Readers wanting a more insightful discussion of tax reform than your Sept. 20 editorial (“Raising taxes not real tax reform”) should read the testimony of Diane Lim Rogers, chief economist the Concord Coalition, before the House Budget Committee.

In it she states, “Given the demographic pressures of an aging population (which we cannot change) and rising per capita health care costs (which we don’t yet fully understand how to change), a spending-side-only strategy would mean drastic cuts in real, per capita benefits, which I don’t believe either political party really wants.”

The Republican push to cut spending deserves consideration in one respect. Given that a social safety net is vital to a healthy and compassionate society, but that our tax dollars are limited, why not eliminate all safety-net spending that accrue to those making $1 million or more?

Why should we help the rich pay for things they can already afford such as retirement, health care and multiple homes? Let’s means test Social Security and Medicare benefits, and eliminate mortgage interest deductions for all but a primary residence. Let’s also change the long-term capital gains tax — which applies almost exclusively to the rich — from a flat 15 percent to a multi-bracket, progressive tax that mirrors earned income tax rates.

To those who would decry this approach as attacking the “job creators,” here’s a question. If lower taxes are all that’s needed for “job creators” to do their thing, why isn’t the U.S. labor market swimming in jobs today, given that the top marginal tax rate has descended over the last several decades from 92 percent to 35 percent and the capital gains tax is at an historic low?

Indeed, from 1946 to 1986, jobs were plentiful while the highest marginal tax rate floated between 50 percent and 92 percent.

 


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