Two stories on taxes caught my eye today, so this column will really just point you to these two bits of news, with only a few peripheral comments. Just to prepare you in advance.
Earlier this week, I suggested some reasonable ways to restore a modicum of fairness to the tax code. One of the responses I got asked about the dollar amounts some of these taxes might bring in -- in other words, challenging me to make a stronger case by adding "...which will bring in X billion dollars in revenue over the next ten years" to the taxes I was calling for.
Well, ask and ye shall receive, at least on one of them. Adding a small transactions tax to speculative financial transactions (0.25 percent is the figure most often suggested) could raise quite a bit of money, it turns out.
The story, over at the Fairness & Accuracy In Reporting site, details how there has been a virtual blackout on this story in the media. Now, righties like to use the term "liberal media" and lefties like to decry Fox News for being partisan, but the more shrewd way to look at our media is through a corporate lens. This is the only reasonable explanation as to why this suggested tax has been all but frozen out of the corporate media outlets.
But while the story mostly focuses on the media's shortcomings, it does include some hard data:
The idea has been discussed among activists and economists, especially since the financial crash. Such a tax could raise between $170-$350 billion annually, according to the Center for Economic & Policy Research (CEPR) and the Political Economy Research Institute. An analysis of the bill written by Rep. Peter DeFazio of Oregon and Iowa Sen. Tom Harkin found it could generate a more modest $353 billion over 10 years. Aside from the revenue argument, proponents argue that it could serve as a check on some of the riskier forms of high-frequency, high-volume trading.
That's a pretty wide window of projections -- an order of magnitude, in fact. Even so, the prospect of raising between $353 billion and $3.5 trillion over ten years is nothing to sneeze at. That's a significant amount of money, even in Washington. Raising the money with such a tax would make the math easier for the grand bargaining currently going on between President Obama and Speaker Boehner. So perhaps it's at least worth a mention, eh?
The second story is an interesting one, because it also has been subject to a complete blackout in the news, for the most part. Democrats have only themselves to blame for this one, since they are the ones who should be mentioning it every time they appear before the cameras.
Right before the elections, the Congressional Research Service -- a non-partisan group -- put together a report on the relationship between high taxes on the wealthy and economic growth. Looking over tax rates and economic growth since World War II, the study found "negligible effect on economic growth" from a small rate change for the wealthiest Americans.
Got that? Instead of partisan ideology, the Congressional Research Service looked at the data and found that higher tax rates do not affect economic growth much, if at all. To put this another way, this yanks the rug out from under a major Republican argument in the whole battle over taxes.
Of course, this only works if Democrats actually make the argument -- loudly, and publicly. "Actually, I have to disagree with my Republican colleague. Research from Congress' own non-partisan research office showed quite plainly that a modest raise in income tax rates on the wealthiest Americans does not impact economic growth at all, or if so, only negligibly. That is the truth of the matter. That is what the data show. Lower tax rates for the upper-income ranks only increase income equality -- they do not stifle economic growth. This is proven by the last sixty years of history."
I'm waiting to see someone make that argument in a television interview, personally.
-- Chris Weigant
Follow Chris on Twitter: @ChrisWeigant