Friday, December 10, 2010

Let the Tax Cuts Expire

Here's a novel idea. Why not let all the tax cuts expire. Every single one of them. And then reduce the tax deductions in the corporate, business and personal income tax for everyone too. Maybe it's time we bit the bullet and paid our way into the future instead of the continual hope, and political promises, that we can and will grow our way out of the budget deficit and national debt.

As we've seen with Clinton we can keep taxes higher and grow the economy. And we've seen under Bush the exact opposite. We not we can't balance the budget with tax cuts, not with paying for the interest on the debt, two wars, entitlements, military operations and capitol investment, and discretionary spending. We can't balance the budget on the 15% of the discretionary spending.

We have to look at the two wars, our international military commitments, the Department of Defense (DOD) operations budget, the DOD weapons systems and equipment replacement programs and our DOD contracts. The DOD clearly has to reduce it's total budget by 15-20% as a goal over 3-5 years. And then do it again then. It's that's simple. We can't keep spending more on the DOD than all the other countries in the world combined.

And we have to look at increasing revenue to the Social Security Trust Fund Congress keeps raiding for money. We need to restore the Trust Fund and then get new money into it. Several ways come to mind initially. First, raise the income ceiling for all contributors by simply removing the ceiling. All income faces this tax.

Second, make all working undocmented workers and illegal immigrants citizens under an amensty program with optional contributions for past employment and credit. This will get rid of employers hiring them under false pretenses for cheap labor. It's makes them part of being Americans and American workers. And we get their income tax too.

Third, limit social security payments to rich people who have retirement anuities and post-retirement income above a threshold of say $75-100K. After all they don't need the extra income despite paying into it. It's their fair share to others during their working years. It's time the rich paid into it for everyone.

All of these, as some economists have noted, would make the Trust Fund solvent for quite a few decades and longer. And we don't have to reduce entitlements except maybe looking at the small percentage of fraud. Money not paid to one false claimant is money to one earned claimant.

I say this because as a federal retiree I can't get both without compensating my federal annuity. Even if I qualify for it (still short about a year-plus of credit) my annuity will be reduced the corresponding amount of the Social Security payment, meaning I can't get any more money over a ceiling despite paying into both systems. And if I can't, those wealthy shouldn't either.

We have to look at the discretionary spending but more with an eye for programs better down at the state or local level. I'm for the federal government doing the big and national work and support those programs benefitting the nation as a whole. There isn't much waste in the non-military discretionary programs, but there are some better served by corporations, businesses, states and local efforts.

It's clearly we have over-commited our federal government to too many programs, but I think if we tackle the former solutions (DOD, SSN, taxes, etc.) we can keep if not add to the discretionary programs to help everyone in the areas of healthcare (like adding a public option), education, environmental protection, agriculture, consumer protection, and so on down the list of work which clearly needs more money.

We have to look at healthcare costs. The Healthcare Reform Act didn't do this. It didn't and won't address costs which it handed to the for profit corporations in the healthcare and health insurance industry. They're still in control except for those states which have oversight commissions. We need to deal with and resolve costs to save Medicare, save families, and save taxpayers.

We have to look not at providing healthcare but look at where the extra money is going or wasted and then also look finding ways to control overall costs and all increases. If corporations can impose "managed care", we can impose "managed costs" to keep both sides on the same plane and minimize the problems and excessive costs.

We have to look at our international commitments both military aid and bases and aid programs. Sadly, maybe we need to tell the world, for a while anyway, we simply can't afford to help everyone. We've seen this in Afghanistan as billions are wasted to corruption and profiteering.

We have to look at getting corporations back to the US to put their taxes into our government. We should find ways to encourage them to return and discourage overseas headquarter to evade US taxes. If they want the US consumer, then they will pay the taxes appropriately. And if they don't move back, then restrict their access in the US as a "foreign" company. And then make them pay accordingly.

And as a demonstration to the American people, Congress need to rein in its own spending in several ways. Freeze the salaries and benefits for the same length of time they freeze the salaries of federal workers. Freeze their total funds for their office similarly to their salary freeze. And then freeze the White House funds too. Show solidarity with the rest of us.

In short as has been noted, we can't balance the budget with tax expiring tax cuts alone, with spending cuts alone, or with growing the economy alone. We need all and more. With a national debt of $50,000 per person and growing we can't afford not to seriously get us on the road to financial solvency with not only at least a balanced budget but also paying down the national debt.

It's our only hope and future. We've maxed out the government credit card. We can't just get a new one, but it's time we decided as a nation and a people to do this in the lifetime of our children and grandchildren. We're so far in debt we can't see the sky anymore, and it's time we stood on solid, level financial ground, and we need to start with the real sacrifices, not political ones or surficial ones.

So, not only let all the tax cuts expire, let's look at adding new taxes, cutting DOD spending and other measures any household would do to get solvent. We're the family and we've mortaging future generations farther than we can see anymore, and we know they won't be able to pay. Let's restore hope they can with our sacrifices now.

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