Potomac Fever is the blog of the Hamilton College Semester in Washington Program.
You know Sam, I really do not think it would be the end of the world if this was enacted in a limited fashion, but for the Obama administration to use this as their largest bargaining chip for the 2012 election exposes their lack of message for this election cycle. The problem is that change created by millionaires paying 'their fair share' really isn't that significant in terms of the debt crisis. Raising taxes on the wealthy will raise around $46 billion in new revenues in the next decade, which is change compared to the federal national budget of $1 trillion. In addition the tax increases that would make a significant difference are mathematically impossible, like Dean and I discussed last week, by 2050 taxes on the wealthy would increase by over 200%. So no, I just don't think its great politics because it would be succesful in the ideological realm, but their is no solidness to it- its not sustainable or even mathematically possible.
The journal article could not have said it better. We already have a system of progressive taxes--what is the meaning of raising taxes yet again--does the Obama administration have a straight answer? What is a "fair" tax rate? In their first step towards tax reform, they should close inefficient loopholes. They make it seem like people constantly break the laws to avoid taxes, e.g. Romney. However, last time I checked, Romney has just about won the Republican nomination and is not in jail. The Obama administration would do itself good to not speak like politicians but economists, and not speak of the "fairness" of the Buffet rule but how raising income taxes on the rich AND broadening the tax base by closing loopholes would give us more money for saving and investment.
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