On July 19, 2012, Ezra Klein writes on his Wonkblog that there are two questions worth think about:
1) What do entrepreneurs owe the society that created the conditions necessary for their success?
2) What level of public investment is consistent with the maximum amount of new firm formation?
The first conversation is interesting, but ultimately unanswerable. After all, while entrepreneurs owe much to societies, societies also owe much to entrepreneurs. Untangling that web of obligation, gratitude and dependence is probably impossible.
The second conversation is more useful, and more relevant to the actual choice voters are being offered in this election. Mitt Romney’s claim, broken down to its core components, is that the path to broadly shared economic growth is to reduce public investment in order to further cut tax rates, and so his policy proposal is to slash public investment and cut taxes. Obama’s claim is just the opposite: He thinks we have too little public investment in order to assure broadly shared economic growth, and so he would raise taxes on high-income Americans to protect public investments.
What their policies will affect is who benefits from the fruits of entrepreneurship. Romney would substantially increase the rewards that accrue to successful entrepreneurs by cutting marginal tax rates, and he would pay for that — and reduce the deficit — by substantially cutting programs that serve the poor, like Medicaid. Obama, conversely, would raise marginal tax rates on richer Americans and use the proceeds to pay for things like health care for the poor.
It would be nice if this debate was about the kind of economy we’d like to have, as both sides largely agree that the objective is broadly shared growth, and so the question would be an empirical one.
