David Callahan

David Callahan is a senior fellow at Demos and editor of PolicyShop, the Demos blog.

Recent Articles

History Lesson: Tax Cuts Are No Magic Bullet

No idea is more central to conservative economic thinking than the belief that cutting taxes leads to higher economic growth. One can certainly understand the appeal of this belief: It would be great if government could collect the same amount of revenue, but with much lower tax rates, because those rates fostered strong growth. Alas, the historical record doesn't offer much validation of this sunny supply-side vision -- as I have noted here repeatedly. David Leonhardt discussed the record yesterday in the New York Times. One interesting point he noted was that cutting taxes may make a difference when taxes are extremely high, but the rate changes of recent years are relatively small and thus it's no surprise that the effects would be modest. Listening to today's tax debate, you'd think our political leaders were debating capitalism vs. socialism. In fact, though, going back to the Clinton-era tax rates would mean raising the top income tax bracket by less than 5 percent. That's not...

Read My Lips: Fairer Taxes

Six ways to restore balance to our broken system

(Flickr/TruthOut)
This piece is the fourth in a six-part series on taxation, and a joint project by The American Prospect and its publishing partner, Demos. The “Buffett Rule” proposed by President Obama and now being considered by the Senate would be an important symbolic step toward a fairer tax system. By instituting a minimum tax on very high earners, it would advance the principle of progressive taxation and reform the tax code in an overdue way. By itself, though, the Buffett Rule does not go nearly far enough. It should be a small piece of a much larger agenda for restoring fairness to America’s tax system. Some of this agenda is reflected in President Barack Obama’s 2013 budget proposal, but other important ideas are not yet being seriously considered. Here are six such ideas that should be part of the national debate. Create New Top Tax Brackets The Obama budget plan would let the Bush tax cuts lapse at the end of this year for households making over $250,000, and the highest tax bracket—for...

Washington, We Have a Revenue Problem

Why taxes have to go up—by a lot

(Flickr/401K)
This piece is the first in a six-part series on taxation and a joint project by The American Prospect and its publishing partner, Demos. The United States has a revenue problem. Taxes at all levels of government are too low to balance budgets and, more important, to ensure America’s future prosperity and cope with an aging population. While many political and policy leaders argue that future revenues should reflect “historic norms,” this is a flawed assumption on which to base long-term fiscal planning. Tax revenues have accounted for around 18 percent of GDP since World War II, and 18.3 percent over the past 30 years. The budget released by Paul Ryan and the House Budget Committee proposes average revenue levels at this same level—18.3 over the next decade. (Although an analysis by the Tax Policy Center found that the average would in fact be 15.4 percent.) The Simpson-Bowles plan, released in late 2010, proposed average revenues of 19.3 percent through 2020. Meanwhile, the Obama...

Freelance Nation

Progressives need to make government work better by helping out entrepreneurs and the self-employed.

(Flickr/wili_hybrid)
The other day, on a Manhattan sidewalk, I ran into a former colleague and asked her what she was doing these days. She shrugged: “I’m in limbo.” When I looked her up later to connect online, her LinkedIn profile listed her as CEO of her own consulting firm. That didn’t sound like limbo to me, until I saw the fine print: “self-employed, myself only.” Scrolling through the rest of my contacts, I noticed that quite a few people in my professional orbit had titles like “president” or “founder” or “principal.” Some of these people, I know, are doing quite well; others are barely making it. These days, being your own boss can mean any number of things: running a thriving business with employees and profits, landing steady gigs as a consultant, working the same job you used to have but with no benefits, or prettified unemployment and a life in limbo. Even government statisticians are hazy about Americans without traditional jobs. The U.S. Department of Labor reports that about 15 million...

Sorry, I've Started Seeing Someone Else

After years on the rocks, Wall Street is ready to break up with the GOP.

(Flickr/Alex E. Proimos)
For more than a century, big business has counted on the Republican Party to do its bidding in Washington. Given recent debates over taxes and regulation -- in which GOP lawmakers have catered to corporate interests -- it might seem that not much has changed. The past few weeks, though, show that everything has changed. Today's Republican Party is turning out to be the worst friend business could imagine, led by politicians who don't understand the modern economy, and, worse, are ready to blow it up on principle. This spring, as a GOP beholden to the Tea Party geared up for brinksmanship on the debt ceiling, lobbyists for Wall Street and corporations begged Republican leaders to back off. These pleas were ignored, and now a few trillion dollars in shareholder equity, wealth owned primarily by the top 10 percent of the richest Americans and corporate executives, has gone poof. The story of Republican economic incompetence long predates the Tea Party. The rise of the new right in the...

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