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Saturday, March 02, 2013

Is This a Battle of Philosophy?

One more quick one, then I'd better hit the road: Dean Baker explains how you can tell if Republicans (a) are philosophically inclined toward a smaller government, or (b) rent-seekers on behalf of the wealthier members of society:

The Philosopher Politicians Reappear at the New York Times, by Dean Baker: ..."At bottom, it is the oldest philosophic battle of the American party system — pitting Democrats’ desire to use government to cushion market outcomes and equalize opportunity against Republicans’ desire to limit government and maximize individual liberty."
Really, this is a battle of philosophy?
Let's try an alternative explanation. Let's assume that Republicans answer to rich people who don't want to pay a dime more in taxes and would actually prefer to pay many dimes less. Let's imagine that these people are not stupid and that they understand completely what conservative economists like Greg Mankiw, Martin Feldstein and Alan Greenspan have been telling them for years, tax expenditures are a form of spending. In other words, if we give someone a housing subsidy of $5,000 a year by cutting their taxes by this amount if they buy a home, it is the same thing as if the government sends them a check that says "housing subsidy."
If we take the philosophy view of this debate then Republicans would be all for eliminating the tax expenditures that mostly go to line the pockets of rich people. On the other hand, if we think this is a debate about whose pockets get lined then Republicans who are opposed to spending would be opposed to eliminating tax expenditures for rich people. ...

    Posted by on Saturday, March 2, 2013 at 10:08 AM in Economics, Income Distribution, Politics, Taxes | Permalink  Comments (62)

          


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