The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker said on Tuesday.
The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker said on Tuesday.
as predicted by Krauthammer the day after the health care bill passed…
This would at least be consistent. Few may remember now, but George W. Bush put through the tax cuts that led to the current deficit on the premise that, as the budget was now balanced, and there was a surplus (because of the work of the previous presidential administration), the government should not be keeping the surplus, which belonged to the citizens. When the tax cuts led not only to the disappearance of the surplus, but the same kinds of record deficits that had originally appeared because of the tax cut policies of the Reagan administration, consistency at least should have demanded the repeal of the tax cuts.
In the world in which most of us live, one is required to pay one’s bills. It is only in the bizarro logic of the United States where citizens demand that the government provide services, including not only social services, but also military and police protection (thus to stop the inevitable guns or butter argument in its tracks) that one gets things without paying for the price.
Re # 2
Very valid points. I have been a frequent and vocal critic of the Bush Administration which I believe will be judged rather harshly by history. However while I concede that taxes must go up, that needs to be the last recourse, not the first. Before taxes are increased the budget needs to be attacked not with a scalpel, but rather a meat cleaver.
Political reality of course clearly indicates that there are limits to how deeply things can be cut and what can be done away with. Setting aside the opinions of those who want to return the United States Government to its role under either Jefferson or perhaps the Articles of Confederation as unrealistic we need nonetheless to make some very tough decisions. And the time to make them is now.
What are we prepared to live without in terms of government services and social safety nets? And to the extent that we identify things a majority of Americans are not prepared to live without then we need to ask how we are gong to pay for it? Americans typically want all kinds of goodies. But when the subject of paying for those goodies comes up the enthusiasm tends to wane.
Christ is risen!
John
#3, What are the “goodies” of which you speak? I’m thinking of a day to day basis and don’t see how, except for the military that I support, I’m receiving “goodies”. The fact that I will one day maybe get back the SS taxes I’ve been paying? That’s mine and I should. Medicare? What’s left after the changes that seem already entrenched after just a couple of weeks of the Health Bill again seem just. What I do feel burdened by are the taxes beyond these things and the fact that there are who knows how many pockets being lined for the pork projects that local citizens could provide if US taxes weren’t so high. I simply don’t see a “goody” mentality in my day to day world. I do agree: cut the you know what out of the budget and send a few hundred thousand back home from Washington.
Re # 4
Pure food and drinking water, public roads and transportation infrastructure, police and fire services (which often receive Federal aid), national parks and museums, environmental anti-pollution regulation, workplace safety laws, if you have driven a car in the last forty years or so you are the beneficiary of Federal auto safety laws, if you have ever bought aspirin or any other drug you are the beneficiary of laws regulating safe drugs, if you have ever patronized a public library – most receive Federal aid. I could type all day. But I think I’ve made my point.
Christ is risen!
John
P.S. to my #5
That’s not a defense of frivolous spending. It’s simply pointing out that anyone who doesn’t live in a cave has benefited from various Federal programs and laws. There is A LOT that needs to go from the Federal budget though.
Christ is risen!
John
William Witt, while I agree wholeheartedly with your second paragraph, your first paragraph perpetuates unfortunate myths. First, while Bush was certainly no fiscal conservative, today’s deficits are mostly due the to last year’s stimulus legislation. For a quick refresher, review [url=http://www.washingtonpost.com/wp-dyn/content/graphic/2009/03/21/GR2009032100104.html]this chart from last year[/url]. Note that deficits declined from their peak in 2004 as the economy recovered from its post-9/11 recession (which was the first time since the early 70’s that US manufacturing output actually [i]declined[/i]). Sadly, the effect of last year’s stimulus was about the same as stimulus packages during the Bush and previous administrations: not measurable.
And notions about the halcyon days of budget surpluses in the late 90’s ignores the fact that the Federal Government did not account for the future Social Security outlays it’s obligated to make, counting IOUs to itself as assets. We only had surpluses because we excluded so much.
Here’s hoping we don’t end up like Greece, but I have little faith that the politicians in charge today have the wisdom or fortitude to avoid it.
