This may well be my most unpopular posting yet, for I am writing in favor of higher income taxes.
So why would I be writing in favor of raising taxes?
As we all know, there is a very serious budget deficit in this country. There are many Congresspersons, especially those supported by the Tea Party movement, who are determined to reduce the deficit by reducing the budget. But here is the problem: in their effort to reduce the budget they are suggesting cutting off funds for some very important programs.
We all agree that wasteful or duplicate programs, and there certainly are some of those, need to be eradicated. But such cuts would make only a small dent in the deficit, so other cuts are necessary. (Some of us would like to see significant reductions in military spending, but that is not likely to happen.)
Unfortunately, many of the cuts now being proposed would negatively impact needy people here in the U.S. as well as in others parts of the world. On April 1, a group in D.C. fasted and protested to oppose "the proposed budget cuts that would eliminate $7.6 billion from domestic programs that impact low-income women and children. Other cuts,” they said, “would potentially eliminate feeding programs for 18 million of the poorest and hungriest around the world.”
Instead of cutting programs for the poor, the tax cuts for the wealthiest two percent of Americans should surely be eliminated. The extension of those cuts this past December was a big mistake. Why in the world should billionaires be given tax cuts and then programs to help the poor be eliminated because of the lack of funds?
Further, profitable corporations should be required to pay taxes. As you have probably heard, General Electric had billions of dollars of profits in 2010 but paid no income taxes at all. The same was true for Exxon Mobil, Bank of America, and many other large and wealthy corporations in the country.
After the tax cuts for the wealthiest Americans are eliminated and large corporations are required to pay taxes, if there is still need for further revenue to reduce the deficit, as there likely will be, then taxes should be increased for all of us except for those who have minimal incomes.
The federal deficit must be reduced and the budget needs to be balanced, but not on the backs of the poor. If it takes a tax increase to maintain the government programs that provide vital assistance to needy people in the nation, especially children and the elderly living in poverty, then so be it.
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Leroy
ReplyDeleteThanks for looking in a balanced manner at this countries financial situation. The poor, the teachers, public employees, and others did not get us into debt. We cannot use them to get us out. We must pay taxes as part of the process. I love this country, not all it does, but certainly the efforts at justice and compassion. As I mail my taxes today, I celebrate that I can contribute to a better world. I am glad Head Start serves the families in my community. I love listening to NPR. I celebrate the services that Planned Parenthood is providing for women and families. Press On! David
Bravo for your clear, concise statement for social responsibility and justice. And a tip of the hat to the honorable David for his comment.
ReplyDeleteBTW: I just posted this on FB along with a link to an article by the Economic Policy Institute: "Since the U.S. began its rightward tilt in 1979, the average rate of overall taxation for all Americans has gone from 22.2% to 20.4%. Not much tax reduction there, folks. But for the top 1% of America’s households, it’s gone from 37% to 29.5%; for the top 400 households—get this!—from 26.4% to 16.6%."
The concept is not bad, but the bureaucratic organization is horrible. Congress works on baseline budgets which require spending the budget to justify the bureaucracy. They also have spent FICA as it came in rather than setting aside a trust fund - making Social Security and Medicare/Medicaid ponzie schemes (including during the "balanced" budgets in the Eisenhower and Clinton years). Every time a new tax is initiated, Congress immediately spends the income on programs - They have no concept for living within their means. The President was unashamedly part of the part of this process both as Senator and President.
ReplyDeleteThe President's bipartisan commission on debt reduction presented a very balanced approach to solve the problem of both cutting expenditures and increasing taxes. It was ignored by the President and Congress.
Until the Congress can prove that they can responsively live within their means, and use new taxation exclusively for debt reduction, no new taxes should be imposed. The are not a trustworthy organization.
A baseline of minimum 1% net tax payment should be a standard for the franchise, regardless of income. Give everyone a stake in the process. And give Congress net 5% pay cuts for each year they fail to live within a truly balanced budget, and no pay raises until the debt is retired. They should also forfeit all special perks for office other than necessary business expenses for representing their constituents.
We are looking down the barrel of national bankruptcy in a few years, or will face massive inflation to pay it off, much like Zimbabwe and Argentina attempted. And China already has us over in a tight spot as our primary lender.
That said, we need to pray for our representatives daily. They need wisdom from above.
I agree with raising rates to balance the budget rather than where Congress is primarily looking. I also find how "tax cuts" and "tax increases" are used to be interesting choices.
ReplyDeleteI had a post on a previous topic commenting that reversing ten year old tax cuts is a tax increase. What is not commented on is a new 10% rate was implemented for the lowest earners as part of the tax cuts for the rich. That benefited everyone, and because of the volume, reduced revenue more than the tax cuts for the rich. I am not arguing for removing that rate, but I don't think the use of terms to incite class warfare is the right answer.
It would be best if we could simplify income tax laws so it does not take me a week with software to complete my filing. That means elimination of the loopholes that the richest use to avoid taxes, which would result in actual tax liabilities making more sense. I also think the mortgage interest deduction should be eliminated. I believe it incents bad behavior in some people and is unfair to renters, who tend to have lower incomes.
Unfortunately, the same Congress that builds all the benefits into the tax code has to remove them, as well as approve any other intelligent budget changes. I am pessimistic that will happen any time soon.
In addition to the above comments, I am happy to report that I have received e-mails from seven other people who expressed strong ("wholehearted," "100%," etc.) agreement with the above blog posting.
ReplyDeleteActually, there were also two others (for a total of nine) who expressed agreement--and to this point no one has expressed clear disagreement.
ReplyDeleteSaw an amazing statistic about the net increase of the wealthy over the past ten years which would lend itself to your point.
ReplyDeleteHowever, paper and pencil show that even taxing that bracket 100% would still not address the national debt problem we are facing. There will still have to be major cuts in all areas, especially accelerating entitlement spending due to baby boomers aging, along with significantly increased taxation for all. The Fed, and the President's bipartisan commission are still correct.
Borrowing to spend was fun while it lasted, but the time to stop and pay the piper has arrived.
Chris Matthews had a very interesting interview with US Rep. Emmanuel Cleaver of Kansas City this week regarding the debt ceiling vote.
ReplyDeleteHe asked Rep. Cleaver if raising the ceiling without substantial cuts would put us in the same position as Greece in the near future. The Congressman replied that Greece has no central bank, being a part of the Euro system, and because we have a central bank, we can print unlimited amounts of money to pay our debts. Matthews then asked him if that wasn't what Mugabe had done with Zimbabwe which would yield similar results. The Congressman acknowledged that, but said we are much larger and not at that point yet. (China has already warned that they will not lend money if we go that route.)
The point is that neither political party wants to face the facts and the repercussions. Taxes will need to be raised on all citizens (even a 100% tax on the wealthy is not nearly enough), with dramatic cuts in spending, including defense and entitlements. The President's commission should be taken seriously. Sadly, we are already facing the next election cycle, with no statesmen to lead us.