One Utah

Good article on the economy from Joseph Stiglitz.

The money quote (no pun intended):

Our tax policies need to be changed. There is something deeply peculiar about having rich individuals who make their money speculating on real estate or stocks paying lower taxes than middle-class Americans, whose income is derived from wages and salaries; something peculiar and indeed offensive about having those whose income is derived from inherited stocks paying lower taxes than those who put in a 50-hour workweek. Skewing the tax rates in the other direction would provide better incentives where they count and would more effectively stimulate the economy, with more revenues and lower deficits . . . {snip}

In addition, this is not the time to turn to the old-time fiscal religion. Confidence in the economy won’t be restored as long as growth is low, and growth will be low if investment is anemic, consumption weak, and public spending on the wane. Under these circumstances, to mindlessly cut taxes or reduce government expenditures would be folly.{snip}

What has happened to the American economy was avoidable. It was not just that those who were entrusted to maintain the economy’s safety and soundness failed to do their job. There were also many who benefited handsomely by ensuring that what needed to be done did not get done. Now we face a choice: whether to let our response to the nation’s woes be shaped by those who got us here, or to seize the opportunity for fundamental reforms, striking a new balance between the market and government.

This morning on MSNBC, I watched as some idiot commentator kept claiming we need to cut taxes, cut taxes, cut taxes to get out of this mess. The conceit that taxes are the problem needs to be addressed right now:

We’ve cut taxes - our effective tax rate on corporations is one of the lowest in the world. We’ve cut taxes on the wealthy. And it hasn’t worked. Our economy is crashing around us and the rich and super rich are demanding that the government to which they resented paying taxes now bail them and their country club friends out of the fine mess they’ve gotten themselves into.

Focusing on taxes - constantly lowering taxes and worrying over taxes - helped sow the bitter harvest we’re now reaping. The problem - contrary to conservative free market fundamentalists - isn’t that taxes are inherently burdensome. The problem is using those taxes wisely; wars in Iraq, no bid contracts for cronies and massive bailouts without strings attached are bad uses of tax dollars. A wise use of tax dollars includes investments in infrastructure, education, technology, the creation of a sane, social safety net.

Paying taxes - contra Sarah Palin - is patriotic. It’s the job of our leaders to see to it that the system is fair. Our current approach of providing massive tax cuts for the wealthy, creating a tax system that favors the wealthy, has to change.

This entry was posted Friday, October 10th, 2008 at 3:10 pm and is filed under Economy. You can leave a response, or trackback from your own site.