By Tax Hikes Alone? Ctd

Apr 22 2011 @ 9:45am

TaxesGPD

Kevin Drum thinks raising taxes by a third won't pinch American pocketbooks significantly. Megan McArdle goes another round:

In order to raise taxes to the 25% of GDP that Kevin wants, all taxes need to rise by at least a third, not just income taxes: excise taxes, corporate income taxes, payroll taxes. … [F]or the poorest 20% of Americans (who make less than $20,000 a year, with an average income of $11,500), taxes go from about $660 to about $1320.  For the middle quintile (making an average of $50,000 a year), taxes go from around $7,000 to over $12,000.  For those in the top quintile, with an average income of $167,000, taxes jump from a $41,000 to $62,000.  

That's what I thought Megan meant. I'm sorry if I may have confused Kevin. For my part, leaving aside the debate on spending, I favor revenue-positive tax reform, and a phased-in gas tax directly apportioned to defense spending. If we are to sustain an empire, can we please pay for it? And isn't taxing gas the most effective way to move away from the carbon economy that requires us to remain a global hegemon?