I hate it when economists can't do math.
In the NY Times today, an article about capping tax deductions.
Sounds sensible, right? It would hit the highest-earning more than lower earners.
Except that it's another attack on the middle class.
First, it still hits the middle class hard, and they just don't have it to give. We can argue about the actual salary that qualifies as "middle class," but by Feldstein's own numbers, "Taxpayers with incomes of $25,000 to $50,000 would pay about $1,000 more in taxes."
Fuck that noise. People in that tax bracket can't afford it. I know a lot of people in that bracket, and none of them can afford to fork over another $80/month to the government. That money would be better off in their pockets where they can spend it and continue to stimulate the economy.
Why is it so hard to understand that a well-off middle class is a boon to the economy? One thousand middle-class people who have disposable income will buy 1000 nice televisions. I don't care how fucking rich someone is--they're not going to buy 1000 televisions.
Similarly with Feldstein's cap on medical insurance. People who are very, very poor get some sort of health insurance courtesy of the government (yes, it should be better, but it's something). People who are middle class have to hope their employer deigns to offer a plan. Those health plans have gotten steadily more expensive, but everyone keeps paying for them because doing without is just a slow method of suicide.
If we can't get a sensible public health system in place (again I ask, is the USA so much less competent than the UK or France or Germany?), then fucking make it possible for ordinary people to afford the health care they can get.
Feldstein's plan is just a flat tax by another name. It will hit the wealthy for more money, sure, but it will hit the middle class harder.