Mark Zandi, the co-founder and chief economist of Moody’s Economy.com, stopped by on Thursday afternoon. He was here to promote his new book, Financial Shock: A 360° Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis, and Barbara and I will get to that later. But he also moonlights as a John McCain adviser, and had something interesting to say about how he thinks government ought to tackle income inequality:
Is it better to raise taxes on high-income households or cut their benefits? It’s probably more efficacious to cut their benefits.
The benefit-cutting example he gave was health care, where if you put a limit on the tax deduction for employer-provided health insurance (as McCain wants to do), you wouldn’t be subsidizing high-income people with super-high-end health plans. There you have it: That class warrior John McCain wants to soak the rich. At least a little bit.
Doing away with, or capping, the home mortgage interest tax deduction would have a similar impact. Although I don’t seem to remember seeing that in either candidate’s platform.