Thursday, June 14, 2007
Taxing The Globalizers
According to The Wall Street Journal, some prominent globalization supporters have finally recognized the damage globalization has done to middle class wage earners and propose a solution. Instead of instituting protectionist policies that will inhibit free trade, the administration should raise taxes on "globalization's winners" - e.g., those professionals and business executives with annual household incomes of $200,000 or more - and lower taxes on less affluent wage earners. The new proposal, championed by such figures as former Bush economist Matthew Slaughter, political scientist Kenneth Scheve and ex-Treasury Secretary Lawrence Summers, would include such measures as eliminating Social Security and Medicare payroll taxes for those making $33,000 or less (half of all workers) and raising these taxes for the top earners. Although "taxing winners isn't without risk", as globalization enables individuals and, certainly, corporations to simply relocate to other countries, "using the tax code to slice the apple more evenly is far more palatable than trying to hold back globalization with policies that risk shrinking the economic apple."
"The Case for Taxing Globalization's Big Winners" from The Wall Street Journal