Sunday, March 17, 2013

What the Governor Has in Common With Simpson/Bowles

You probably don't remember this, but long before the sequester there was the Simpson/Bowles Commission. The same agreement that created the sequester created the Commission. President Obama and the Republican leadership ended the debt ceiling debate during the summer of 2011 by asking the commission to come up with ways to reduce the debt, ideas that would be passed by Congress so that the cuts demanded by the sequester would not be needed.

Simpson/Bowles stands for former Senator Alan Simpson (a Republican) and former White House Chief of Staff Erskine Bowles (a Democrat). The commission they led submitted ideas late in 2011. The ideas were pretty universally derided. Why? Because they included things Republicans hate and things Democrats hate. So everyone pretty much hated it.

The Simpson/Bowles Commission recommendations included a lot of things I liked. They talked about changing the tax code, dramatically, so it would both be more progressive and would create more revenue. They talked about reforming many entitlement programs so they would last, without their being destroyed or ruled insolvent in the years ahead.

Defenestrated in 2011, almost everyone agrees now the Simpson/Bowles ideas were good ones.

Which brings me to this year's budget plan, proposed by Governor Deval Patrick, to raise revenue in Massachusetts. A lot of people don't like it, because the plan both raises taxes and reduces them. The plan lays bare the reality that to deal with transportation and infrastructure issues, the state needs money. And it goes about raising that money in a way that's fair.

I like the Governor's plan because it makes taxes fairer. It raises income taxes while lowering the sales tax. Everyone needs to buy things, so the sales tax universally benefits all residents and businesses. Meanwhile, the income tax is progressive, as you make more and experience more wealth, you are asked to contribute more. And in the end, those who make the least benefit the most, which makes sense as they have the least to give.

The initial reactions to the Governor's plan from many state legislators was pretty negative, because it includes ideas anathema to today's political discourse--namely taxes. I am hoping that, like with the ideas from the Simpson/Bowles Commission, time will ease initial passions, and the Governor's plan will ultimately pass.

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