AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (4 comments)

  1. Minorkle

    I concur

  2. The problem is, if every country raises their taxes to similar levels, then it doesn’t become a “failure” in the minds of social progressives – it becomes “fair”.

    Unfortunately, China, by positioning themselves as the world’s manufacturer due to cheap, expendable labor, centralized government, and their fixed currency, can literally “buy” the world out of debt until they can dictate terms to the world. Even if India can rise to counter China, we’ve simply replaced the US/USSR dominance with India/China: It still means bad news for the USA.

    I fear that the USA is beyond the point where it can lower their costs enough to be competitive – China will simply undercut us. One can only hope that the USA can stay economically and societally (?) cohesive long enough for the “rising expectations” of China’s underclasses to increase the burden on their economy – the very burdens we need to reduce here if we are going to get out of our economic malaise.

    Thanks for reading!

  3. Let’s put it differently, like this: If the state exploits taxation and the social safety net to achieve economic equality through wealth redistribution, then it will encounter problems raising revenues and controlling spending, and economic problems, too. Therefore, the overriding priority of tax policy must be to raise revenues without distorting economic behavior and incentivizing avoidance while the social safety net’s overriding priority must be to efficiently help those in need who can’t help themselves.

    If liberals (AKA socialists, progressives) were really pragmatic empiricists rather than ideologues, then they would reject the “values” of economic equality and social justice so that they could clear their heads and get to work on devising a tax system that efficiently generates sufficient revenues to help those most in need without distorting economic behavior and incentivizing tax avoidance and entitlement fraud. The economy will take care of itself.

    Think the liberals will do it – reject those two little, insignificant “values”? Don’t bet the farm.

  4. T Brubaker

    Worthless ideologically flavored ‘analysis’.
    The austerity tax increases were mostly VAT and pension contributions not income taxes.

    The reason for austerity in Europe is not to stimulate the economies of the laggard countries but to relieve German taxpayers (such as myself) of having to finance their deficits. The policies have not failed, the governing parties failed to get reelected. A little more directed economic stimulus might have helped and the steep cuts in government employment certainly hurt in the short term but the decificits did go down (They were already much lower than the US as a percentage of GDP).

    If you try to avoid framing everything that happens as an argument supporting the Republican low tax agenda, perhaps your articles would be more believable and read less like propaganda..,

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