#7–You are right on. The deficit was caused by 9/11. History proves tax cuts ALWAYS increase revenues; Congress just always spends the increases. Social Security is not bankrupt. Congress spent all your Social Security taxes on other things. One other point everyone misses is that Clinton cut the defense budget to the bone. All of the upgrades in vehicles and equipment we have had to do since 2001 should have been in the pipeline already. But Clinton stopped them all. And I have no idea what deal Clinton made with the Arabs, but don’t forget that gas was less than 90 cents a gallon while he was President. That allowed the economy to grow unfettered. Finally–here’s an idea–CUT SPENDING. We can start by all Republicans swearing off earmarks; but the GOP Senators won’t even agree to that. I keep hearing we can’t live witout new roads etc. If we were a family, and we were out of money, we would cut spending. We need a Presiadent who will sit down with Congress and every interest group and say “I know your project is worthy, but worthiness is not the issue. We are out of money. Cut your budget.”
#7 and #8, thanks for correcting the mistatements in #2.
#2. So, the tax cuts that allowed my to keep more of my own money is now being transferred back to the rightful owners. Got it!
Of course, taxes must be raised to cover the enormous deficit, much of which is in addition to baseline government expenses. As for timing and size of the deficit, I find the graph located [url=http://pajamasmedia.com/instapundit/79840/]here[/url] informative.
With reference to state functions, a large portion of state budgets (the majority in my state’s case) now comprise matching funds, which are required by the federal government when it uses tax dollars to fund its projects or benefits provided within the states. This insertion of federal control is often wasteful, and removes control from the states.
We should scrutinize the benefit and cost of the federal government on a regular basis – for example, has the Dept of Energy made us more independent? Have energy expenses gone down? What is the purpose of a federal Dept of Education, and are we a better educated nation?
But the current tripling of the deficit is unusual, and will have serious implications.
🙄
In an environment where the government trumpets a ‘budget cut’ that is actually just a smaller increase than they had planned, I am highly skeptical that the existing ‘aristocrats’ in our Federal government can change their habits short of a major catastrophe. Gird up your loins, boys and girls, the US is going to have a financial meltdown, it is simply a matter of time.
This is so much like an addict not being able break the addiction without hitting rock bottom – and even then many addicts don’t improve or end up dying.
We need a 12 step Government/Bureaucracy Anonymous program that can help out Uncle Sam before he OD’s. I am not sanguine about this situation at all. Whenever you have a government where people who contribute nothing can vote to give themselves money taken away from the contributors to society, you are sowing the seeds of destruction.
The problem is not due to “the rich” not paying enough taxes because of tax cuts. They pay infinitely more than their fair share.
The problem is caused by the fact that, as exacerbated by the present administration, one-half of households in the U.S. pay NOTHING.
“Nearly half of US households escape fed income tax
Recession, new tax credits have nearly half of US households paying no federal income tax”
http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1
When you have a system where half of the participants pay nothing (have “no skin in the game”) and yet are taking out all the benefits as described by other posters above, the system must collapse, eventually.
#5, you could go on and on but don’t. The problem is that our Government has gone on and on when a practice of local community provision and spending could do just as well. I won’t argue that some things need oversite but look what it did for us this go around: A near catastropic recession/depression. And the answer? Spend more, make more programs, interfer with the private sector, etc. Those answers you listed are hardly pure and besides that, who is it that’s providing the money for such “services”? American tax payers. Who are about to be taxed into oblivion with the VAT before much longer. That will not tame anything. But it will inflame!
I find it interesting that Democrats now turn to the deficit and the dire need to raise taxes to cut it, after they have spent taxpayer money like drunken sailors on shore leave.
Re # 16
Billqs,
As a former sailor (10 years USN) I resent that analogy. I may have gotten drunk a few times (cough cough). And even been profligate with money. But it was MY money not someone else’s.
Christ is risen!
John
14,
So… We tax the poor? After all, much (I don’t know how many) of that 50% paying no income tax is paying no income tax because they have no income.