Thread by @jbarro

You are rich if you make $500,000 a year, even if you don’t consider yourself rich. Still, Dems will have a hard time agreeing to raise taxes on the rich, since some congressional Dems want to tie it to a big tax cut for the rich — SALT. businessinsider.com/people-who-mak…

Low interest rates are also a barrier to tax hikes in 2021. The usual argument for raising taxes is “someone has to pay for this.” But does someone? The ease with which we can borrow makes spending easy and taxing hard. businessinsider.com/people-who-mak…

(One thing people forget on SALT is it’s not *just* a sop to rich Democrats in blue states — public employee unions care about restoring the deduction because it makes it easier for states to tax rich people and spend the proceeds. So the issue has more legs than you’d think.)

This is a reason MMT’s inversion of the fiscal and monetary functions is so dumb — good luck selling taxes like this! Also the rich may not adjust consumption if taxed more — you have to tax the masses to fight inflation fiscally.

https://mobile.twitter.com/selling_theta/status/1389593385611239424

MMT did not “win” any arguments, what we’re doing now is Keynesianism with correct parameters. If you get the government to start using monetary policy to finance spending and fiscal policy to control inflation (lol) then you can say MMT won.

It’s just so insane, you’re going to raise the payroll tax or whatever (higher capital gains rates will not fight inflation) and tell voters “this isn’t to finance spending, it’s to reduce your income so you spend less and inflation is lower.”