The Benefit and the Burden begins with a short history of American taxation and a description of the core issues in the definition of income. It follows with some discussion of the principal economic arguments that have flowed around the relationship between taxes, growth and fairness, and then proceeds to examine the issues surrounding preferences in our tax code – for housing, for charitable contributions, for capital gains, and the problem of taxing corporate profits. It ends with a discussion of reform proposals, and Bruce makes his case for a VAT to close the revenue gap and fund the government that we will need, among other things, to support an increasingly elderly population.

An article in Forbes reveals those at the top 0.1 percent in personal income in the country captured about half of the capital gains, which are currently taxed at just 15 percent. That makes this a prime mechanism for creating and increasing income inequality.

The biggest reason why you would want to use higher taxes on the rich and the nation’s largest corporations if you’re going to pay for stimulative job-creation measures is not just because these would be the least disruptive offsets for an economy waiting to heal. Just as high on the list is the fact that low taxes on the ultra-rich distorts the economy and makes future growth nearly impossible.

A perfect example of this comes from the Washington Post’s salutary article today on capital gains taxes. This is something that hardly even gets talked about anymore, but it’s at the heart of at least one of the pay-fors on the White House’s list, the carried interest loophole. The only reason that hedge fund managers are paying drastically lower tax rates is because the taxes on their capital gains, which they are calling their entire income, is drastically lower than the income tax. And this has produced massive inequality, pushed along by the rich contributors of politicians in both parties.

In the New York Times Economists Bowl, I call it Princeton 2, Harvard 0.

When the leaders of France and Britain got together yesterday, they were facing realities that are not kind to the European community’s economic future. That they suggested what is bound to stir a lot of bad feelings among the banksters, a tax on financial transactions, shows vision that we desperately need. The U.S. would be in much better shape for the future if there were even the slimmest prospect that such a concept could be floated here.

The reality of Scott Walker’s two-year budget is setting in, and people have begun to connect the dots.

I don’t think we should jump on this fully until we see a full solution. But enough of the usual suspects have signaled that a tax cut deal is imminent, with the same broad contours, that we should take a look at the particulars. Here’s Jon Ward (although others have corroborated): The deal will extend [...]

Sadly, it appears the Obama Administration now falls firmly in the same camp of having “deficit reduction” just mean stealing from the poor to give to the rich. While the president talks about how we need to reduce the deficit, he has his staff and surrogates fighting diligently to increase the deficit by making sure hedge-fund managers and wealthy Wall Street investors pay a lower tax rate than teachers and police officers.