Thursday, August 26, 2010

Is This A Fair Tax By Another Name?

Here's where the state and local death spiral leads:
"Borrowing from China to skirt devastating state layoffs is one thing. But borrowing from China to keep runaway Medicaid programs in New York and California free from fundamental overhaul, and gargantuan unfunded public pensions untouched, seems mad. In California, more money is spent each year on compensation and pensions for 70,000 prison employees than on the state's entire higher education system!"

This is an interesting proposal. It sounds much like the Fair Tax ...
"Nor would it be hard to design an ambitious new stimulus that goes beyond these state bailouts that could make a big difference fast. As I've argued before, we could enact big payroll and corporate tax cuts now, offset (and then some) by new energy and consumption taxes passed today but taking effect only once unemployment is below, say, 6 percent. This tax swap, which could appeal to liberals and conservatives, would provide a much-needed jolt to business's "animal spirits" while assuring bond markets we're serious about getting our house in order in due course."

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