by Jonah Shepp
Jared Bernstein argues that we can’t have it both ways:
[T]here are three reliable ways to help or “lift” the bottom: subsidies that increase the poor’s economic security today; investment in their future productivity; and targeted job opportunities at decent wages. The first two are more closely related than you might think, because researchers are discovering that anti-poverty consumption programs such as nutritional and income supports have long-lasting benefits to children in families that receive them. None of these three approaches are free. …. All of the above — the expanded earned-income tax credit, universal preschool, job-creating infrastructure — will take more tax revenue, and much of that new revenue will need to come from those at the top of the wealth scale.
Douthat objects:
1) I don’t think even Bernstein believes that it’s actually impossible to improve the situation of the poor without directly raising taxes on the rich.
What about, to pick two ideas favored by various thinkers on the left and right, a one-two punch of criminal justice reform to reduce incarceration rates and urban upzoning to lower the cost of living and working in wealthy cities? Both would probably improve opportunity for the poor and the lower-middle class; neither would require a higher top marginal tax rate or massive new public outlays. Do these kind of ideas just not count?
2) It’s possible to favor increasing redistribution along something like the lines Bernstein suggests — through an expanded earned income tax credit, for instance — while disagreeing that we need a higher top marginal rate or a Piketty-style wealth tax in order to do it. Given that our existing tax code, like the zoning policies mentioned above, has a heavy pro-rentier and pro-rich bias, why couldn’t we start by cutting or capping existing tax subsidies — for expensive homes, for expensive health insurance, for being a wealthy taxpayer in a high tax state — and put that money to work first? This would involve “new revenue,” in a sense, but you wouldn’t have to raise tax rates (as we already just did) in order to get it, and you would be redistributing unearned, effectively-subsidized riches rather than just hacking away more indiscriminately at the idle and entrepreneurial alike.
The Dish 