Those who know me well know how much I like civility in debate. And, beyond civility, I like even more when people on one side of an issue will grant a point made by someone on another side of an issue. One nice result is that both sides can narrow the issue down to where they disagree. When I'm in an audience and I see one speaker say that everything the other speaker is false, my red flag goes up and I lose interest.
For that reason, I was pleased to see Jared Bernstein's response to Chris Edwards. Jared is a senior fellow with the Center on Budget and Policy Priorities. From 2009 to 2011, he was the Joe Biden's chief economist. Chris is the director of tax policy studies at the Cato Institute. Those two places are ideologically pretty different and I am almost always on the Cato side of things.
I was about to write a blog post pointing out how devastating Chris's critique of Jared was. But now I don't have to--because Jared pointed it out. It turns out that it was all a misunderstanding. I particularly liked the opening two paragraphs of Jared's response:
I recently touted the benefits of a financial transaction tax (FTT), and in the intro, I made a comment about how our tax code is titled toward the wealthy. Chris Edwards very reasonably takes issue, correctly noting that our federal tax code is, in fact, quite progressive, meaning that low-income households face a much lower tax burden as a share of their income than higher income households.
My piece wasn't about the broader code so I didn't take the time to elaborate what I meant. My bad, but let me do that here.
He then goes to explain what he meant and it's very different from what Chris or I thought:
The fact is that our tax system contains a large number of provisions that disproportionately benefit wealthy taxpayers, many of whom are the same folks on whom the incidence of the FTT will fall. So while I did not sufficiently articulate the point, for which Chris fairly dings me, I was trying to say that one distributional rationale for the FTT is that it pushes against some of the tax preferences I'm about to show you.
After laying out his data and showing some striking graphs, Jared ends with:
So good for Chris for pushing me to explain myself, but more to the point, I take the fact that he said nothing about the central theme of the oped--it's time to seriously consider implementing a small FTT--to be an implicit endorsement.
I'm guessing Chris doesn't.
By the way, Timothy Taylor recently had an excellent post on financial transactions taxes.