It's the (tax) revenue, stupid
Chuck Schumer: Democrats have tax reform all wrong
By Ezra Klein, WashPost
Sen. Chuck Schumer (D-N.Y.) is the Senate Democrats’ third-in-command, and widely acknowledged as the party’s top political tactician in the Senate. He’s also a bit shocked that his colleagues have, as he sees it, allowed themselves to get snookered into a vision of tax reform that begins with lowering rates. On Tuesday, he gave a speech trying to talk them out of it.We spoke on Friday about his position. A lightly edited transcript of our conversation follows.
Ezra Klein: The core of your argument is that tax reform in 2012 is proceeding atop a mistaken analogy to tax reform in 1986. So why isn’t 2012 like 1986?
Chuck Schumer: It’s not like 1986 for two reasons. First, in 1986, we didn’t have a deficit. The two greatest problems we face are declining middle-class incomes and huge deficits. Neither existed in 1986. The old model of tax reform doesn’t deal with either of those problems. It was revenue-neutral, so no new revenues, and, while it was slightly progressive, that was not its intent. So if your goal is to reduce the deficit, you can’t really use the old model.
EK: So why is the 1986 model so popular today?
CS: The reason, I think, is a longing for anything that looks bipartisan. Republicans have not been willing to raise revenues outright. So they’ve hidden by calling for tax reform. Tax reform has allowed us to duck the issue of revenues for too long.
(More here.)
Sen. Chuck Schumer (D-N.Y.) is the Senate Democrats’ third-in-command, and widely acknowledged as the party’s top political tactician in the Senate. He’s also a bit shocked that his colleagues have, as he sees it, allowed themselves to get snookered into a vision of tax reform that begins with lowering rates. On Tuesday, he gave a speech trying to talk them out of it.We spoke on Friday about his position. A lightly edited transcript of our conversation follows.
Ezra Klein: The core of your argument is that tax reform in 2012 is proceeding atop a mistaken analogy to tax reform in 1986. So why isn’t 2012 like 1986?
Chuck Schumer: It’s not like 1986 for two reasons. First, in 1986, we didn’t have a deficit. The two greatest problems we face are declining middle-class incomes and huge deficits. Neither existed in 1986. The old model of tax reform doesn’t deal with either of those problems. It was revenue-neutral, so no new revenues, and, while it was slightly progressive, that was not its intent. So if your goal is to reduce the deficit, you can’t really use the old model.
EK: So why is the 1986 model so popular today?
CS: The reason, I think, is a longing for anything that looks bipartisan. Republicans have not been willing to raise revenues outright. So they’ve hidden by calling for tax reform. Tax reform has allowed us to duck the issue of revenues for too long.
(More here.)
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