A different kind of budget

It's no secret that I'm a fan of Paul Krugman, so naturally I read his piece in the NYTimes about raising taxes yesterday.  Normally I agree with Krugman, and I agree with most of what he had to say yesterday.  In Paul Ryan fantasy world, we can eliminate the deficit without raising taxes.  And in the World of Warcraft, dragons fight ogres.

In reality, that just doesn't work.  Our tax code needs an overhaul.  Somehow I paid the federal government $400 in extra taxes last month while GE paid $0...at least the government needs the money.  It's almost like a charitable donation.  I'm ok giving money to charity.  Under the Paul Ryan plan, my tax money would be used to give tax breaks to millionaires.  I'm not ok with that.

So all sensible people know that in order to fix our budget issues we will have to raise taxes, but how much?  After all, taxes that are too high can stifle investment and innovation.  While Paul Ryan's plan represents a poor extreme as far as budget proposals go, there is another poor extreme on the other side of the spectrum, the tax too much extreme.

In his piece yesterday, Krugman trumpets the People's Budget put forward by the Congressional Progressive Caucus.  I took a look at the People's Budget and there is a lot to like.  It applies real solutions to the problems of the deficit rather than shifting costs to consumers by dismantling coverage.

But if Paul Ryan's plan is tax-free, the People's Budget struck me as a bit too tax heavy.  It's a much better proposal than Ryan's, which - despite some good ideas - is a very poor plan.  And while the People's Budget leaves in place systems and programs that benefit millions of Americans, it still increases taxes too much for me.

Which leads me to this: Republicans love tax cuts, especially for rich.  They justify tax cuts with the theory of trickle down economics, a theory which has been proven not to work.  I've said it before and I'll say it again, the Republican vision of the future is the past.  Yet there is something to be said for the Republican idea of confidence.  That is, if the government had given me $1200 or even $400 in my tax returns instead of taking an additional $400 from me, I would have been a good patriotic consumer and spent or invested that money. Paradoxically, what Republicans don't get is that confidence extends to more than just tax cuts.  For example, if I have health insurance, I'll feel comfortable spending money instead of fretting about what happens if I become ill.

So what I don't understand is how Republicans understand that tax breaks create confidence and allow people to spend and invest but don't get that having other safety nets in place does the same thing. Meanwhile Democrats understand that safety nets bolster society as a whole but don't seem to get that unreasonable taxation stifles investment and innovation.  This strikes me as strange.

So what I'm hoping for is something in between and I'm now counting on this group of six in the Senate to provide it.  Paul Ryan flopped and the People's Budget - while a good starting point - taxes a bit too much (and far too much for it to be considered politically).  What we need is a different kind of budget, a bipartisan kind of budget.  One that will acknowledge the need for tax hikes while also realizing that we have to make smart and difficult decisions about spending cuts.  It needs to address Social Security and Medicare without ending those programs and it needs to take into account how to trim defense spending while protecting America's national security.  This is all very possible and the fact that there exists a bipartisan group of Senators working on the issue is encouraging.  I hope and I believe that the group of six will present us with something bold and effective.