In Defense of Brooks—and Long
So Rob’s not a fan of David Brooks’s latest. It’s easy to understand why. But it’s worth noting that in this section—
If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred million dollars of revenue increases.
A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. It would seize the opportunity to put the country on a sound fiscal footing. It would seize the opportunity to do these things without putting any real crimp in economic growth.
The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary.
—Brooks isn’t necessarily insane. Nor are John McCain and John Cornyn, who, it seems, may be sympathetic to some of Brooks’s argument.
But they’re obviously already getting some stiff opposition from the anti-tax crowd—and not, pace Mr. Long, just from the Tea Party. Brooks may have had in mind people like Grover Norquist and the gang at Americans for Tax Reform—an influential and long-established part of the conservative universe—who’ve called “eliminating tax expenditures” “left wing code for ‘raising taxes.’” Their position paper, if you will, is here.
The thing is that some of these tax expenditures are just bad policy—and small-government conservatives should want to see them eliminated. In the latest issue of National Affairs (yes, shameless employer plug), Donald Marron—former acting CBO director, and head of the Urban-Brookings Tax Policy Center—does a very good job explaining just what tax preferences are; their effect on government; which of them are good and which pernicious; and the role they can (and should) play in budget negotiations and our broader efforts to get our deficits and debt under control.
In the essay, he points out that many of the “tax expenditures” that some on the right want so desperately to keep are really just big-government spending programs in disguise. The tax exemption for state and local bond interest, for example, is basically a federal-government subsidy for local-government spending (often on boondoggles). Marron even mentions “one tax provision … that has as its sole purpose lowering taxes as NASCAR venues.” Others aren’t necessarily big spending programs, but do, as Brooks said, distort economic behavior in sometimes unhealthy ways—like the deduction for home-mortgage interest.
So there is a lot of money to be saved by eliminating some of these preferences (which amount to over $1 trillion a year), or restructuring ones that lead to skewed behavior and more bloated and inefficient government. The question to be asking, then, is which preferences exactly the Democrats propose to eliminate. (Here, Rob has a good point—the Devil’s in the details.) Republicans could make Brooks happy—and signal a cooperativeness to the public—if they said they were willing to look at tax expenditures as part of a broader deal. The challenge would then be holding firm and allowing the elimination only of those preferences that serve conservatives’ ends: making government spend less and do less.
The other big question is about revenue neutrality. If these tax preferences are eliminated, ATR’s concern is justified: government will indeed take in more money (though, as Marron says, not necessarily as much as lawmakers might be inclined to believe). The ultimate aim of eliminating these expenditures should be, as the ATR folks rightly argue, offsetting them with a simpler, fairer tax code that reduces rates on everyone. These two things could go together as part of one massive tax-reform package. But in the current economic and political climate, that seems unlikely. They could also be separated, and one or the other—eliminating spending-like preferences, or lowering tax rates—could go first. But again, in the current climate, a sweeping reduction of tax rates without some offsetting source of revenue seems unlikely.
So why not let the tax expenditures go first? If they’re truly inefficient, big-government spending in disguise, why not allow them to be eliminated now? The question is mostly one of tactics: Is it worth giving up the tax expenditures today to get the massive spending cuts Brooks seems to think are in the stars as part of the debt-ceiling deal? Or should they be saved as a bargaining chip for something even bigger, like a massive all-at-once simplification of the tax code? There’s good reason to believe that if Republicans give in on the tax expenditures now, Democrats won’t ever let them have a massive tax-reform deal that reduces rates. And if Republicans cave on this point, and the Democrats renege, the result will be the significant tax hikes that ATR fears. What GOP lawmakers need to decide, really, is whether that's a risk they're willing to take. Do they want to close these “loopholes” as part of a spending deal today, or part of a tax deal that may or may not materialize tomorrow? It’s a tough question to answer.
