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Friday, May 04, 2007
Tax, Spend and PAYGO
Chris Hayes of The Nation writes that state politicians are "taxing and spending," and being rewarded for it. Will their success encourage Washington to do likewise?
People seem ready to accept higher taxes, but only if those taxes are sold to them as paying for services they want the government to provide. "The notion that [social programs] are what Democrats want and what Republicans abhor may have been true thirty years ago," Carona told me. "But I feel like there's been a shift. Now everybody wants the programs, but one group is unwilling to pay for them and the other group is unable to pay for them."
Over the past six years, Republicans have succeeded in de-linking taxes from the public services and social programs they pay for. It is the job of Democrats, particularly the presidential candidates who will have the largest platform, to re-establish that connection in voters' minds. John Edwards has the right idea on this score. He has proposed a fairly ambitious universal healthcare plan and says he'll push to raise taxes in order to help pay for it. "We're asking everybody to share in the responsibility of making healthcare work in this country," he says.
Hayes doesn't mention PAYGO in this piece, and I'd imagine that's because most people think that PAYGO rules are either the conceptual opposite of or a procedural obstacle to "tax and spend" policies. I don't think that's true. PAYGO and deficit reduction are not synonymous. In fact, Hayes is suggesting that new spending proposals abide by the PAYGO principle- that is, you have to increase taxes when you create large mandatory spending programs.
PAYGO also makes the connection between taxes and services- that taxes do indeed pay for something that people want. I sometimes wonder if this really is a problem. I mean, where's the evidence that people don't understand what taxes do? But it seems beyond question that raising taxes to pay for programs that make a visible difference in ordinary people's lives could very well be a political winner. It's also responsible policymaking.
Posted by Matt Lewis
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