support elimination of the capital gains discount for everyone, but that is another argument). The second, and even more important, is a tax on stock transfers — say 1/2% on sale and 1/2% on purchase for every transaction. This would make speculators pay a “sales tax” on their non-productive churning activities. It would also raise a lot of money and would have no effect on our nascent economic recovery. The general rubric here is “Tax the Parasites.”

We should return to higher taxes on the wealthy, but that is probably impossible in the current rightist atmosphere. I’ve never seen any evidence that these higher rates for higher income have adversely affected the economy — they don’t in other industrialized countries. Our tremendous gap between haves and have-nots can hardly be beneficial, since other countries with more modest gaps seem to be doing far better in this recession.

Of course we all know that Social Security can be safely preserved for several generations simply by extending FICA to all incomes (or even leaving a non-taxed gap between say $110,000 and $200,000).

The problem of healthcare is much more complex. Health insurance is a huge drag on our economy, since it is a major expense for many employers, who must compete with foreign companies that don’t have to pay for it. We should have had single-payer or some sort of Medicare buy-in (formerly supported by some Republicans). But we didn’t. We still could move toward a hybrid system such as they have in France. Instead, we really have nothing very innovative at the moment; certainly nothing beyond a hope that universal care will include enough preventative medicine to slightly lower the chronic disease rate. Republicans have absolutely no serious input in this discussion.

I enjoyed your interview, but had hoped that you would include some of these tax issues in it.

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