Please Check Your Lottery Tickets

For I agree -- wholeheartedly I might add -- with a Ross Douthat column on of all things, ending tax breaks.

This policy is typical of the way the federal government does business. In case after case, Washington’s web of subsidies and tax breaks effectively takes money from the middle class and hands it out to speculators and have-mores. We subsidize drug companies, oil companies, agribusinesses disguised as “family farms” and “clean energy” firms that aren’t energy-efficient at all. We give tax breaks to immensely profitable corporations that don’t need the money and boondoggles that wouldn’t exist without government favoritism.


And we do more of it every day. Take Barack Obama’s initiative to double U.S. exports in the next five years. As The Washington Examiner’s Tim Carney points out, it involves the purest sort of corporate welfare: We’re lending money to foreign governments or companies so that they’ll buy from Boeing and Pfizer and Archer Daniels Midland. That’s good news for those companies’ stockholders and C.E.O.’s. But the money to pay for it ultimately comes out of middle-class pocketbooks.

This isn’t just a corporate welfare problem. The same pattern is at work in our entitlement system, which is lurching toward bankruptcy in part because of how much Medicare and Social Security pay to seniors who could get along without assistance. Instead of a safety net that protects the elderly from poverty, we have a system in which the American taxpayer is effectively underwriting cruises and tee times.

All of this ought to be grist for a kind of “small-government egalitarianism,” in the economist Edward Glaeser’s useful phrase, that seeks to shrink government by attacking Washington’s wasteful spending on the well-connected. And sometimes conservative politicians make moves in this direction. President George W. Bush’s Tax Reform Commission proposed sharply reducing the mortgage-interest deduction. House Minority Leader John Boehner, to his great credit, recently floated the possibility of means-testing Social Security. Many Republican senators have been staunch critics of corporate welfare.

In the age of Barack Obama, many rank-and-file conservatives have been more upset about redistribution of a different sort — the kind that takes money from the prosperous and “spreads the wealth” (as Obama put it, in his famous confrontation with Joe the Plumber) down the income ladder.

This kind of spending can be problematic. But conservatives need to recognize that the most pernicious sort of redistribution isn’t from the successful to the poor. It’s from savers to speculators, from outsiders to insiders, and from the industrious middle class to the reckless, unproductive rich. 

Blaming Obama for something that's been going on for decades is your typical Douthat sloppiness, but he's right on the face of the problem:  tax breaks for those who don't need it are killing us, and if those who call themselves conservatives are serious about reducing debt and paying for spending, then we have to let tax breaks go for those who don't need them to get revenue back in our system.  The Bush tax breaks are costing us trillions right now, and all they did was provide casino money to the worst speculators in the housing bubble collapse under Bush.

Congress of course won't allow these tax breaks to expire.  Obama doesn't seem too keen on letting them go either, is the problem.  Still, it will be interesting to see what the response on the right to Douthat's column will be, and just who over there is serious about deficit reduction rather than just using it as an excuse to attack social programs.