Since When Is It Nice to Raise Taxes and Cut Benefits?

By James Galbraith

This post is part of our forum on Michael Kinsley's October cover story exploring the legacy of the Baby Boomers and what they owe the country. Follow the debate here.

Mike Kinsley's embrace of Maya MacGuineas tells a lot about what counts as "niceness," to both of them.  It's not the consequences of their proposals.

I take a different view.  To me, it's brutally unfair to suggest that the estate tax go lightly on big fortunes while cutting into lower-middle-class homes and small businesses.  And this is what Kinsley's suggestion amounts to.

Likewise Maya MacGuineas's suggestion that Social Security and Medicare be means-tested: it's both politically and socially nasty.  Politically, because without universality the programs quickly become tarred as welfare. Socially, because once that happens, they'll be cut, elderly poverty will rise and the old will lose access to health care.

MacGuineas writes that the Boomers "were in charge for much of the period when Social Security and Medicare surpluses were used to finance the rest of government."   The accurate way to state this point, would be this: "Since 1983 all  working Americans paid far more in payroll taxes than current beneficiaries required, while taxes were cut for the wealthy."  I cannot see why this is an argument for cutting Social Security and Medicare for those same working Americans, now about to retire.

The simple, effective way to do what MacGuineas claims to want is to enact more progressive taxes on income, capital gains and estates. That way, people with more money pay more. Maya, why not do it this way? Given the premise of your piece, you can't very well argue that it's unrealistic.

And my tone is counterproductive?  Frankly, I hoped my comment about "intellectual laziness" would  sting, and I'm glad  it did.  It was directed at a brazen distortion of a very basic fact: most older Americans are not nearly as rich as Kinsley made them out to be.

The debate continues here.
Can the Boomers Save America?

This article available online at:

http://www.theatlantic.com/business/archive/2010/09/since-when-is-it-nice-to-raise-taxes-and-cut-benefits/63511/