Taxes and the Deficit Commission

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Criticism of the deficit commission report continues apace. Matt Yglesias:

The flipside of the Simpson-Bowles document’s unsound aggregate cap on revenue is that they were very uncreative in their exploration of revenue options. For example, what about a tax on greenhouse gas emissions? The mere fact that the conservative movement is currently engaged in a massive fit of pretending that greenhouse gas emissions aren’t a problem doesn’t change the fact that greenhouse gas emissions are, in fact, a problem. Taxing them would reduce the quantity of greenhouse gas emissions and help mitigate the problem. It also creates revenue.

In fairness, they do recommend a gasoline tax. It’s a small one, but at least it’s there as a talking point. So I guess they deserve a bit of credit for that.

But that brings up another point: one entire section of the report is devoted to comprehensive tax reform. Why? Broadening the base of the tax system and reducing marginal rates might or might not be a good idea, but it doesn’t really have anything to do with deficit reduction.1 In fact, the only tax-related subject that’s germane to deficit reduction is increases in total tax revenue. The report mainly addresses this in its discussion of reducing tax expenditures, which is a perfectly defensible way of raising more revenue. But why go beyond that to a root-and-branch proposal for tax reform that’s essentially revenue neutral?

As with the entire report, the answer is ideological: this is less a report on reducing the deficit than it is a report on remaking the government in a conservative image. Which, again, is fine, if you’re a conservative think tank and this is what you believe. But it’s not what a report should be if it’s a supposedly nonideological effort to reduce deficits. That kind of report should focus solely on cutting spending and increasing revenue, not on remaking the tax system.

1The co-chairs’ argument — though it’s articulated only glancingly in the body of the report — is that their version of tax reform would spur economic growth and thus help reduce the deficit. This is a defensible argument, but it’s also a highly ideological one. It’s really not appropriate in a document that’s supposedly a neutral take on deficit reduction.

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As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

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