Monday, November 28, 2011

Paul Krugman won't tax your imagination

But he does have a pair of targets for reasonable taxation that would do much to decrease the deficit and restore the economy.
How about making increased revenue an important part of the deal?

And I don’t just mean a return to Clinton-era tax rates. Why should 1990s taxes be considered the outer limit of revenue collection? Think about it: The long-run budget outlook has darkened, which means that some hard choices must be made. Why should those choices only involve spending cuts? Why not also push some taxes above their levels in the 1990s?

Let me suggest two areas in which it would make a lot of sense to raise taxes in earnest, not just return them to pre-Bush levels: taxes on very high incomes and taxes on financial transactions.
And because he knows there is no value in taxing your imagination, he explains clearly how these propositions will work. Reality can be a comfort.

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