Daily Archives: November 16, 2012

Taxes, spending cuts, and denial: Politics as usual

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Unless you’ve been in a coma for more than 12 months, you know the Administration has proposed a plan that is heavy on tax increases for households making $250,000 or more per year.  Republicans want to see deep spending cuts before they even consider taxing the rich.  We may never see anything that pleases them enough to agree to the tax hikes on the wealthiest Americans, but there’s no current danger of anyone testing that theory.  In spite of Republicans digging their heels in on the tax hikes issue, the other side of their arguments makes the most sense. Spending is the driver of debt and deficits, not tax credits.  They’re not even in the same universe.  Spending has exceeded revenues for over a decade, and the ever-increasing pace of deficit spending continues to threaten the future of the country.  The threats are not philosophical or reputational, they’re fundamental.

If there is still no painfully realistic plan for balancing the budget barely a month before the sequestration deadline, it can only mean that politicians aren’t serious.  The messaging signals another short-term deal that will push consequences out to 2015.  And, you know what?  That pisses me off.  I’m sick of a broken system that safeguards long and lucrative careers to so many liars who consistently spend on our credit card and leave us holding the bill for generations.

My plan is simple, Washington.  Cut.  Cut it all.  Cut it all equally.  Cut MY benefits wherever necessary.  I’m willing to live with benefit reductions to programs to which I’ve contributed over the years.  Slimmer Medicare benefits and smaller Social Security checks?  We can deal with it.  Keep pandering and you’ll keep dividing us.  Treat Americans respectfully, and you’ll get legitimate agreement to take the pain now rather than the giant mushroom cloud later.  Will it hurt?  Hell, yes.  If we do it equitably, the pain will be dispersed, and there’s some comfort in that.

But, don’t you dare look into the camera and tell us about sacrifice when you can’t muster up enough courage in D.C. to stop the entitlements and special interests merry-go-round that passes for government.

 

 

The rich need to pay their fair share. So make them pay .00023!

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In an October report, Adam Looney of The Tax Policy Center helped clarify some of the major debate issues in the fiscal cliff discussion.  In contradiction to common perceptions, the Administration’s current proposals would continue to extend certain tax cuts to the top 2% of US taxpayers, but at a rate of about 30% of the cost of extending cuts in their current form.  In the top 1% of taxpayers, there are essentially 3 tiers of revised tax cuts in the President’s proposal, and these differ significantly in tax break percentage.

The dollar impact?  From the TPC’s analysis, “the heated debate over whether to extend all of the tax cuts or whether to extend merely the vast majority largely concerns whether to extend an extra $310,000 in tax relief to the wealthiest 120,000 taxpayers or whether we should instead make a relatively small down payment toward fiscal sustainability.”  That’s right.  The math works out like this:  $310,000 x 120,000 highest income taxpayers = $37.2 billion dollars a year.   That’s an impact to the federal deficit of a whopping 2.3 100ths of 1%.  Tough to imagine?  Picture 16,250 balls in a pool.  Now, remove 4.  Ta-dah!  But, surely it must impact annual government spending in a profound way.  A whopping 1%, and that’s a bit over 3 days’ expenses for Uncle Sam.

Am I a protector of 1 percenters?  No.  I’m not a single agenda person.  I try to share verifiable information that clarifies issues in ways that rhetoric can’t.  And, I smell a Hawaiian rat.  If the goal is debt and deficit reduction why is the message always “the rich need to pay their fair share”?  It turns out the Administration’s idea of that is a pimple on the…well, you get the idea.  On the other hand, the President’s political foes reject tax-based proposals and push for tougher spending cuts that have the potential to advance short and long term fiscal responsibility.  This round goes to the opposition.