The Republicans’ conundrum, then, seems mostly to be a strategic one—not a moral one. And it's hardly a "no-brainer," as Brooks seems to suggest. So Rob is right to be miffed at Brooks’s accusations of moral deficiency. But Brooks is right that Republicans should allow themselves more room to maneuver on this issue—precisely because their next steps aren't as obvious as he would have us believe.
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Jul '10
Re: In Defense of Brooks—and Long
I really, really dislike the term "tax expenditures".
First, it's illogical: government cannot expend money it has not collected.
Second, it's an evil trope of the Left: the idea that all money rightly belongs to government and that forbearance in confiscating every last nickel is somehow equivalent to munificence on the part of our masters.
Edited on July 5, 2011 at 9:11pmSep '10
Re: In Defense of Brooks—and Long
There is no doubt that some tax breaks are bogus ways for pols to pay off interest groups without writing the check out of the federal budget, however, eliminating the tax exemption on municipal bonds strikes me as a pretty bad example. Boondogles do get financed but far more often they are schools, water treatment plants, bridges etc and the financing is done at a more local and therefore more accountable level. This has been a very important souce of finance and investment in our country for at least a century and it doesn't rely strictly on progressivity in the tax code, which I'm opposed to. This market has become fractured because of the banking crisis and the build america bonds were a way of federalizeing the whole thing which I also think it a far worse alternative. As you say, the devil is in the details.
Sep '10
Re: In Defense of Brooks—and Long
I was under the impression that the Paul Ryan budget included broad based tax reform (i.e. reduce rates and eliminate deductions). Is this not the case?
Re: In Defense of Brooks—and Long
I agree, Meghan. I'm for a fairer, flatter tax across the board. I hate these special tax breaks, which are almost always boondoggles fixed up by lobbyists. I'd be thrilled with a tax reform package that simplifies everything. A simpler tax system means a lot less power in Washington. A good thing.
But like most taxpayers, I'm deeply mistrustful of government to actually make the cuts. It's sort of like the immigration debate -- before we start talking about amnesty, let's secure the borders. Because the last time we got it backwards: amnesty, and then no border control.
It's like this: let's get the biggest, deepest, most trustworthy cuts we can now. And then let's talk about taxes.
It's not the taxpayer's fault -- despite what Brooks says in the NYTimes -- that there's zero trust between them and Congress. When someone betrays you again and again, it's up to them to regain that trust. That doesn't make the Tea Party a bunch of fanatics. It makes them students of history.
Sep '10
Re: In Defense of Brooks—and Long
Kenneth: I really, really dislike the term "tax expenditures".... it's an evil trope of the Left: the idea that all money rightly belongs to government and that forbearance in confiscating every last nickel is somehow equivalent to munificence on the part of our masters. · Jul 5 at 12:10pm
Edited on Jul 05 at 12:11 pm
I wholeheartedly agree. On NPR, I've heard some bien pensant commentators ask, "But can we afford these tax breaks?" As if all money belongs to the government first, and it is only the generosity of the State that allows us to have any.
As I said on one of Dave Carter's posts, we must not only defeat the President and his party: we must discredit and defeat this evil idea, or we have not really won anything except a temporary halt in a long retreat.
May '10
Re: In Defense of Brooks—and Long
Republicans would be fools to accept any promise of future action as trustworthy. If there is to be any exchange of interests, every element of that exchange must be present in the same bill.
That doesn't just mean rejecting, "We will approve your bill if you approve ours." It also means accepting no plans which do not go into effect until 2015 or 2020. If it can be prevented by future legislation, then it's little more than a nice idea now.
I have no problem with closing tax exemptions. Our tax code should be simplified, gradually if necessary.
But under no circumstances should raising the debt ceiling be on the table. Doing so would suggest that America is not already to the point at which further borrowing is irresponsible. More than that, it would seem to legitimize the preposterous idea that our government can indeed loan money to itself. No more loans. It's time to pay the piper.
Edited on July 5, 2011 at 10:27pmMay '10
Re: In Defense of Brooks—and Long
I'm not a fan of Brooks's earliest, much less his latest. Started badly, sort of sagged in the middle, and the less said about the end the better. This is why I'm so glad Jen Rubin is at the Washington Post now.
