Good stuff on the Washington Post op-ed page today. Alan D. Viard, Alex Brill, and Arthur C. Brooks detail the problems in Obama's tax plan:
While a few of Obama's proposals may be sensible, the overall package would be bad for the economy. Unlike rate cuts for high incomes or reductions in investment taxes, most of Obama's proposed tax cuts would do little to reduce the tax penalty on work and saving. For some households, the penalty on work and saving would even increase because the new tax credits would be phased out as income rises. These proposals wouldn't deliver the economic growth that incentive-based tax cuts would. Furthermore, there is no free lunch. Obama's middle-class tax relief would have to be paid for, either now or later. Middle-class tax cuts might make sense if they were paid for by spending cuts, but that is not Obama's plan. Like his opponent, Obama points to vague savings from reducing waste, the kind of savings that never seem to materialize. He also hopes to reap savings by accelerating our redeployment from Iraq, a project with an uncertain fiscal impact. At the same time, he proposes a wave of new spending on health-care, education, energy and infrastructure programs and declares his opposition to reforms that would reduce the growth of Social Security and other entitlement benefits.
And Robert J. Samuelson offers some no-nonsense suggestions for a long-term economic stimulus plan. Here's one of them:
[W]e should increase the earliest age that workers can qualify for Social Security from 62 to 64. This change (again) should be phased in over four years. When people retire early, they take a cut in their Social Security benefits to reflect the fact that they'll receive benefits longer. At 62, benefits now average about 75 percent of benefits at the normal retirement age (today, 66 years). Many retirees later regret that, by starting benefits so early, they crimp their monthly payments. Raising the minimum eligibility age wouldn't save the government much, if any, money on the assumption that the monthly payments at 64 would be higher. Although people would work longer, their retirement would ultimately be made easier by higher monthly benefit checks and by delaying by two years the need to rely on savings. This change would also indicate Congress's willingness to tackle the larger problems of Social Security and Medicare.
Both pieces are tightly argued and well-reasoned. They're sensible, too. And this means, obviously, that absolutely no one in power will listen to them.