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<DIV class=left><A href="http://www.nytimes.com/"><IMG border=0 hspace=0
alt="The New York Times" align=left
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<DIV class=timestamp>April 13, 2011</DIV>
<DIV class=kicker></DIV>
<H1><NYT_HEADLINE type=" " version="1.0">Raise America’s
Taxes</NYT_HEADLINE></H1><NYT_BYLINE>
<H6 class=byline>By <A class=meta-per
title="More Articles by Nicholas D. Kristof"
href="http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/nicholasdkristof/index.html?inline=nyt-per">NICHOLAS
D. KRISTOF</A></H6></NYT_BYLINE><NYT_TEXT>
<DIV id=articleBody><NYT_CORRECTION_TOP></NYT_CORRECTION_TOP>
<P>President Obama in his speech on Wednesday confronted a topic that is harder
to address seriously in public than sex or flatulence: America needs higher
taxes. </P>
<P>That ugly truth looms over today’s budget battles, but politicians have
mostly preferred to run from reality. Mr. Obama’s speech was excellent not only
for its content but also because he didn’t insult our intelligence. </P>
<P>There is no single reason for today’s budget mess, but it’s worth remembering
that the last time our budget was in the black was in the Clinton
administration. That’s a broad hint that one sensible way to overcome our
difficulties would be to revert to tax rates more or less as they were under
President Clinton. That single step would solve three-quarters of the deficit
for the next five years or so. </P>
<P>Paradoxically, nothing makes the need for a tax increase more clear than the
Republican budget proposal crafted by Representative Paul Ryan. The Republicans
propose slashing spending far more than the public would probably accept — even
dismantling Medicare — and rely on economic assumptions that are not merely
rosy, but preposterous. </P>
<P>Yet even so, the Republican plan shows continuing budget deficits until the
2030s. In short, we can’t plausibly slash our way back to solid fiscal ground.
We need more revenue. </P>
<P>Kudos to Mr. Obama for boldly stating that truth in his speech — even if he
did focus only on taxes for the very wealthiest. I also thought he was right to
say that we need spending cuts — including in our defense budget. Mr. Obama
didn’t say so, but the United States accounts for almost as much military
spending as the entire rest of the world put together. </P>
<P>As I see it, there are three fallacies common in today’s budget discussions:
</P>
<P></P>
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<P></P>
<P>• <EM>Republicans are the party of responsible financial stewardship,
struggling to put America on a sound footing.</EM> </P>
<P></P></DIV>
<P></P>
<P>In truth, both parties have been wildly irresponsible, but in cycles.
Democrats were more irresponsible in the 1960s, the two parties both seemed
care-free in the ’70s and ’80s, and since then the Republicans have been
staggeringly reckless. </P>
<P>After the Clinton administration began paying down America’s debt,
Republicans passed the Bush tax cuts, waded into a trillion-dollar war in Iraq,
and approved an unfunded prescription medicine benefit — all by borrowing from
China. Then-Vice President Dick Cheney scoffed that “<A title=" "
href="http://www.forbes.com/fdc/welcome_mjx.shtml">deficits don’t matter</A>.”
</P>
<P>This borrow-and-spend Republican history makes it galling when Republicans
now assert that deficits are the only thing that matter — and call for drastic
spending cuts, two-thirds of which would <A title="An analysis of the Ryan plan"
href="http://www.cbpp.org/cms/index.cfm?fa=view&id=3458">harm low-income and
moderate-income Americans</A>, according to the Center on Budget and Policy
Priorities. To pay for tax cuts heaped largely on the wealthiest Americans,
Republicans in effect would gut Medicare and slash jobs programs, family
planning and college scholarships. Instead of spreading opportunity, federal
policy would cap it. </P>
<P></P>
<DIV style="MARGIN: 0px 0% 8px 5%; CLEAR: none" class=story>
<P></P>
<P>• <EM>Low tax rates are essential to create incentives for economic growth: a
tax increase would stifle the economy.</EM> </P>
<P></P></DIV>
<P></P>
<P>It’s true that, in general, higher taxes tend to reduce incentives. But this
seems a weak effect, often overwhelmed by other factors. </P>
<P>Were Americans really lazier in the 1950s, when <A title=" "
href="http://www.ntu.org/tax-basics/history-of-federal-individual-1.html">marginal
tax rates peaked</A> at more than 90 percent? Are people in high-tax states like
Massachusetts more lackadaisical than folks in a state like Florida that has no
personal income tax at all? </P>
<P>Tax increases can also send a message of prudence that stimulates economic
growth. The Clinton tax increase of 1993 was followed by a golden period of high
growth, while the Bush tax cuts were followed by an anemic economy. </P>
<P></P>
<DIV style="MARGIN: 0px 0% 8px 5%; CLEAR: none" class=story>
<P></P>
<P>• <EM>We can’t afford Medicare.</EM> </P>
<P></P></DIV>
<P></P>
<P>It’s true that America faces a basic problem with rapidly rising health care
costs. But the Republican plan does nothing serious to address health care
spending, other than stop paying bills. Indeed, Medicare is cheaper to
administer than private health insurance (2 percent to 6 percent administrative
costs, depending on who does the math, compared with about 12 percent for
private plans). So the Republican plan might add to health care spending rather
than curb it. </P>
<P>The real challenge is to control health care inflation. Nobody is certain how
to do that, but the Obama health care law is testing some plausible ideas. These
include rigorous research on which procedures work and which don’t. Why pay for
surgery on enlarged prostates if certain kinds of patients turn out to be better
with no treatment at all? </P>
<P>Ever since Walter Mondale publicly committed hara-kiri in 1984 by telling
voters that he would raise their taxes, politicians have run from fiscal
reality. As baby boomers age and require Social Security and Medicare, escapism
will no longer suffice. We need to have a frank national discussion of painful
steps ahead, and since I’m not a politician, let me be perfectly clear: raise my
taxes!  </P></DIV></NYT_TEXT></FONT></DIV><FONT size=2>
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