You can't leave wiggle room with Obama. His course is set. The nation's future is in dire peril, he has decided he simply doesn't care, and the debt ceiling really shouldn't be raised at all, precisely because that's the only way to reassure our creditors we won't default.
But if we must, insist on serious cuts as the price. And if tax loopholes that were part of the Stimulus are to be closed, insist the remaining Stimulus funds be unspent, and for God's sake dump that ridiculous high-speed rail Winning the Future stuff. There's no constituency for it; should be easy.
To Mr Brooks's point that the GOP is incapable of governing, we aren't governing. We control one house of Congress. The best we can do is try to stave off calamity.
May '11
Re: In Defense of Brooks—and Long
Call me a pessimist but I fear this is going to end badly. Obama is not going to default on our debt, but he is going to close government offices, postpone Medicare payments and withhold payments to Social Security and the military and blame it on Republicans.
Dec '10
Re: In Defense of Brooks—and Long
So what then, is the solution? Buckle? Give them what they want because otherwise they'll do bad things and blame us?
Why do we not do the same to them? Maybe torch a few orphanages (we still have those, right?) and leave a "Yes We CAN" button on the doorstep as a calling card?
When they say we did all these bad things, call them the liars they are and go on with your day.
We cannot allow ourselves to be blackmailed with the threat of lies and slander.
Hell, they're going to tell those lies and make those slanders if we buckle too. We might as well secure something for our trouble.
May '10
Re: In Defense of Brooks—and Long
It really is a "damned if you do, damned if you don't" scenario for Republicans, unfortunately. Republicans can accept an unjust compromise and lose the votes of core Republican voters, or they can stand by principle and lose the votes of mindless swing voters as Democrats blame their misdeeds on us.
I respect the need for prudence. But, when in doubt, a principled stand seems the better course.
This is why Republicans need a bold and charismatic speaker either as the Presidential candidate or the VP candidate. Lt. Col. Allen West would make a strong VP candidate. The media would have trouble ignoring him.
Oct '10
Re: In Defense of Brooks—and Long
Isn't trusting the Democrats at spending cuts akin to trusting the (former) Soviets at treaty time? I have no use and no regard for a man (Brooks) who apparently ignores the past while having the gall to advise what the future should be.
Rob said it best: "When someone betrays you again and again, it's up to them to regain that trust."
Not a plug nickel of tax increases until we see $4 trillion in enacted spending cuts. Then, and only then...still not a plug nickel of tax increases.
Edited on July 5, 2011 at 11:59pmSep '10
Re: In Defense of Brooks—and Long
Thems a lotta words to defend Brooks. Can't the man defend hisself? Why should yer first post at Ricochet be about defending David Brooks after his despicable attack on those of us who are done...I mean DONE, with the way Democrats spend, negotiate in bad faith, and wage brazen class warfare?
To quote George Harrison.... Are you one of them?
Re: In Defense of Brooks—and Long
For the record, I don't trust the Democrats either. (Though I'm can't say I'm super-optimistic about Republicans; they've also committed their fair share of betrayals.) So if I were in the position of making this tactical call, I wouldn't give in to the Dems on tax preferences just now. Doesn't seem like anyone else around here would, either.
But the point is that it is a strategic decision on the GOP's part--not a moral one--and it should be a strategic consideration on the part of the Tea Party and anti-tax advocates as well. To respond to Rob's point, I'm not saying they're "fanatics" for resisting. What I'm trying to argue--obviously unclearly--is that as a tactical move, the small-government side would be wise not to reflexively dismiss all eliminations of tax expenditures as non-starters, but to recognize and acknowledge--as a matter of policy and rhetoric--that some should in fact be scuttled. (Marron explains which, and why.) That moves the discussion to the point that's really at issue: the right time and circumstances for the scuttling.
