Ross Douthat on Taxes #notintendedtobeafactualstatement

There is a central problem in the way that self-identifying conservatives think about taxation. Here's a perfect example from Ross Douthat's piece in today's New York Times:

All we need to do instead is let taxes rise and keep on rising. This is how the “current law baseline” cuts the deficit: Thanks to inflation and bracket creep, its tax code gradually subjects more and more Americans to rates that now fall only on the wealthy.

Listen carefully to Douthat's complaint. "More and more Americans" will fall into the wealthy category, and they'll become more and more resentful of paying what they have asked others to pay. The assumption behind this attack on taxes is that Americans are a selfish, greedy people. Conservatives assume that the people who want more tax revenues from corporations, hedge-fund managers, and professional wealth inheritors are poor or at least have no aspirations to be wealthy.

"More and more Americans" amassing wealth is of course not Douthat's goal; it's a flaw.

This view of American economic possibility is shockingly stratified: if you're poor, you root against the rich. If you're rich, you have no reason to pay into a social safety net system because you'll always be rich. Douthat's analysis is proper in highly authoritarian, economically constrained societies. The American model of supposedly meritocratic capitalism has no place for this picture of calcified economic position.

If Douthat wanted to actually address how Americans are going to provide for their future, he should be spending his considerable resources of time and influence thinking about how we can make it easier for Americans to break into the wealthy strata.

Ryan's Folly #notintendedtobeafactualstatement

The House takes up the Republican budget plan for FY 2012 today, authored by Wisconsin Republican Paul Ryan. Speaker Boehner has promised a united Republican vote for Ryan's Folly. The vote is non-binding, but sets a general plan in motion for the House. Think of it as a fantasy league budget resolution. No actual players are in the arena, and no actual money is being spent. So as long as we're clear that this is a fantasy vote in the House today, let's look at what, exactly the Republican fantasy entails.

Let's tackle the most important aspect in our national budget: health care costs. The striking thing about how Republicans plan to tackle health care costs is that they don't. Ryan's Folly shifts health care costs onto the elderly, providing them with health care 'vouchers' instead of health care. As health care costs continue their astronomical rise over the coming years, the vouchers will be provide less and less health care. Either the size of the vouchers will have to be increased, wiping out any potential savings for the federal budget, or seniors will have to pay much much more for health care than they already do. The voucherizing of a core American safety net for the middle class is the heart of Ryan's Folly.

Representative Ryan’s plan is the one that would change Medicare from a government entitlement program to a voucher-like system in which the US would help seniors buy private health insurance. To Republicans, it is something that shows they are serious about putting the nation’s fiscal house back in order.

This mischaracterizes the Republican plan. If anything, their plan puts the government's fiscal hosue in order, but without actually changing the amount of money being spent on health care by the nation as a whole. Even if seniors do attempt to save money for themselves by forgoing preventative treatment that they won't be able to afford with Ryan's vouchers, the costs will certainly show up on hospital balance sheets as unpaid medical bills. The money to help hospitals through that crisis will have to come from somewhere, and it will likely keep coming from taxpayer pockets one way or another.

When John Boehner says that Ryan's Folly saves Americans money, is resting on unbelievably faulty assumptions, ones that no health care expert or evidence-oriented economist would endorse. Plenty of economic theorists, fiction authors, and their devotees endorse the Republican plan. In the words of Jon Kyl's office, the Republican claims about Ryan's Folly are, "Not intended to be a factual statement." The plan will not cut the nation's deficit even by the measly $155 billion over ten years that they promise because they are based on ludicrous, disproven assumptions.