Howard Gleckman’s August 4 TaxVox post on tax increases and small business reminds me of the debate over the Clinton deficit reduction proposals in 1993. Then, as now, a new Democratic President proposed to raise tax rates on the highest individual income taxpayers. Then, as now, Republican opponents portrayed the proposal as a tax increase on small business that would kill jobs and stop the recovery. A June 24, 1993, Washington Post story by David Hilzenrath headlined, “Income Tax Hike Stirs a Debate on Jobs Impact; Administration Rejects Claims Small Business Would Be Hurt,” reported, “As the Senate began considering President Clinton's deficit-reduction plan yesterday, Republicans charged that the income tax increase he says is aimed at the rich would hit small businesses and jeopardize their growth.”

Given that columnist Paul Krugman relied on Tax Policy Center estimates to level claims that Congressman Paul Ryan is a “flimflam man” and that Ryan’s plan to address our fiscal problems is a “fraud,” I think a defense of the Congressman is in order.

Washington is about to spend months trying to answer the wrong question. Instead of reprising their partisan, tiresome, and largely unproductive argument about what to do with the Bush tax cuts, President Obama and Congress ought to be asking a very different question: How do we build a tax system capable of generating the revenues we need to fund the government we want in the most efficient and fair way possible?

Senator John Kyl’s (R-AZ) recent insistance that tax cuts should “never” be offset with tax increases got me thinking about the governing philosophy behind this argument. In part, it is based on the idea that tax cuts are always good for the economy while tax increases are always bad. I’ll leave that one for another day, and instead focus on a second premise: The best way to cut government spending is to cut revenues.

Kudos to Marty Feldstein, who this morning called for scaling back tax expenditures. These are highly-targeted tax breaks that are often little more than spending programs in mufti. Lawmakers of both parties love them, which is why they will reduce federal revenues this year by nearly $1 trillion, equal to almost the entire federal deficit.