Keeping score on which party is the least helpful, most divisive or biggest bunch of lying liars is a waste of time. Similarly, it makes more sense to find the commonalities in the Simpson/Bowles, Ryan and Obama budgets than it does to look at individual flaws. The “gang of six” is supposed to be doing that right now.
Democrats
Mark Warner (Virginia)
Dick Durbin (Illinois)
Kent Conrad (North Dakota)
Republicans
Saxby Chambliss (Georgia)
Mike Crapo (Idaho)
Tom Coburn (Oklahoma)
When it comes to the rhetoric, Ryan comes off as the adult with details while the President – now running for office – is demonizing and vague. Obama says that Republicans want to take money from the poor and the elderly and give it to billionaires. Despicable as that is, it will probably get him a second term. Will Paul Ryan be rewarded by Wisconsin voters for his part or be dumped?
Polls show clearly that most of us are flatly unwilling to pay for the government services we demand. Republicans are sounding the alarm but won’t admit that entitlements are here to stay and therefore taxes will go up. Democrats are worse; they are telling us that we can have our entitlements if Republicans will just agree to tax the rich. The President says that adding 30 or 40 million people to Medicaid saves money.
Nobody tells us the truth because we make it clear that we don’t want to hear it. The middle class will pay off this problem, this time and every time. If we don’t step up soon, our kids and their kids will be paying off our irresponsibility. The rich will happily pay more than they are now but there are definite limits and they can leave. The little guy stays and pays. And the rich didn’t cause the problem, our elected officials did – meaning, we did.
What’s Missing From The Great Budget Debate: Seriousness
by Robert J. Samuelson Washington Post, April 17, 2011
But let me return to the progressive concept of ignoring spending and raising taxes.
Super Rich See Federal Taxes Drop Dramatically by Stephen Ohlemacher Associated Press, Apr 18, 2011
The IRS tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007 was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.
Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent. Some of us pay higher sales tax than that.
There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010. The tax code provides a total of $1.1 trillion in credits, deductions and exemptions – an average of $8,000 per tax filer or about $14,300 per tax payer. Some lefties want to eliminate all deductions and not reduce the rates. How would that feel?
The mean American income is about $42,000 per year. That person pays about $4,000 a year in federal income tax. If we eliminate all deductions, that person would pay $18,300 in taxes or 44% of income. The wealthy would pay far more. Trust me, there are countries where this happens and there are plenty of progressives that think it should happen here too.
There is substantial bipartisan support for reforming the tax code, particularly for corporations, by eliminating deductions and lowering the rates. The only real arguments are about whether to raise revenue, by how much and when.
On the individual side 77 million American workers pay income taxes and 63 million don’t. If we asked for an additional tax payment of $10 a month from non-payers and $100 a month from payers, we’d raise $100 billion a year. A good idea if it’s combined with spending cuts at 2 or 3 to 1.
[Note, I’m speaking in averages; actual rates would be progressive and the wealthier would pay more than the less wealthy. My personal view – not in any of the budget plans – is that everybody should pay something even if it’s a buck. The poorest workers that get paid by the tax system can accept a dollar less and so on up the ladder.]
Unfortunately the annual deficit is currently $1.3 trillion and climbing. If we made the $100 billion tax increase and cut three times that much spending, the annual deficit would still be $600 billion. See the scope of the problem? We just don’t want to think about it.
In political speak, Ryan wants to “lower the rates and broaden the base” while the President wants to “decrease tax spending”. Ryan says we’ll keep tax changes revenue neutral and the President says no tax increases on ordinary folks. They’re both lying. We have to pay more taxes and when we do, we’ll still have to cut many times that much spending just to address the current deficit.
But there’s more. There are two more critical things to remember after looking at these frustrating numbers:
1. Getting the deficit to zero still leaves us with over $14 trillion of debt to pay off.
Said another way, to pay off $14 trillion in debt, each tax payer must shell out an extra $3,600 per year for the next 50 years – that’s extra money, over the new taxes to keep the deficit at zero.
But while we argue, the deficit is not zero; the debt is rising by $1.3 trillion per year – about $17,000 per year per tax payer.
2. The deficit is still growing because we have done nothing about root causes.
In addition to debt, we have $40 trillion in unfunded entitlement liabilities. That means things such as boomer couples paying Medicare $171,000 and drawing out $530,000. Because we have not addressed entitlements, each year the deficit will grow ever larger.
Don’t listen to lefty goofballs who claim we will grow our way out of trouble. All the budgets expect the economy to improve and as more people work and companies earn more profits government revenue will grow. This is good but the economy cannot grow fast enough to cover $40 trillion in old promises that are coming due.
Fundamental changes are needed. It will mean higher taxes, vastly less spending and structural changes to entitlements. Seniors should not be spared; nobody should be. The alternative is ruin.
Fifty years is more than two generations. Our kids will be paying off our national credit card and their kids too. How does that feel? Do you care if it gets worse?
See why people are excited? See why popular denial is a problem? See the fundamental failure of leadership?
Let’s wake up folks. We must stop shooting the messenger and start punishing the lying liars. Politicians: get results or get out.
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