Tax links of the week

Slow week in the way of news directly about taxes, but I’ll have a longer post about the VAT in the next few days.

1. The Political Economy of Consumption: ‘Tis Better to Give, and Give, and Give – Howard Gleckman takes a pretty negative view towards tax reform.  The article has a David Brooks-esque tone because it ascribes large features of politics (our low taxes) to personality and culture (Americans’ love of consumption).  I am less pessimistic than Gleckman, mainly because I believe in crisis’ power to quickly alter our behavior.  His key insight is about the Deficit Commission: “More than defining specific deficit reduction proposals, the most valuable role President Obama’s fiscal commission could play is finding a way to change America’s spending uber alles mindset. Until we do, fiscal prudence will continue to be a political loser, and the red ink will flow faster than ever.”
2. The Obama Deficit Commission: Five Issues to Watch – So I read a lot of Gleckman this week.   Gleckman identifies five holy tenets on which Republicans and Democrats will have to compromise if we are to see a structural correction.  Republicans will have to admit that we need more taxes; some of these taxes will have to be on people not in the top 5% of earners; Social Security requires some tinkering; Republicans need to help Democrats create efficiencies in Medicare; and a politician needs to take the lead in breaking the political status quo.
3. An All-Time Fiscal Fallacy: Tax Cuts Starve the Beast – When the book is written about the bankruptcy of Republican ideas, Starve the Beast will be right up there with preemptive strikes.  And Bruce Bartlett will have a featured role as one who went from earnest reformer to strident critic as relatively innocuous ideas became hijacked by crass ideologues.  Theoretically, Starve the Beast means that we should support tax cuts as a means to shrinking the government.  Realistically, we’ve evolved to not want less spending, and Starve the Beast is just an ideological crutch that kicks the can of responsibility farther down the road.