What 'Tax the Rich' Gets You

Mike at the Big Stick points to a blog post by Iowahawk on the fallacy that taxing only the rich will solve anything. It's pretty tounge-in-cheek but the point is made: raising taxes soley on upper incomes won't solve our fiscal problems. Mike says it best:

The point is that while the rich are a convenient target for the Left it’s a fantasy to believe that raising taxes on them will create financial solvency. What is necessary, in my opinion, is raising taxes on all but the poorest Americans and cutting spending deeply. Anything else is pointless.

Indeed. Much has been said about the conservative fantasy that all fiscal problems can be solved by cutting the budget. But it is equally silly to think that "the rich can pay for it all."

There is saying that Americans want Swedish-style government at Mississippi-style prices. If we want to make sure that government is well funded and sustainable, then both sides will have to give up their fantasies and come up with some mixture of spending cuts and increased taxes accross the board. Anything else is a pipe dream.

In Search of a Grand Bargain

In my most recent post, I got some pushback from one person who really doesn't agree with my viewpoint. In some ways we were talking past each other, with our own views of the other person instead of listening to the other person. As David Brooks reminds me in his latest column on the budget, the current partisan climate doesn't really allow folks to get to know each other and at the very least understand each other. Maybe if they had lunch, things would be better. Here's what Brooks says:

President Obama and Paul Ryan are two of the smartest, most admirable and most genial men in Washington. It is sad, although not strange, that in today’s Washington they have never had a serious private conversation. The president has never invited Ryan over even for lunch.

As a result, both men are misinformed about the other, and both have developed a cold contempt for the other’s position. Obama believes Ryan wants to take America back to what he sees as the savage capitalism of the 1920s (or even the 1760s). Ryan believes Obama wants to turn America into a declining European welfare state.

If they met, would they resolve their differences? No, but they would understand them better.

About a month ago, Newsweek ran an article about the loss of the party culture in Washington where folks of differing political persuasions got together. Decades ago, most legislators and their families lived in DC and did things together. It was the days of martinis and smoke-filled rooms. It was in this environment that things got done because you trusted the other guy. You might not agree with him (and most likely back then it was a "him"), but you thought he was a good guy because you spent time with him.

But Washington isn't like that anymore and neither is the rest of the country. We are increasingly growing apart, and that seperateness breeds distrust. If this were 1965, Paul Ryan and Barack Obama would sit down at the White House, smoke some cigars, have a few drinks and maybe at the end hammer out a deal on the budget. Neither side would get all of what it wanted, but they would learn how to find some kind of consensus, a Grand Bargain.

But since this is 2011 and not 1965, we have Ryan and Obama looking at the other with distrust and a bit of contempt. The same goes for me and the commenter. So we design legislation and ideas that in Brooks' words, pretend that the other political party doesn't exist.

If I can add another thing wrong with Ryan budget is that it was written as if Democrats didn't exist. But the thing is, they do and they won't stand for a plan that they think will hurt the poor and let the rich get off. Conversely, the Obama plan pretends Republicans don't exist. But Republicans do exist and they won't stand for a plan that they don't see tackling entitlements.

In a democracy we have to realize that there are others that don't share our views. The trick of a democratic society is how to reasonably work out a deal between competing interests. In the end, this means compromise. That can't happen if you don't trust the other side.

The plans released by Ryan and Obama could have been starting points to reach a workable budget deal. But what both ideas will become are platforms for the 2012 election season, platforms to beat up the other side.

I want to see some kind of compromise reached. But I also would like to see Democrats and Republicans just meet for lunch sometime, away from the cameras. Maybe if they shared a meal, things could get done.