Elements in both parties believe the tax system should be an expression of American values, but they have vastly different values. Some liberals believe — though they deny this is their view — that the purpose of the tax system is primarily to foster fairness. Some conservatives believe — they’re in denial, too — that the tax system should be designed only to create jobs and foster entrepreneurship. Again, neither side should win, or lose, completely.
— Is the tax system designed to raise revenue or shape economic behavior?
This question is seldom raised, never answered, in part because the pugilists want to answer one way some of the time, the other way the rest of the time.
Some want to use the tax code to shape behavior, whether to conserve energy or encourage home ownership, almost always with phony arguments that distort the economy but please powerful interest groups. Others want to use the tax system to spur growth or, while lowering rates, to promote freedom — although four of the five nations with the highest tax rates as a percentage of income (Belgium, Germany, France and Sweden) arguably are as free as we are.
— Have the legal definition of “entitlements” and the popular meaning of the word been so confused that we are on a path to economic disaster?
Tens of millions of aged and infirm Americans are legally entitled to Social Security and Medicare benefits as currently constituted. But just because these social benefits are called “entitlements,” does that mean everyone has to be entitled to them or that they have to be distributed at current levels, even if the ratio of money being diverted into the system already is out of whack with the money pouring out of it?
Medicare has not strayed much from its 1965 moorings. And it is not surprising that, with the population aging and medicine advancing, Medicare costs are growing. But these costs can be contained — by adjusting reimbursement formulas and eligibility requirements.