The fiscal cliff: Moderate Obama vs. liberal Obama

LIB: We can both broaden the base and raise the top tax rates. The economist Peter Diamond, whom we tried to appoint to the Federal Reserve, has calculations suggesting that the top tax rate should be 73 percent. That is close to the 75 percent rate that President Hollande of France is now pursuing.

MOD: Are you nuts? I don’t want to become France.

LIB: We don’t have to go that far, but we can go higher than where we are now. California just created a new tax rate for married couples earning more than $1 million a year and singles earning more than $500,000. Maybe the federal government should do the same thing.

MOD: California is not exactly a role model for sound fiscal policy.

LIB: True, the state has had its problems. But it is now coming to grips with them, in a progressive way.

MOD: Let’s face facts: It’s impossible to resolve our fiscal imbalance just by taxing the rich more. The gap between spending and revenue is too big. If we are going to avoid much higher middle-class taxes, we need fundamental entitlement reform. Also, we need to keep Speaker Boehner on board. Even if he wanted to, he could never get the House Republicans to agree to a tax increase as large as you want.