Can We Close the Deficit By Just Raising Taxes?
Megan McArdle argues that closing the deficit with taxes alone would mean an increase in everyone’s taxes by about one third. Kevin Drum points out that this isn’t actually a huge amount:
Page 65 of this CBO document provides estimates for how much income tax various people pay. The median family gets dinged for 3% of its income. A one-third increase means their income taxes would go up by….1% of their income. That’s not so much.
How about a family with twice the median income? That is, someone who’s pretty well off. They pay 13% of their income. A one-third increase means their taxes would go by 4% of their income. Again, this is far from catastrophic, especially since we’re talking about an increase phasing in over the course of many years.
Two points.
1) 1% of your income isn’t a ton, but tax increases (or cuts) certainly never break down evenly across the
The Barbell Economy
Via Reihan Salam, this piece in Slate by Annie Lowrey touches on the notion of an emerging ’service-class’ – Idiscussed this a bit yesterday. She writes:
Despite the gains and the rebounds and the upticks, though, it all adds up to a fairly bleak picture: The jobs we’re adding, for the most part, aren’t great ones. The National Employment Law Project took a closer look at employment and jobs-growth data in February. What it found wasn’t encouraging. The advocacy group says that just 14 percent of recent job growth comes from high-wage industries. About half comes from low-wage industries. According to NELP’s report, restaurants and food services businesses, “especially” fast food outlets, comprised 7 percent of hiring. And most gigs, NELP found, came “from rapid hiring by the temp industry,” meaning the
