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Death and taxes

A couple of weeks back, Matthew Yglesias had an insightful post noting that "by far the fastest way to end the war in Afghanistan would be to ask General McChrystal’s staff to produce a plan to make it deficit neutral and find sixty votes in the Senate for his financing plan." Today, it looks like that question might be a bit more relevant, as Rep. David Obey is advocating a wartime surtax on high-income households to pay for any escalation in Afghanistan. "It’ll be interesting to see how far he goes with this," writes Yglesias. "Does he put together a bloc of progressive legislators who say they’ll only back a tax-financed version of the war? Would any Blue Dog budget balancers join such a group?"

A couple of points here. First, there's no reason this should be limited to high-income households. I can see the argument for concentrating a health-care tax at the top of the income pile, as the rich are getting massively subsidized by the system right now (through the employer tax exclusion), even though that's not my favored way to pay for the bill. But that doesn't hold for war, and if part of Obey's point is that we need to face these tradeoffs squarely, then he should design a tax that does exactly that, rather than continuing the fiction that we can pay for everything in American life by adding a bit more to the tax burden of the rich. Maybe a very small value-added tax?

Even so, it's nice to see Obey being radical enough to admit that war requires actual money. We have a discourse in America that's comfortable asking whether wars are winnable, but not whether they're worth it. In that way, we actually treat war rather like we treat health-care spending: the question is whether we can save a life or vanquish a foe, not whether this is the best use of money given all the other things that can be done with that money. That's one of the reasons, incidentally, that I'd like to see a simpler tax code, more along the lines of a VAT. A 1 percent rise in the tax rate would have a lot of meaning for people, and help us think clearly about what is, and isn't, worth doing.

By Ezra Klein  |  November 23, 2009; 6:02 PM ET
Categories:  Afghanistan , Taxes  
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Comments

The employer tax exclusion is hardly the only way that the tax code favors the rich, and I think you know that Ezra.

Be that as it may I am definitely in favor of a war tax, and it should be an increase in the income tax. The progressive income tax began 100 years ago as a way to pay for wars. It was considered fair because the rich benefit disproportionately from war: they profit from them and they also have a lot more to lose if we're, say, conquered by Afghanistan. (HEHE)

I would consider a VAT tax, but only to pay for safety net programs every other enlightened democracy has, like single payer health care. Ezekiel Emanuel favored it, yet it was taken "off the table."

Posted by: bmull | November 23, 2009 7:19 PM | Report abuse

Limiting the tax to high-income households could focus attention on how the human costs of the wars are already being paid by those who have generally lower incomes.

Posted by: wtomasko09 | November 23, 2009 7:20 PM | Report abuse

I agree with Ezra that there's no reason this should be limited to high-income households. After all, those "real Americans" whom Fox news and Sarah Palin cater to say they support the troops; well, I betcha they'd just love to pay a war tax!

Posted by: goadri | November 23, 2009 7:56 PM | Report abuse

Poor people are the ones fighting the war but I guess taxing them is fair if by fair you mean they pay with their lives and a much larger portion of their income.

Posted by: jamusco | November 23, 2009 9:33 PM | Report abuse

I completely agree with this concept and think it (a war tax) should be applied to everyone, not just high earners.

Everyone is responsible for wars that we engage in, yet it's oh so easy to distance ourselves from the reality of war while others risk life and limb to do our dirty work.

Perhaps a pinch in the pocketbook would wake more of us up; at minimum give us pause long enough to contemplate the reality of war. Hopefully, it would lead more people to voice opposition to war, any war.

Posted by: onewing1 | November 23, 2009 11:34 PM | Report abuse

i just watched part of an interview he did recently about this, i wonder if it was earlier because in the interview he was talking about a graduated-tax based on income. and that everyone should have to sacrifice something, not just military families like it is now.

Posted by: schaffermommy | November 24, 2009 6:39 AM | Report abuse

I agree that everyone should pay the tax. If only a small slice of the population pays the tax, you don't get the 'is it worth it' discussion, because for most people the war is free.

Having the rich pay for the war is actually maintaing the status quo - the rich are paying for the war because we are using debt financing, and interest on the debt has to be paid for with income taxes the vast majority of which are paid by the rich and upper middle class. Increasing the income tax to pay for the war would shift the burden of the war's expansion away from the future rich and towards the current rich.

Posted by: justin84 | November 24, 2009 10:23 AM | Report abuse

War is not like health care spending! War is a temporary expenditure that does not go on like a health care entitlement. They are very different expenditure phenomena and should be treated differently budgetarily.

Posted by: lancediverson | November 24, 2009 10:41 AM | Report abuse

I would love to hear Obey echo Ezra's argument that that portion of your income that the Government does not take is a subsidy. Let's see how politically popular that is.

Posted by: tomtildrum | November 24, 2009 11:39 AM | Report abuse

lancediverson:

"war is a temporary expenditure"?? I'm 62 years old and it feels like for most of my life the U.S. has been "at war".

In times of peace (should there actually ever be any), the referenced sur tax could go to defray the chronic, astronomical "defense" budget that continues to grow exponentially regardless of the war/peace status.

Posted by: onewing1 | November 24, 2009 3:24 PM | Report abuse

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