Tuesday, December 03, 2002

Blog Banter - Andrew Sullivan has posted a critical commentary in his "Daily Dish" for Tuesday, December 3, 2002, on the Krugman column that I addressed in my previous post. Thanks to Andrew for pointing me to the original WSJ article that Krugman is responding to, as well as to the E.J. Dionne Jr. article in the Tuesday, Nov. 26, Washington Post that Sullivan claims Krugman ripped off. After reading all the relevant articles, I must agree to some extent with Sullivan that Krugman's column isn't really an original and really does borrow from Dionne's piece, which is clearly the more superior critical economic analysis. However, I see nothing wrong with rehashing the same line; and I find it perfectly believable that Krugman and Dionne can get incensed by the same parts of the article without having read each other's pieces. Pundits repeat outrages all the time. Perhaps Andrew takes offense that Krugman didn't give Dionne his due; but I would say that, though the basis of each of the two columns is the same, the points that each is trying to make are quite different. Krugman is playing up the notion of taxing the poor even more so that they can come to "despise" an intrusive and abusive government, but Dionne focuses more on the economic fallacies of the argument. In any case, I still think Krugman's overall argument is valid, and while Krugman may have exaggerated that the WSJ editorial calls for tax increases on the poor, it is certainly implied. And this is where Andrew Sullivan is a bit disingenous. He claims the article is actually arguing that "any further reductions in net taxes should be avoided." But that is simply not true. The picture that the article paints is one of the "context" in which a Republican Congress and Presidency consider further tax relief. Much like the article never explicitly says that taxes on the poor need to be raised, the article never says that taxes on the wealthiest income earners should not be reduced further. The difference is that the former is certainly implied, while the latter is not implied at all. And here Krugman is more honest than Sullivan. The WSJ article calls for a reconsideration of the "two-tiered" tax system, preferably - if the tax burden disparities based on income level pointed out in the article mean anything - in a way that "corrects" the imbalance in who bears the tax load burden. In other words, the reconsideration of this "two-tiered" tax system should more fairly and properly equalize the tax burden born by the different income groups, and this effectively means reducing the share of the tax bill borne by the top income earners and increasing the share borne by the bottom income earners. It is my reading of the article that, by painting a picture of an apparent growing disparity between who pays more of the share of the national tax bill and who pays less, in order for those wealthy who are footing an ever greater percentage of the tax bill to get some tax relief, the issue of those who have a disincentive to care about further tax cuts because they don't pay income taxes, needs to be resolved. And that resolution is a zero-sum game in which tax cuts for the "overtaxed" need to be balanced by a growing income tax stream from those "undertaxed." This is the real gist of the article, and Andrew Sullivan refuses to recognize it. For him to say that the WSJ is arguing against more and deeper tax cuts for the top income earners is simply absurd - especially since the purpose of the article is to address a tax system that "undermines the political consensus for cutting taxes at all." The goal is not to prevent further tax cuts, but just the opposite - to create an environment more supportive of further tax cuts, which will only happen if those who currently don't pay income taxes have a future tax bill to complain about, too.

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