REFLECTIONS

Posted on March 6, 2011

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HIGHER TAXES WILL FIX ECONOMY

In politics, simple phrases can hide complex agendas. The budget debate offers the perfect stage for mounting “home truths” that are not quite true. Let’s air a few examples.

Big government, not the Bush tax cuts, created the deficits. Yes, higher spending including the wars plus a deep recession, helped fuel the deficits, but so did the schemes to lighten rich people’s tax burdens.

The Bush tax cuts were scheduled to expire January 1, 2011. Had congress let that happen, projected deficits for the next 10 years would be $3.3 trillion lower than they are, according to the Congressional Budget Office.

Congress extended the Bush tax cuts for two years. But after that time is up, lawmakers can fix much of the deficit problem by doing nothing. That is, sitting back and letting the Bush tax cuts go poof.

But aren’t these tax cuts necessary for long-term economic growth? hardly. Economists have found “virtually no evidence in support of the Bush tax cuts as an economic elixir,” writes former Reagan Treasury official Bruce Bartlett.

Social Security is driving the deficits. For more than a quarter century, American workers have been paying extra taxes into the Social Security Trust Fund to cover current Social Security deficits. he fund’s assets are invested in U.S. Treasury securities. The fund will grow as soon as unemployment drops to 6 percent.

The problem is Congress has stiffed the American workers and spent the fund’s money.                                                                                                                                             You can’t tax your way to prosperity. How appealing this is for those who don’t like paying taxes. They want someone else to pay for government services.

Republican Rep. Paul Ryan said, “You really can’t borrow, and spend and tax your way to prosperity, but unfortunately, that is exactly what this budget does.”

It must have slipped Wisconsin Ryan’s mind that in n2003, he voted for the famously reckless $1 trillion Medicare drug benefit, every penny of the cost borrowed.

As chairman of the House Budget Committee, Rep. Ryan surely knows that one way to avoid borrowing is to pay for things the old-fashioned way, with taxes.

Now that’s simplicity we can believe in. Like it or not, we must pay taxes for what we get in the way of government services.

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