With congressional Democrats divided on how to approach the soon-expiring Bush tax cuts, reliably liberal Newsweek has taken upon itself the task of defending tax hikes, particularly those on the "rich."
In back-to-back posts today, Ben Adler sought to dismiss the stimulative effect of tax cuts while Nancy Cook profiled some rich liberals who are allegedly looking forward to their taxes going up. [click image above for full-size screen cap]
"Republicans, moderate Democrats, and even members of President Obama’s economic advisory board say raising taxes on the rich will slow the economic recovery," Adler noted in the subheadline of his story. "But that’s only if you don’t do something smarter with the money," he added.
The "something smarter"? You guessed it, shovel-ready stimulus jobs!:
[W]hichever approach we choose, there are clearly more cost-efficient ways to spur growth than keeping income tax cuts for the rich. Even supporters of keeping the cuts, such as Feldstein, acknowledge, though, that political practicality may be driving the decision more than pure policy. “The only issue on the table with a very short amount of time is what to do with the expiring tax cuts,” Feldsein says, “not what more general policy might be adopted.” While full tax-cut extension would exacerbate income inequality, many alternative proposals, such as payroll-tax cuts for workers or unemployment benefit increases, would reduce inequality but might be less politically palatable. Other approaches, such as investing in infrastructure, would give society something tangible for its investment, with potential economic or environmental benefits in decades to come.
For her part, Adler colleague Nancy Cook interviewed rich liberal Jeffrey Hollender, the CEO of green cleaning products company Seventh Generation, who is all too happy to be taxed some more:
NEWSWEEK: So why do you oppose extending the tax cuts for families that make more than $250,000 a year?
Hollender: This is a time when the wealthiest Americans need to give back to the country. I know this well, as someone who has been financially successful, the vast array of benefits available to me that are not available to other people. It’s a moral question, but it’s also equally economic, because I don’t necessarily need everyone to agree with my morals and my perspectives. We can agree that the country can’t afford the tax cuts. This is the absolute wrong time, because where is that money going to be made up from? It’s going to come from social services. The government will have to reduce expenses, probably by providing fewer benefits for less affluent Americans. I can’t remember the government dealing with economic problems in a way that has inflicted pain on me, but that’s the not the case if you’re living below the poverty level.
Of course, later in the interview we get around to the less than altruistic interest Hollender has in tax policy (emphasis mine):
[NEWSWEEK] What else would you like to see the government do to close the gap between the poor and the wealthy?
[Hollender] The tax code is a disaster. It needs to be simplified. There is a huge amount of taxes collected out of people’s paychecks. Unfortunately, we tax too much of the good stuff, like income, and not enough things that pollute our air or that cause many of the problems we face. We have an economic system that encourages bad things and bad behavior. Why should organic food cost more than nonorganic food? If you want to create that kind of negative impact, you should have to pay for the right to do that. I really think that we send very confusing messages to the marketplace and that makes it hard for people to do the right thing.
Remember, Seventh Generation is a "green" cleaning products company. It's hardly surprising that its CEO would lobby for heavily taxing "bad things" -- like non-recycled garbage bags, for example, which would help push consumers towards buying Hollender's recycled-plastic garbage bags.
To be fair, Hollender's views on tax policy are probably not completely driven by economic interest, but it certainly has to be one factor in his views.
Yet Cook failed to press Hollender with any skeptical questions on this point in her interview.