In his latest Newsweek column, Fareed Zakaria asserts:
The simple fact is this: all the Bush tax cuts were unaffordable.
Given this premise, the headline of Zakaria?s piece offers an alternative: ?Raise My Taxes, Mr. President!? He offers this solution, despite his article?s concluding paragraph:
I don?t like our current tax system. It?s unwieldy, taxes the wrong things (income instead of consumption), and is filled with loopholes that are legalized corruption. But we are not going to create the perfect tax code today. We have in front of us a simple, easy way to bring America?s fiscal house in order, reduce our dependence on foreign borrowing, restore U.S. credibility and power, and give us a stable revenue base from which to make key investments for future growth. All we need is for Congress to do what it does so well?nothing.
While Zakaria touches on some of the key items that ought to be addressed to accomplish real tax reform, he approaches the ?affordability? issue from the wrong perspective.
The American people cannot afford their government. Allowing the Bush tax cuts to expire ? Zakaria?s ?do-nothing? solution ? would not address that problem. That option simply would discourage the types of activity ? work, saving, and investment ? that make the economy grow. Slower growth means less money available to pay for that government spending Zakaria likes so much.
