Tag Archives: Earned income tax credit

The Greed of the “Bottom Half”

We’ll shortly be hearing the objections of deficit hawks to the deficit reduction package Demos, The Century Foundation, and the Economic Policy Institute. No doubt they’ll echo the criticisms that have already been leveled at the deficit-shrinkage roadmap Rep. Jan Schakowsky put on the table earlier this month. To get a sense of what those criticisms are likely to be, I recently had a close look at a Schakowsky critique by The Atlantic’s resident deficit hawk, Derek Thompson.

The first thing that makes Thompson’s November 16 piece interesting is that it actually acknowledges the existence of Schakowsky’s plan. The second thing, only slightly less extraordinary, is that Thompson makes an effort to analyze and understand the proposal. It took the New York Times nearly two weeks after Schakowsky released it to even note that it was there (and even then, didn’t provide details).

What’s most remarkable about Thompson’s analysis, however, is that he lectures Schakowsky for not squeezing poor and low-income workers hard enough. Continue reading The Greed of the “Bottom Half”

Are Tax Expenditures the Deficit Commission’s Next Target?

If the deficit commission doesn’t attack entitlements, what will it cut instead? One alternative would be “tax expenditures” like the dependent care tax credit and the earned income tax credit. But cutting these would weaken Social Security and Medicare in indirect but very important ways.

The redoubtable Martin Feldstein, Harvard professor, former Reagan advisor, and longtime career-maker in the economics profession, has some advice for our National Commission on Fiscal Responsibility and Reform. If it wants to reduce spending and can’t muster the votes to attack Social Security and Medicare – this being Washington, military spending reductions are, of course off the table – why not cut tax expenditures? Feldstein wrote, in a Wall Street Journal op-ed last week, Continue reading Are Tax Expenditures the Deficit Commission’s Next Target?