Politics

Created 11/2/1998
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Trying to Talk About Tax Policy

J. Bradford DeLong
November 2, 1998

http://www.j-bradford-delong.net
delong@econ.berkeley.edu


MATT FONG TAX PROPOSAL: EFFECT ON NON-ELDERLY MARRIED COUPLES (20%) MAKING LESS THAN $28,000 A YEAR (FEI CONCEPT): AVERAGE TAX INCREASE OF $1,930

About a week before the election of 1998--thanks to the whispers of Washington economist Max Sawicky in the Corridors of Power--I went down to the residential neigborhood of Glen Park in the southern half of San Francisco to help argue that the voters of California should return Barbara Boxer to the U.S. Senate rather than Matt Fong. I went to what I was told was a "typical San Francisco middle-class house," to be part of a Barbara Boxer campaign event: an attack on Matthew Fong's flat tax proposals.

MATT FONG TAX PROPOSAL: EFFECT ON NON-ELDERLY MARRIED COUPLES (20%) MAKING BETWEEN $28,000 AND $49,000 A YEAR (FEI CONCEPT): AVERAGE TAX INCREASE OF $1,140

About ten aides, ten photographers, ten reporters, Senator Boxer, former Senator Bradley, California Comptroller Connell, a stray Fong aide, and me converge on this typical middle-class house--costing perhaps $300,000. It is located two blocks from each of two freeways, and hard to find because the freeways tend to carry you past it.

We are introduced to the charming preschool daughters. We are introduced to the intelligent, enthusiastic, politically-aware and politically-active homeowners. He's a lawyer, she's a psychotherapist. They're good people: I wish more Americans thought as much about politics and what a good society looks like as they have.

They've lived in the house for six years. "Since when are households where both partners have post-graduate degrees middle-class?" "Brad, the middle-class is anyone making less than $200,000 a year. In American politics, anyone who makes less than $100,000 a year is a working family."

MATT FONG TAX PROPOSAL: EFFECT ON NON-ELDERLY MARRIED COUPLES (20%) MAKING BETWEEN $49,000 AND $70,000 A YEAR (FEI CONCEPT): AVERAGE TAX INCREASE OF $2,450

Senator Boxer introduces the owners of the hourse we are standing in front of. They say that they are just scraping by given their high mortgage and the high cost of living in San Francisco. "How big is the house?" "I don't know, maybe 1800 square feet." They go on to say that the Fong plan would increase his taxes by $3,000 a year, and that would make it very hard for them to live in San Francisco. "Who's he a lawyer for?" "He's a good guy: a HUD civil rights attorney." "Are these the people whom good tax policy should be trying to redistribute income to?" "It resonates with the news anchors--the key is not to find someone representative of America but someone with whom the reporters and anchors can identify."

MATT FONG TAX PROPOSAL: EFFECT ON NON-ELDERLY MARRIED COUPLES (20%) MAKING BETWEEN $70,000 AND $100,000 A YEAR (FEI CONCEPT): AVERAGE TAX INCREASE OF $3,750

Senator Boxer introduces Senator Bradley. A photographer catches me chewing on my pen. Senator Bradley gives a nicely-polished and eloquent five-minute speech on the Earned Income Tax Credit, on how the Fong tax plan would eliminate it, and how this would be a very bad thing: America's poor need a helping hand, not a slap in the face.

Senator Boxer introduces Comptroller Connell. She says that the Fong plan raises taxes on the middle class. She says that this is not just the conclusion of left-wing think-tanks, but of the professional tax policy staff of California's equivalent of the IRS, the Franchise Tax Board.

MATT FONG TAX PROPOSAL: EFFECT ON NON-ELDERLY MARRIED COUPLES (15%) MAKING BETWEEN $100,000 AND $193,000 A YEAR (FEI CONCEPT): AVERAGE TAX INCREASE OF $3,830

Senator Boxer introduces... me. I say that the Fong tax cannot both reduce taxes on the middle class and do what a flat tax is designed to do--deliver enormous tax reductions for the rich and wipe out the federal government as an engine of income redistribution. I say that anyone who thinks that you can combine a flat tax with a middle-class tax cut thinks that 2+2=5. I say my job as an economist is to tell people that 2+2=4, not 5. That's why it's called the Dismal Science, after all.

