Krugman on Ryan’s Fantasy Budget. What About Coral Gables?
April 6, 2011 Leave a comment
I wonder sometimes if this is not the model for the budget for Coral Gables. But no, the city keeps increasing taxes in the face of falling revenues or rising revenues.
It is timidity of tax cutting in Coral Gables that keeps taxes increasing and terrible past commitments of the city in pensions and salaries, as well as having way too many employees.
Actually, what is not good for the country (keep lowering taxes and spending) is just fine for a small bloated municipality. At the federal level we know where the money is going (health, the military, social security, debt payments, and other small government programs).
Where does the money really go in Coral Gables–it goes for salaries and benefits–for which there have been no good studies of their efficient use.
Ryan is proposing huge (and largely unspecified) spending cuts; but he’s also proposing very large tax cuts, mainly, of course, for those with high incomes. And as you can see, a large part — roughly half — of the spending cuts are going, not to deficit reduction, but to finance those tax cuts.
Actually, it’s even worse, since the revenue figure in the Ryan plan is simply assumed, and is clearly too high given what he’s actually proposing on taxes; so either the fall in revenue will be even larger than shown here, or there will be unspecified tax hikes on the middle class.