Matthew Yglesias: The Next Tax Revolt: Had this stuck in a window for a week now, and didn't want to lose it, even though I don't have time to dig into it. Interesting point:

The United States already does about as much as any other country to curb inequality through the tax code. Where we fall short is in fighting inequality through government spending -- we just don't spend very much. If you care about inequality, in other words, the thing to focus on is not soaking the rich through the tax code but rather ensuring that there's enough tax revenue to finance generous public services. Broad social-insurance schemes like Social Security and unemployment insurance, as well as government operations more generally, are strongly progressive in their impact.

The most important issue is whether or not the government has the revenue needed to finance generous spending on social services. The Scandinavian model of a cradle-to-grave welfare state financed largely through regressive taxation is not regarded as punitive to the poor. By contrast, the pre-New Deal United States had an extremely progressive tax structure -- a simple income tax levied only on the wealthy -- but it resulted in meager revenue and financed no noteworthy social-insurance system or public services.

One thing that seems to be a general rule of US tax policy is to make taxation as visible, and therefore as painful, as possible. This actually runs counter to one of the basic (and oft-repeated) considerations in taxation: the belief that taxes disincentivize behavior. This is even considered a selling point for sin taxes. But if taxes are such a drag on the economy, it would make much more sense to make them less visible, as well as to focus them on cases where disincentives are trivial or non-existent -- e.g., taxing dead people. For the living, the least painful time to tax is whenever a transaction occurs: when you buy and sell something, or when you pay someone a wage or other remuneration. With few (if any) exceptions, the robust tax base countries Yglesias favors raise most of their taxes through a VAT, which (unlike American sales taxes) is generally buried within the cost of the purchase. VATs raise prices, which has some negative effect on demand, but they don't hit you out of the blue like property taxes do. It also helps if the burden of tax collection is placed primarily on business, which used to be the case in the US but is less so now: it is both less visible to most people and it fits in with accounting procedures that businesses need to do anyway.

I can't vouch for Yglesias's assertion that the US tax code is relatively progressive compared to other countries. One thing that is certain is that it is much less progressive than it used to be. There are a lot of ways that progressivism could be used that aren't now. In particular, I would make both corporate income and VAT taxes mildly progressive based on company size: a break for small and especially new competitors and a brake against WalMart-sized monopolies. I also think that unearned income -- interest, dividends, capital gains, gifts, estates -- should be taxed progressively according to total lifetime gains: a break for anyone starting to build a nest egg, and a brake on excessive accumulation.

Of course, there's no point raising taxes unless you plan on spending the revenues on something useful. I can come up with a long list there, too -- subjects for many future posts.

Getting ready to take a vacation of sorts. A long road trip, anyhow. Some interesting articles that I had kept open with some vague notion of writing something about them, but now will have to pack up:

• Tony Judt: Fictions on the Ground: On Israel's settlement occupation.
• Tony Karon: Iran's Crisis: The Opposition Weighs Its Options: Realistically, it's a long shot to bet against the house.
• Ezra Klein: Wealth-Care Reform: Yes, it's more about money than medicine, which is the reason health care reform is such a struggle: a lot of money is at stake, for uncertain medical outcomes.
• Paul Krugman: Not Enough Audacity. On health care: "The point is that if you're making big policy changes, the final form of the policy has to be good enough to do the job. You might think that half a loaf is always better than none -- but it isn't if the failure of half-measures ends up discrediting your whole policy approach." Also: "Indeed, the prospects for such savings are precisely what have the opponents of a public plan so terrified."
• Kathleen Parker: Runaway Goveror: The Sequel: On Gov. Sanford, more or less, before all the facts were in, which is why she had time/space to survey the rest of the GOP. Don't miss the Newt bit at the end.

By the way, Iraq is getting bloody again, with over 200 civilian deaths this past week. I've just slogged through Thomas Ricks's Surge-celebratory The Gamble, and it's worth noting that the intelligent people behind the strategem -- a group excluding politicians like McCain and Lieberman, pundits like Kristol, and self-appointed experts like Fred Kagan -- never saw as anything more than a beachhead that would depend on significant political reconciliation to secure. The latter didn't happen for a lot of reasons, and now it's closing. Of course some people, including Ricks in his prognosticating epilogue, will attribute this to the imminent US withdrawals, implying that we can fix the problem by launching Surge II. But the fact is that there will always be a day of reckoning when US forces leave, and putting that off tries the patience of everyone in Iraq who wants to get this war settled. The idea that Iraq is a "forever war" is stuck in the heads of a few American hawks who invested heavily in it, but it's plainly absurd to most Americans, who sooner or later will manage to pull the plug. When that happens, Iraq will sink or swim. I've always felt that Iraq's odds would be better if the country is not tied to the dead weight of American imperialism. Nothing that has happened, including the adjustments Petraeus and Odierno made, has changed that.