I know Yglesias is not popular around these parts… but what the heck, he nails a big issue here:
Latest column is about President Obama’s absurd endorsement of Marco Rubio’s absurd bill to exempt prizes won by Olympic athletes from taxation.
For the deep cuts, let me say that I think it’s particularly dangerous for liberals to get into this game. Obviously the specific revenue implications of this bill are small. But the framing around it is deeply right-wing. The idea is that taxes are a kind of penalty, and that we shouldn’t be penalizing these worthy athletes for their efforts.
Look, let’s say Obama wins. All sorts of good things happen. We get a government where regulators actually have freedom to regulate industry. We get to nominate a bunch of sane people to the courts. We get to keep Obamacare in place. We probably avoid war with Iran. All of this is good enough in itself. So please do not for a second believe I have doubts about Obama or am uncertain about voting for him.
But the reality is that if Obama gets everything he wants on the tax front — extension of all Bush/Obama tax cuts for income up to $250k — we still end up with a massive structural deficit that will feed a “need” for new and increased budget cuts and austerity. Of course, austerity continues and extends the weak job picture, which further saps government revenue, which further creates pressure for deficit reduction.
One of the biggest threats we face to health care reform and the social safety net in the long run is the fact that federal revenue are at a 60+ year low as a percentage of GDP. And we can’t rebuild the revenue base without raising taxes… and we will have trouble raising taxes as long as liberals jump on the anti-tax bandwagon as a political expedient.
The GOP wants to “starve the beast.” Supporting policies that justify this starvation is problematic.