…in his pushback to my Upshot piece.
He writes: “I don’t think even Bernstein believes that it’s actually impossible to improve the situation of the poor without directly raising taxes on the rich.”
True! And I think the ideas he suggests are good ones. I can’t speak to the anti-poverty magnitude of “urban upzoning” and I’m not sure it’s cheap either—increasing housing density in existing neighborhoods may call for expanding public utilities and services, including transportation (though perhaps you’d be reducing them elsewhere). And while I point out the limits of what I call “the behaviorists” here, there are some low-cost anti-poverty elasticities in that bin that could be further tapped for sure. And “yes” to decriminalization of nonviolent offenses.
Ross next agrees we could pay for an expanded EITC, something I (and many others) recommend, by “cutting or capping existing tax subsidies.” Now we’re totally on the same page. We need to raise revenues, not necessarily rates (I cite only effective, or average, tax rates in the piece—Ross is talking about marginal rates). I will only say that from where I’ve sat in the middle of the DC tax debate, there are many influential people (one is named after a Muppet) who view capping the wealthy’s tax subsidies as soaking them (btw, that idea–to cap tax deductions for the wealthy at 28%–has been in every Obama budget).
His third point is a healthy skepticism about the bang-for-buck re investments in education. True dat—it’s easy to waste resources in this space. I cited a) quality pre-school as there’s a very solid research base behind that and b) college completion, where we may be learning new ways to do that on the cheap.
There’s one way in which Douthat misrepresents my argument. He missed this ‘graf:
To be clear, the tax burden on all Americans, not just the wealthy, is low both in historical and international terms. We’re collecting less revenue than many other advanced economies and less than we have in the past. So it’s not just the rich that will ultimately have to pony up if we’re going to continue to fund the things we want and need in a sustainable way.
OK, clearly I’m not running for office. And the next sentence does say: “…since most of the pretax income growth in recent years has accrued to households at the top scale, that’s an obvious place to start.” But it’s curious how readers often miss this broader point–we can’t raise the revenues we need exclusively from the top few percent–in their zeal to play the soak-the-rich card.