THE BLOG

Time to Talk Tax Hikes

08/11/2009 05:12 am ET | Updated May 25, 2011

Raising America's taxes is an excellent idea.

House leaders deserve credit for beginning the debate on exactly who should pay how much more and when. Regardless of the outcome, it will make our politics slightly more honest while relieving some internal pressures on the Democratic Party.

The latter issue is raised by those on the left who are disturbed by how income has tilted toward the top in recent decades and believe the tax system should take a more aggressive role in offsetting that trend. That the revenue raised could finance programs they like or reduce record anticipated deficits is icing on the cake.

White House efforts to mend capitalism rather than end it have troubled this group, which notes that responses have been more successful in saving banks than reducing foreclosures and that executives in semi-socialized firms are still making big bucks.

So asking the rich to pay a bit more sends a reassuring signal to this group while providing a way to fund our government, which is spending quite a bit more than it is currently taking in.

Whether such a tax increase is actually included in the health package ultimately approved -- and my personal bet is that at least a sliver of it will be -- isn't terribly important. What is important is that this faction of the Democratic Party has an opportunity for a public test of something it thinks should be on the agenda.

At best, they'll win something. At worst, they'll have a clearer picture of who's unsympathetic to their views. A final benefit is that this avoids a sticky debate about taxing employer-paid health insurance premiums, a disruptive move of unpredictable benefit that they see as a dagger aimed at one of their key constituencies, union members.

Raising this issue can also start a debate about our chronic deficit issue. Few argue with the need for red ink now given the economic stresses of the moment. But fewer yet think that the deficit problem will solve itself over time. And some think America is becoming increasingly vulnerable to a potential lenders' strike. If others decide to stop loaning us money, we'd confront a real crisis.

Balancing the budget is one of those questions that's simple, but not easy. Either we spend less or bring in more. Today's debate in California suggests that waiting for the arrival of the revenue fairy or outlawing waste, fraud and abuse are faux strategies that deflect attention from the tough decisions that ultimately will be required.

When the House votes on legislation to raise taxes as part of health reform, we'll see the opening chapter of that overdue debate.