By 2020, 70 million Americans are expected to be on Social Security, up from 45 million in 2000. The ranks on Medicare will swell to 64 million, up from 40 million in 2000. Virtually every economist knows that just maintaining Medicare and Medicaid benefits will require raising taxes on the middle class.
But though the nation’s fiscal challenge has taken center stage in the presidential election campaign, raising more taxes from American families remains stubbornly off the table.
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American policy makers justify our choice for low taxes with the claim that they foster economic growth. But the evidence is, at best, mixed. Since 1980, income per person has grown roughly the same across developed nations, about 300 percent, according to the International Monetary Fund. It has grown a little faster in the United States than in the European Union and Canada, but slower than in higher tax countries like Japan, Norway and Sweden.
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It may not be impossible for the American political system to accept the case for a bigger government, with higher taxes and better public services. Ronald Reagan, George H. W. Bush and Mr. Clinton passed tax increases to address budget deficits.
Bruce Bartlett, a tax expert who worked in the administrations of Mr. Reagan and the elder Mr. Bush, says he believes that the deteriorating budget outlook will ultimately persuade the political class. “We need a few more years in which conservatives try to deal with the problem solely through spending,” he said. “We need to travel down this road a few more years and then people will recognize it is futile.”
Gov. Chris Christie of New Jersey, who is scheduled to give the keynote address at the Republican National Convention later this month, plans on delivering "very direct and hard truths" to the American people. "Fixing these problems is not going to be easy for any of them," he said.
Does that mean the governor is ready to talk about revenue increases?
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