Just raise the income tax
Raising taxes has become unpopular—but at some point you have to pay for things. And, since politicians don’t like to be the guy who raised taxes, they have been pretty high on increasing fees for services or taxing certain not-strictly-necessary products like tobacco, alcohol, casinos, softdrinks, and live entertainments.
Stop doing this. There might be some persuasive public policy reasons to tax these things—but it’s an awful way to go searching for revenue. Federal income tax is progressive. If you’re not making much, you don’t pay many taxes. If you’re earning more, you pay a higher percentage in txes. (At least, in theory.) And almost everybody agrees that this is a good idea, even if we disagree on how progressive the tax should be.
Most state income tax, in my experience, is relatively flat. You pay something like 4% of your income over a certain point, regardless of what you’re earning. It’s not progressive—but it could be worse.
Increasing sin taxes, fines, and fees, however, is regressive. Everybody pays the same amount for a driver’s license, regardless of income. If you get a ticket for running a red light, it costs the same amount whether you’re earning five million a year or five thousand a year. And the wealthy don’t drink more softdrinks or smoke more heavily than the impoverished. (If anything, it is the other way around.) Of all the options, increasing fees and taxes on the few luxuries the poor can afford is regressive.
Raising taxes during a recession isn’t popular—but if it’s necessary, let’s just do it the right way.
The lengths that politicians will go to not raise taxes is incredible. FOR EXAMPLE.