MATT FONG TAX PROPOSAL: EFFECT ON NON-ELDERLY MARRIED COUPLES (4%) MAKING BETWEEN $193,000 AND $445,000 A YEAR (FEI CONCEPT): AVERAGE TAX DECREASE OF $10,290

Senator Boxer doesn't introduce anyone. Senator Boxer talks about how she has fought for a strong economy, a low unemployment rate, a high rate of investment and productivity growth, and middle-class tax cuts for those working families who play by the rules. Senator Boxer talks about how Matt Fong seeks massive tax cuts for the rich, and is out of the mainstream of America. I think that Senator Bradley's egalitarian preferences are weaker than Senator Boxer's, but her situation is desperate and she does not believe she can afford any more "Boxer is liberal" stories. Her opponent has more money than she does, and has done a good job of claiming that she is in some ill-defined sense "extreme." By contrast, somehow Matt Fong--with his flat tax to redistribute wealth to the top twentieth of Americans, with his $50,000 donation to people who want to intern the HIV-positive in concentration camps in Nevada--has convinced the San Francisco Chronicle and a lot of other people that he is "mainstream."

MATT FONG TAX PROPOSAL: EFFECT ON NON-ELDERLY MARRIED COUPLES (1%) MAKING MORE THAN $445,000 A YEAR (FEI CONCEPT): AVERAGE TAX DECREASE OF $145,610

Senator Boxer asks for questions. A reporter asks a question about the Reverend Sheldon, Matt Fong's $50,000 donation to the Reverend Sheldon, the Reverend Sheldon's plan to quarantine the HIV-infected, and Matt Fong's signing of a ultimatum presented to him by the Log Cabin Republicans. Senator Boxer answers the question well, and calls for questions about tax policy.

A reporter asks a question about the Reverend Sheldon, Matt Fong's $50,000 donation to the Reverend Sheldon, the Reverend Sheldon's plan to quarantine the HIV-infected, and Matt Fong's signing of a ultimatum presented to him by the Log Cabin Republicans. Senator Boxer answers the question well, and calls for questions about tax policy while she has all these experts here. She praises Senator Bradley, who spent sixteen years on the Senate Finance committee and was the architect of the only true tax code simplification we have had since World War II.

A reporter asks a question about the Reverend Sheldon, Matt Fong's $50,000 donation to the Reverend Sheldon, the Reverend Sheldon's plan to quarantine the HIV-infected, and Matt Fong's signing of a ultimatum presented to him by the Log Cabin Republicans. Senator Boxer answers the question well, and calls for questions about tax policy.

The reporters are silent. Senator Boxer thanks them for coming. The reporters and their photographers start to leave.

What does it say about American politics that the entire media finds proposals to massively shift the distribution of income toward the rich to be... boring? It's not that the corporate multinational masters of the media excise discussions of income distribution from articles. It's not that legions of paid supply-side snake-oil salesmen have brainwashed reporters into believing that every time you cut marginal tax rates you raise tax revenues.

It's just that your average reporter finds talk about who and how much government policy enriches... boring.

"The big things the federal government does are war and peace and taxing and spending," I said to some of the departing reporters, mostly to their backs. "Tax law changes and the shape of the budget are much more important than the Reverend Sheldon. Senators move real money around, and buy real weapons. They only have a tangential effect on how tolerant American society is." "Of course you think tax law changes are important. You're an economist."

Senator Boxer, Senator Bradley, Comptroller Connell, and their aides get in their vans. They start driving from San Francisco to Sacramento. There they will repeat the performance in front of a different group of reporters and photographers.


Professor of Economics J. Bradford DeLong, 601 Evans Hall, #3880
University of California at Berkeley
Berkeley, CA 94720-3880
(510) 643-4027 phone (510) 642-6615 fax
delong@econ.berkeley.edu
http://www.j-bradford-delong.net/

This document: http://www.j-bradford-delong.net/Politics/Fong_why.html

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