Ryan Streeter
Middle America is up for grabs in 3 ways, which I have laid out here. The middle class, the middle of the electorate, and middle American regions, cities and towns - all of these represent fair game for both parties. The party that lays out an agenda that cuts across all three of these with a positive policy agenda will govern America for some time.
I have put forward three ideas to help middle America here. Now, I'd like to highlight a way to help the middle class, which Ramesh Ponnuru and Reihan Salam have proposed in the current National Review. Their proposal is based on the fact that a large portion of working class Americans do not have a vested interest in social welfare programs but rather value self-sufficiency and government non-interference. The two main ideas are:
- Reduce the payroll tax for middle income workers by offsetting it with reductions in the state and local tax deduction and the mortgage interest deduction - which favor more affluent taxpayers.
- Make a repeal-and-replace approach to Obamacare all about lowering health care costs for working class families, which is the same as an increase in disposable income.
The first bullet is especially important. The debate spurred by the deficit commission in November raised the issue of tax reform - and the mortgage interest deduction in particular - in a more prominent way than we have seen in awhile. It may be difficult for people to imagine giving up their beloved deductions, but doing so would create other options that people would come to love. Using the savings generated by eliminating deductions (the mortgage interest deduction phase-out would open up $100 billion annually, for instance) to reduce the payroll tax, as Ponnuru and Salam suggest, would be an important step in showing how simplifying the tax code and providing relief to working families go hand-in-hand. Now is the time for courage on such measures.
Obamacare is a huge burden on working families. Their shoulders are ultimately where the added costs of the program lie, as rising premium costs wipe out the wage gains and jobs that in turn wipe out any purported benefits of the health care bill. Repeal-and-replace is key to increasing the economic prospects of middle class, and lower middle class, families.
Comments