May 12 2011
“It is the spending, stupid”-beat them over the head with this chart.
The very large, but permanent and worsening, budgetary impact of the “Bush tax cuts” — which when first proposed back in the pre-9/11 era, were supposed to end in 2010 and were in response to what back then seemed to be the “problem” of a burgeoning surplus in federal accounts! Since “extending” those cuts just sounds like business as usual, I think it is hard for most people to envision the profound and growing effect they have. The chart above helps toward that end — and doesn’t even go into how heavily those cuts are skewed to the “haves” of society.And, as a bonus half-point, the chart clarifies that budget problems would be on the path to self-correction, if the Bush cuts had lapsed as originally planned.
Look carefully too at the net impact of the wars on the deficit. What the chart doesn’t tell you though is the ancillary costs of the wars-in increased energy prices, transportation costs, unecessary expenditures for current operations ( that prevent force modernization) and most importantly the attendant loss of tax revenue associated with those added costs. This burden is being primarily borne by the middle class and not by assholes like Paul Ryan and others who want to sacrifice real people on the altar of supply side Jesus. Combined together, foolish tax cuts with a state of permanent war are doing more to destroy American competitiveness than any other cause. Your friendly neighborhood tea bagger is either too stupid to recognize this, or simply is too selfish to care. ( “I’ll take option two, there, Alex”).
“But the debt is robbing our children!”
Oh really? Then how do you explain the fact that without doing anything except letting the Bush tax cuts expire-the debt stabilizes? Thus allowing-if you reform the tax code and make some vertical spending cuts ( including Defense) the debt to go down. Without sacrificing Medicare or Social Security.
Sorry URR-this what you and the rest simply don’t get. It is not, “that the government is taking your hard earned money”-it is that it is misdirecting the money from the programs that make the most impact on the most Americans and using it to enhance the earning prospects of the top 1%. And all the whining about “small business” ignores the fact all companies, large and small are not being held to a standard of contributing to the social welfare of the nation. Like it or not-if you want to “control spending” someone has to address the growing income inequality. If for no other reason than the fact that in the long term-it restricts growth a heck of a lot more than any one particular government policy or regulation. In fact-it was the lack of regulation that created the need for TARP and the recession in the first place.
Any who talks about “sacrifice” and “cutting spending” without including tax reform-like John Boehner does-is telling you a lie. We can fix the financial mess we are in-without forgoing the investments that make America a better and different nation, but it requires and honest conversation about what is and is not “shared sacrifice” Boehner in his effort to suck up to the Tea Party is not doing that.
John Boehner’s new line on the deficit negotiations is that raising taxes — by which he appears to also mean closing tax expenditures — “is off the table. But everything else is on the table.” This is a bit like telling your doctor, who’s worried that you’ve gained weight and are out-of-shape, that exercise is off the table, but everything else is on the table. Well, it’s nice that you’re prepared to diet, but you need to exercise, too. Otherwise, you’re not going to get where you need to go.
And without revenue, we’re not going to get where we need to go — at least if you think where we need to go is towards a balanced budget. Over the past 10 years, the Bush tax cuts have increased the deficit by about $1.3 trillion. They’re the single largest policy contributor to our recent deficits. Due to the growth of the economy and the creep of the alternative minimum tax, they’ll cost the Treasury closer to $4 trillion over the next 10 years. They’re the single largest policy contributor to our projected deficits.
There is a way out of the wilderness though-and no one’s tax rates have to go up. The amount of taxes paid will though.
So here is a way to curb this loss of revenue without eliminating any individual deduction: limit the total tax saving for any individual to a maximum percentage of his total income. Daniel Feenberg of the National Bureau of Economic Research, Maya MacGuineas of the New America Foundation and I have been studying a reform that would cap the tax reduction that each taxpayer could get from tax expenditures to 2 percent of his adjusted gross income.
What’s the result? Taxpayers with incomes of $25,000 to $50,000 would pay about $1,000 more in taxes; those with incomes of more than $500,000 might pay $40,000 more.
The cap would affect more than 80 percent of taxpayers. Although they would continue to benefit from the mortgage deduction, the health insurance exclusion and other tax expenditures, their tax savings would not increase if they took out a larger mortgage or a more expensive insurance policy. Similarly, they would not be penalized and get a lesser tax benefit if they scaled back their mortgage or their health insurance premium by moderate amounts.
We found that a 2 percent cap on tax expenditures in 2011 would raise tax revenue by $278 billion—nearly 30 percent of total projected income tax revenue for this year. The extra revenue would increase over time, reaching nearly half of the projected future fiscal deficits.
We are going to have to do it sooner or later-might as well get on with it now. That’s less “socialist” than the current system of corporate welfare.
Phib-that’s what your readers would be better off understanding. Sadly, thanks to the noise machine of the right, it would appear fewer and fewer of them are able to.