Tuesday, March 21, 2006

Wonking Sullivan

Where we first came in we had Andrew Sullivan claiming that he was for Bush tax cuts but that he wanted spending cuts to match them:

So let's recap: I'm in favor of Bush's tax cuts, but want spending cuts to match them; I favor balanced budgets... I want more money for defense, specifically more troops...

Now we find out that he in fact supports a bunch of big tax increases (and rolling back one of Bush's tax cuts).

Kevin Drum has challenged me to detail how I'd balance budgets while keeping Bush's tax cuts. (A small clarification: I'd keep the estate tax as it once was; and I'd add a buck to the gas tax pronto.) I'd prefer experts like Brian Riedl or Veronique de Rugy to propose detailed cuts. But my back-of-the-envelope wish-list is that I'd repeal the Medicare drug entitlement, abolish ear-marks, institute a line-item veto, pass a balanced budget amendment, means-test social security benefits, index them to prices rather than wages, extend the retirement age to 72 (and have it regularly extended as life-spans lengthen), abolish agricultural subsidies, end corporate welfare, legalize marijuana and tax it, and eliminate all tax loopholes and deductions, including the mortgage deduction, (I'd keep the charitable deduction). For good measure, I'd get rid of the NEA and the Education Department.

Let's try to separate the things which are tax increases and those which are spending cuts.

Tax increases:
Repeal estate tax cut
A dollar a gallon gas tax increase
Eliminating all tax loopholes (?) and deductions except the charitable deduction.

Spending cuts:
Repealing Medicare drug plan.
Abolish agricultural subsidies.
Eliminate NEA and Department of Education.

The rest are policies which don't do anything in and of themselves (balanced budget amendment, line item veto, earmarks), in the realm of fantasyland (taxing marijuana), too ambiguous to really address directly ("corporate welfare"), or do nothing for the health of the budget generally unless you support raiding payroll taxes (social security benefit cuts).

Let's start with the spending cuts. All these numbers are going to be ballpark. Eliminating the NEA will save about $120 million. Eliminating the Department of Education will get you $56 billion and make a lot of state and local governments very angry. Farm subsidies will get you about $25 billion and throw the Senate to which ever party opposes the cuts. Killing Medicare D will save you about $65 billion. So, total roughly $145 billion in spending cuts.

Now for the tax increases. A buck gallon gas tax increases taxes by about $100 billion. No estate tax repeal (bring it back to where it was) increases taxes by $25 billion. Ending the mortgage deduction alone increases taxes by about $75 billion. I'll not worry about the other deductions.

So, Sullivan does come close to getting rid of the federal deficit by reducing spending about $145 billion and by increasing taxes by about $200 billion, mostly with regressive taxes hitting the poor (gas taxes) and middle class (gas tax & mortgage deduction), although he also wants to increase military spending so we'll have to pay for that somehow.

My dream is that Republicans propose these things, so Democrats can rule for all eternity.

Repeating, all these numbers are ballpark and shouldn't be cited with any authority...(and if anyone notices a number that's grossly off let me know).