Many thanks to Maya MacGuineas for her contribution to this discussion, which I almost completely agree with. In fact, she goes a bit further than I would--for example, in her desire for thorough means testing of Social Security and Medicare. I would say either my suggestions (such as claiming some of the money back when a recipient dies) or means testing--but not both.
A brief reply to Jamie Galbraith's reply to my reply to his reply to my piece. I asked: if deficits don't matter, why have taxes at all? He says the purpose of taxes is not to collect revenue to pay for government, but to allow for counter-cyclical spending (and non-spending) for Keynesian purposes. Furthermore, he says the purpose (to him) of the estate tax is not to raise money or even to temper large disparities in wealth, but to encourage charitable contributions because they are deductible. And he says the estate tax performs this function brilliantly.
Perhaps I phrased my question badly. I was not asking whether taxes had some purpose other than paying for the government. I was asking whether Jamie believed the government could function without collecting any taxes and financing its entire budget through borrowing. As for the estate tax, it is not performing brilliantly at the moment, since at the moment it doesn't exist. But I wonder why Galbraith is so hostile to the notion of applying the estate tax to more than just a tiny number of extremely wealthy people, so that it would bring in some serious revenue AND have the effect he wants on more than just those few.
Actually, I don't wonder all that much. Let's call it quits, Jamie, and thanks for participating.
The debate continues here.
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