Re: In Defense of Brooks—and Long
Incidentally, "tax expenditures"--the "evil trope of the left"--is simply the technical term for these preferences/loopholes/whatever you want to call them, a phrase set down in the Congressional Budget Act of 1974 and still used by policymakers today. According to Marron, the point in the initial legislation was to acknowledge that many of these provisions are in fact akin to government spending programs--an acknowledgment that limited-government types should welcome, not resist... no?
Jul '10
Re: In Defense of Brooks—and Long
It's government Orwellian speak, plain and simple.
Aug '10
Re: In Defense of Brooks—and Long
Brooks asks the Republicans to give in first, it is his main idea - reminiscent of the famous line from Animal House, "You... you trusted us!" (which would, sadly, violate the Ricochet CoC if reprinted in full here).
So here is my idea - Hey David B. what if we demand that Dems go first and just "trust us"- then Repubs would be on the side of , ...of, ...whatever violation of the Ricochet CoC that I didn't mention in the previous 'graph. How about that Dave? (and he thinks we don't revere "...the legitimacy of scholars and intellectual authorities.")
On a more serious note, the simple axiom that if you tax something, you get less of it - is actually quite true. If we want a country that values saving, we shouldn't tax savings. If we desire more 'investment' we shouldn't tax the proceeds.
The economy remains in its current asthmatic condition for one reason and one reason only, 'regime uncertainty' - we don't know what the cost of the next worker is, or the value of our next 'investment'. We solve that problem the economy gets better (David B. that is the advice of this scholar- revere it.)
Edited on July 6, 2011 at 1:46amRe: In Defense of Brooks—and Long
Franco,
I too riled some people up with some positive words for Brooks last week. While I regularly find him insightful, he quite often gets there on the way to a totally objectionable conclusion. Still, we shouldn't object to the 30 percent of the time he's right because of the 70 percent of the time he isn't.
All that being said, Ms. Clyne deserves the benefit of your continued readership. "One of them"? 'They' should be so lucky.
Franco: Thems a lotta words to defend Brooks. Can't the man defend hisself? Why should yer first post at Ricochet be about defending David Brooks after his despicable attack on those of us who are done...I mean DONE, with the way Democrats spend, negotiate in bad faith, and wage brazen class warfare?
To quote George Harrison.... Are you one of them? · Jul 5 at 3:30pm
Sep '10
Re: In Defense of Brooks—and Long
Still, we shouldn't object to the 30 percent of the time he's right because of the 70 percent of the time he isn't.
That reminds me of the old joke about the statistician who said that, on average, he's still alive.
Sep '10
Re: In Defense of Brooks—and Long
Incidentally, "tax expenditures"--the "evil trope of the left"-
That's the bafflegab created in the 1970's (what poetic justice) to make it appear that its the government's money first, and yours second. From there, they then effortlessly slide into "structural spending" to justify the stuff they cannot cut which eventually approaches 100% of the budget. I live in Canada, so I've been exposed to this insanity longer than most of my American friends.
You must never, never, never, ever buy into the ludicrous phrasing "tax expenditure" -- which is an Orwellian term on par with "therapeutic abortion". Once you grant the premise, you must suffer the conclusion.
As Ezra Levant and Mark Steyn like to say: Fire. Them. All.
Sep '10
Re: In Defense of Brooks—and Long
Troy Senik: Franco,
While I regularly find him insightful, he quite often gets there on the way to a totally objectionable conclusion. Still, we shouldn't object to the 30 percent of the time he's right because of the 70 percent of the time he isn't.
All that being said, Ms. Clyne deserves the benefit of your continued readership. "One of them"? 'They' should be so lucky.
To me, when someone carries water for the left - and in this case it is quite clear Brooks is advancing the socialist meme that the government is being generous to me by not taking all my money, whatever else he says is lost on me, sorry.
There are two reasons for this. First, it makes me suspect his agenda (outside of the fact he is the NYTimes pet chimp), and second because he is not introducing a new thought or idea.
As others have noted, this is not a new situation or a new argument.
As to Ms. Clyne, obviously she is an accomplished person of substance - I question why she starts out defending such a despicable piece.