Glenn Hubbard:
[W]e are in a difficult situation in large part because we have designed entitlements for a welfare state we cannot afford. And, perhaps less obviously, they show how we have used the tax code as a vehicle for special-purpose spending that weakens both the efficiency and fairness of our tax system.
I would argue instead that we have designed entitlements for a welfare system we are unwilling to pay for, rather than what we can afford. This is a problem for Democrats as well as Republicans. Until Democrats honestly address the costs as well as the reasons for the (weak) welfare state, they are as much to blame as the other side for any budgetary stalemate. Taking care of the less fortunate is not at odds with economic growth in the long run, but we don't seem to be able to have a reasonable discussion about our aims and their potential costs.
I don't agree with everything Hubbard says in his opinion piece, but most of it makes a lot of sense. Our tax code is a mess. So much so that it's almost impossible to know what effect changes would have on various income classes. It is entirely possible that the Bowles/Simpson proposals would end up with top earners paying more, even though their marginal rate would go down--depending on the effects of changes in deductions from income.
Glenn Hubbard in the NYT on the tax reform portion of the Bowles/Simpson deficit proposal.
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