If you are a political junkie or policy wonk, there is no shortage of issues to follow. There are only a few I care about: healthcare, taxes/spending and climate change are at the top of my list.
I wrote about my thoughts on healthcare a while ago, here are some comments on the other two issues.
Taxes/spending – most solutions to the problem of how to raise more revenue to pay for all the spending going on right now involve taxing the most affluent. Nothing wrong with that theory to a point but the problem is where to draw the line on who is “affluent” and how much you can reasonably raise from that group. According to the Tax Foundation, in 2005, the top 5% of US taxpayers (those with income above $145,000) paid 60% of personal income taxes and the bottom 50% paid only 3% of personal income taxes. How much more can the top 5% pay and how do you incent those at the bottom to vote for those who might hold down spending?
I recently read this take on what happens if you keep raising the state income tax rate on top earners. And while it is certainly easier for the affluent to move among US states than it is to avoid US taxes by moving abroad, one wonders about the impact. There is certainly no shortage of data that demonstrates cutting tax rates stimulates the economy.
Climate Change – One of the frustrations I have with issues like this is that no one seems to be willing to discuss trade-offs in spending. A think tank based in Denmark called the Copenhagen Consensus that brings together economists and specialists and uses sound economic science to suggest priorities in how governments and philanthropies should spend scarce resources, prioritized 30 solutions to 10 challenges. Spending on climate change mitigation ranked 29th and 30th on the list. And just at the time when Congress is getting ready to pass a huge climate change bill that will raise the cost of energy for Americans and US businesses, the “consensus” on the “fact” of climate change seems to be collapsing. Ouch.