“The Bush administration has shelved a report commissioned by the Treasury that shows the US currently faces a future of chronic federal budget deficits totalling at least $44,200bn in current US dollars.
The study, the most comprehensive assessment of how the US government is at risk of being overwhelmed by the “baby boom” generation’s future healthcare and retirement costs, was commissioned by then-Treasury secretary Paul O’Neill.
But the Bush administration chose to keep the findings out of the annual budget report for fiscal year 2004, published in February, as the White House campaigned for a tax-cut package that critics claim will expand future deficits.” — “US ‘faces future of chronic deficits’,” The Financial Times, 5/29/03
Look, I’m one of those people who is personally going to get more out of this tax cut than many of the rest of you (yeah, I know. Can’t figure it out, either). But at the same time, I’ve got a public library that I have to contribute books to so it has an astronomy book from the last decade, a public school that’s in an academic emergency, a state that is tearing through social services and rocket-launching the cost of its public universities because it’s running a huge deficit it’s not allowed to run, a social security system that’s going to be insolvent by the time I reach retirement age, and deficits that mean it’s highly likely my kid and her kids are going to be saddled with unfathomable debt.
I don’t want any more tax cuts. I personally don’t need any more tax cuts. If this was 1980 and the highest federal marginal tax rate took more of my take-home pay than I took home, then yes, I could see why I might want a tax cut. But it’s 2003, the highest federal marginal rate last year is 38% , and my effective federal tax rate (meaning the amount I actually pay) is less than 20%, which means the large majority of Americans pay even less than I do. Throw in my tax indebtedness to Ohio and my local government, and I’m still cruising along at about 25% of my total income.
I can afford this. And, in order to forstall crushing debt collapsing on subsequent generations, I’m perfectly happy to kick in a little more if necessary. Not a whole lot more, mind you. I want to play with my own money and I don’t want to get back to a situation where we have 70% marginal tax rates. But at the very least, I don’t see the point right now in paying less.
(Bear in mind also that being self-employed I pay quarterly and I pay my full Social Security deduction on top of the taxes above. So I pay more taxes more often than most of you. And yet I’m still saying this.)
Yes, yes, I know — more money back to the people so they can boost the economy, blah blah blah. But let’s not lie and say this most recent tax cut is about the people, okay? I mean, yes — if we really want to help the working guy, let’s slash his taxes by more than a measly one or two percentage points and a few hundred dollars and avoid giving the rich double that in percentages and of course multiples of that in dollars. Throwing the working guy pennies while the wealthy are rolling out wheelbarrows of cash isn’t my idea of a smart thing to do. Hell, even Warren Buffett thought the details of the most recent tax cut proposals were appaling. In the story referenced there, Senator Charles Grassley says that Buffett doesn’t have any appreciation for the trials of the middle class, which is (excuse the pun) rich, since Buffett was suggesting giving the middle class much more of a tax break than the budget Grassley was pushing. And anyway, when it comes to money, who should you believe: They guy who invested his way to being worth $36 billion, or the guy with the government paycheck?
There are many things I don’t like about the Republican Party, but one of the things that galls me the most is how it’s demonized taxation, and how it’s consistently run deficits since Reagan and yet manages somehow to position itself as the party of fiscal responsibility. Yes, there is a point of too much taxation, and at times in our past we’ve been there, and it was not at all a bad thing for the GOP to point that out. Good on it. Now isn’t one of those times, and even if it were, the rich would not be the people I’d focus the cuts upon. The answer to everything is not “tax cuts.”
As for raising deficits, it’s just another strategy to keep Republican financial ethos in control even when they inevitably get booted from office, since the Democrats, dim bulbs that they are, will spend most of their time in power trying to correct the damage the Republicans wrought. Republicans in my estimation spend a lot of their time exploiting the persistent Democratic position of befuddled niceness, and this is just another example. The Democrats need to have their huevoes drop into their sacs and take it to the Republicans (who, like all bullies, whine like mewling kittens when the tactics they use are used against them), but that’s another rant entirely.
To be entirely honest about it, I lump people who believe that Republicans are fiscally responsible in with the people who believe in astrology and that the Earth was created in six days, in that whatever other positive qualities they might have, they have a fundamental defect in their ability to process reality. Mind you, this does not mean I expect Democrats to be correspondingly fiscally sound. That’s a false opposition. But honestly, people. We have a three administration track record of Republicans gulping down debt like they’re dipsomaniac sorority girls at Free Margarita Night, and then calling for yet another round of tax cuts. How much more evidence do you need?
Here’s my position: Call me crazy, but I expect a certain level of government service. It’s not dizzingly high, but it’s there. I’m comfortable with funding a certain number of things I don’t necessarily agree with with my tax dollars in order to get certain services others might not agree with. I’m comfortable spending money on services I don’t need to use personally — welfare, unemployment, the military — because I think they provide for a better quality of life for my fellow citizens at large. And for all of that, I’m willing to pay a fair amount, and the emphasis here is on “fair.” I don’t want to pay more than is necessary, and I want to make sure what’s being spent is accounted for — I remember reading recently that Pentagon accountants don’t know where a trillion dollars they were given went, and that’s just no good — but for the quality of life and government services I expect, yes, I’ll pay my taxes. Happily.
The thing that Republicans have managed to do over the last couple of decades is establish, nearly solely, that taxes are a burden to us all. Well, maybe so. But they’re also an obligation, and a responsibility, and not nearly enough attention is focused on that fact. I do a reasonable amount of charity giving, because I can and because I think I ought to, but there is a whole lot I can’t do personally that the government, with its aggregate power, can. It’s a useful tool.
I like the idea that some of the money I send to my government goes to keep a library open in the little town I live in. I like the idea that somewhere in my little town, a kid who’d otherwise go hungry is eating dinner bought with food stamps that I paid for. I like the idea that a sailor on an aircraft carrier goes on shore leave with money I put in his pocket. I like the idea that people are researching diseases and robots are exploring space with money I chipped in to pay for them. As I mentioned, there are lots of things our government is doing with my money I wish it wouldn’t do, but that’s the trade-off and overall I think the balance is worth it.
All of that stuff takes money. That money comes from me. I accept the responsibility of paying that money. More of that money comes from me than from the average taxpayer. And I say, I don’t need any more tax cuts. I need a government that can pay for what I want it to do without chronically shifting the financial burden of its existence on to my kid. I’m willing to pay for that kind of government. I’m also willing to vote for it. And quite obviously, I think you should be, too.
Update: “WASHINGTON, May 28 A last-minute revision by House and Senate leaders in the tax bill that President Bush signed today will prevent millions of minimum-wage families from receiving the increased child credit that is in the measure, say Congressional officials and outside groups… Because of the formula for calculating the credit, most families with incomes from $10,500 to $26,625 will not benefit. The Center on Budget and Policy Priorities, a liberal group, says those families include 11.9 million children, or one of every six children under 17.” — “Tax Law Omits Child Credit in Low-Income Brackets”, The New York Times, 5/29/03
But the dividend and capital gains taxes got decreased! Isn’t that nice. I bet all the families with incomes from $10,500 to $26,625 just can’t wait for the boost in their dividend and capital gains checks.
Second Update: I’m done a follow-up on this Whatever here, discussing in greater detail issues about Social Security/Medicare, deficits, and reader comments. Oh, go on. You’ve read this far already.