Warren Buffett’s Good Idea on the Earned Income Tax Credit Is Bad for Progress
New Republic – Danny Vinik.
Last week Warren Buffett took to the Wall Street Journal to advocate increasing the Earned Income Tax Credit (EITC). The core of his argument can be summarized through this excerpt,
“I may wish to have all jobs pay at least $15 an hour,” Buffett writes. “But that minimum would almost certainly reduce employment in a major way, crushing many workers possessing only basic skills. Smaller increases, though obviously welcome, will still leave many hardworking Americans mired in poverty.” He continued, “The better answer is a major and carefully crafted expansion of the Earned Income Tax Credit (EITC), which currently goes to millions of low-income workers.
While his statement that raising the minimum wage would “reduce employment in a major way” is a dubious claim (check out Goldy’s latest piece on this subject), he nonetheless presents an attractive political alternative to the minimum wage. As I have noted in my series on basic income and negative income tax, we may be arriving at a stage in US history where the government will have to provide a minimal level of subsistence for its populous.
Yet, the practicality of implementing such a policy are slim (even for such a watered-down basic income policy like the EITC). Vinik commends Buffett for thinking outside of the box on the issue, but he points out,
[The EITC is] a policy that has no chance of passing Congress and thus no chance of helping those workers. The policy analysis of it may be correct, but the politics of it are wrong—and that makes it counterproductive.
Liberals are enjoying a comeback: “That’s right: A large chunk of Americans recently decided to come out as ‘liberal’ — socially liberal, to be specific. As a result, for the first time on record, self-proclaimed social liberals are no longer outnumbered by their conservative counterparts.”
Liberalism needs better politicians, not better ideas: In an op-ed for Al Jazeera, Paul Kahn examines how the “left” in America, the UK and Israel are all scrambling to find attractive political candidates to promote their respective brands of liberalism. He concludes that the recent defeats for the left in the UK and Israel should be a warning sign to Democrats:
What the liberal left needs is not so much new policies but better politics. It is not the message but the messenger that has been failing.
Obama’s favorable rating up: In his best numbers since September 2013, Obama’s favorable ratings stand at 53% – up 4% from March of this year. As Gallup rightly clarifies, “a president’s favorable ratings are distinct from approval of his performance; job approval ratings generally tend to be lower.”