The solution to the problem is (A) or (A).

On the general subject of taxation, Matt Yglesias
defends sustained and increasing progressivity (emphasis added):

As Ed says, the argument is that “we can’t have progressives taxes because somebody’s rich uncle might not have the wherewithal to subsidize somebody’s business start-up.”

I’m not going to dignify this with a response. I’ll just note that Schramm is president and CEO of the Kauffman Foundation and I believe he was in the room when I first heard the “rich uncle” argument, so I may have been present at the creation of this particular talking point. Meanwhile, the crippling long-term budget deficits that will result from refusing to raise new revenues are not going to be doing any wonders for entrepreneurs. And perhaps more directly to the point, the lack of a guarantee of affordable health coverage is a major impediment to entrepreneurship in the United States. The status quo systematically discourages talented, skilled people form leaving jobs at existing firms in order to strike out on their own, and this is one of the things the administration is trying to address in its budget proposals.

It’s very useful to frame problems with the solution in mind.

Long-term budget deficits occur because Congress does not match spending to tax revenue. (They are crippling because Congress believes that politics is more important than either economics or accounting.) There are at least two solutions. Congress can raise new revenue, as Yglesias suggests. Within that solution, it can raise taxes on high-income Americans or lower-income Americans. Fairness and equality in treatment suggest that everyone should share the burden, if we are to raise taxes. That’s beyond my point here, so I’ll back up and reiterate: Congress can raise new revenue. Congress can also reduce spending. Is that not an acceptable option? Ignoring it reeks of a preference for social engineering over responsibility.

Nor would I write that the lack of a guarantee of affordable1 health coverage is the impediment implied. If person X quits her job to start a business, she loses her medical coverage after a certain period of (more expensive) COBRA coverage. Tying health insurance to an employer is the problem. If her business becomes successful, then her employees will be burdened as she was if they want to leave. The system is flawed and needs to be fixed because it limits individual choices. We should begin our search for a solution from that starting point. Changing our treatment of health insurance to resemble other decisions individuals make for themselves independent of how they earn income is a possible solution Mr. Yglesias ignores.

The general theme within Mr. Yglesias’ framing appears to be a push for equality of outcome rather than equality of treatment. Equality of outcome will never happen in practice for precisely the reasons that his proposed solutions are possible in America. The political atmosphere makes it possible to treat others “more equal” by pitting one group against another, with the politicians conveniently acting as final arbiter. Endorsing that system is at least an implicit statement that control is fine as long as you are the one in control. It’s either that, or the person proposing such a statement is ignorant. I don’t think Mr. Yglesias is ignorant.

1 I will ignore the issue of affordability here. Such a subjective word requires a much deeper analysis, including the trade-offs, that I’m not interested in addressing in this post. Let it suffice that Mr. Yglesias and I probably agree very little on the matter.