Wednesday, June 29, 2011

Some Advice for the GOP

In the current debate over fiscal policy and the debt ceiling, Republicans have drawn a line in the sand: No tax increases.  But I fear they have lost sight of a key issue: As I discussed in this column, the distinction between spending and taxation is often murky and sometimes meaningless.

My advice: Amend your line in the sand to NO INCREASES IN TAX RATES.  Be willing to give up on tax expenditures if we simultaneously make current tax rates permanent--or, better yet, if we lower rates, as the Bowles-Simpson commission suggested.

Addendum: A phase-out of deductions for high-income taxpayers would count as an increase in tax rates, as the Wall Street Journal notes today on its editorial page.