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April 16, 2004

Max on Tax Credits

Max has a good response to my post on Kerry's tax credits.

The problem with tax credits, as Max points out, is that the IRS is not a very competent social worker. Their eligibility rules are confusing for different credits and poorer folks can be quite intimidated by dealing with them to get their money.

All true and in an ideal world, we'd just have universal health care and child care paid for by the Health and Human Services Department.

But if Kerry can politically sell $200 billion in "tax credits" for education and health care where he might be able to push through only $100 billion in direct spending on the same, the tax credit gambit still looks attractive. Maybe that's not the tradeoff, but it's still worth understanding what Kerry is proposing and debating both its efficacy as policy and its merits as a political strategy.

I said that Kerry's "spending cap" rhetoric is bad, but if he can sell hundreds of billions of dollars in new spending in the guise of "tax cuts", I'll still be happy with the results.

Maybe the next step will be to hire a social worker division for the IRS.

Posted by Nathan at April 16, 2004 09:34 AM