We need higher taxes - By Robert J. Samuelson
Can we get real about “tax reform,” the Republican promise to enact deep tax cuts that will spur economic growth? Probably not, but let’s give it a try.
For starters, we can stop calling it “reform.” That’s a charged word, implying that the new tax system will be superior to the old. We don’t know that for a fact; the new system might be worse. Better to call what we’re doing the “tax debate” or “tax overhaul.” (The point is a general one. Advocates of policy changes routinely label their proposals “reform.” This suggests improvement, which may be nonexistent.)
Second, we cannot afford a net tax cut. If we are to lower tax rates and simplify complex tax provisions, we must offset the revenue losses by plugging loopholes, raising other taxes or cutting spending. Under current policies, the Congressional Budget Office has projected $10 trillion in deficits from 2018 to 2027. Trump’s tax plan, including provisions that would raise revenue, would add an additional $3.5 trillion in deficits over a decade, estimates the nonpartisan Tax Policy Center (TPC).
Third, if tax cuts were initially financed by more deficit spending, the costs of today’s lower taxes would be transferred to future generations. “Tax cuts often look like ‘free lunches’ for taxpayers, but they eventually have to be paid for with other tax increases or spending cuts,” says a new report from the TPC. (The report is based on a broad outline of Trump’s plan, subject to change.) This is not “reform.” Social Security and Medicare — paid mainly by workers’ payroll taxes — already involve huge intergenerational transfers. Deficits are both a cause and consequence of those transfers.
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https://www.washingtonpost.com/opinions/we-need-higher-taxes/2017/08/27/1016c174-89a9-11e7-a94f-3139abce39f5_story.html
