Notes & Asides, 10-26-11
After my column praising Ron Paul’s efforts at solving America’s debt crisis, commenter joshua4234 asked, in so many words, for me to take a look at the Congressional Progressive Caucus’ budget, which eliminates the deficit in 10 years.
Though there is much I disagree with in the plan, I do agree with some of it.
The budget includes removing American troops from Iraq and Afghanistan, which is a good thing, both for foreign policy reasons and budgetary reasons.
It also significantly raises taxes on the rich. It is reasonable to think that higher taxes are necessary, but raising the rate for millionaires to 45 percent would be counterproductive. Such a drastic tax increase would inevitably hurt our economy and job creation. The best way to raise revenues would be something akin to what the Simpson-Bowles commission proposed: close loopholes while lowering the rates a tad.
However, as far as entitlements go, the Caucus just kicks the can down the road. Social Security, Medicare and Medicaid all have the structural problem that there are more old people receiving benefits than there are young people paying in to the system. This is the main problem with our ballooning debt, and the Progressive Caucus refuses to address it.
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Well at least you said something. You always seem to state your positions like “raising the rate for millionaires to 45 percent would be counterproductive” or “such a drastic tax increase would inevitably hurt our economy and job creation” without any justification. The rates have varied over the years and as far as I’ve seen there isn’t evidence that increasing taxation of personal income of millionaires 5 or 10 percent does anything except help us balance the budget. What job would be taken away by a multi-millionaire having a few less hundreds of thousands in his accounts and instead funding government programs? To convince progressives you need something more concrete than assertion. And more important tax increases would be for things like capital gains and dividends or the estate tax. This is one place where the richest of the rich are getting away with murder, so to speak.
Besides containing a bunch of other horrific things that hurt the middle class, the Simpson-Bowles plan closing loopholes and lowering tax rate won’t help. We’ve seen it time and time again where only a few of the planned closes of loopholes get implemented and the others die in transit, with the same or new loopholes opening in a few years, while the tax decrease stays forever simply resulting in less revenue. If you want to attempt to close loopholes, I’m on your side to try, but adding more tax cuts on top is ludicrous.
And as far as entitlements go, yes it pushes it down the road, because we have bigger issues like massive unemployment and a struggling middle class with an economy tanking. Social security is in the green with payroll taxes for years. It can take in less than it pays out for a while because it planned for that and massed a surplus of over a trillion. It’s not its fault the rest of the government can’t keep it’s books clean. And when that time comes social security can be fixed SO easily by increasing the cap of income taxed for it, and it’s SO popular that it would receive massive support, except by millionaires and billionaires and their puppets in congress.
And I definitely think medicare and medicaid need changing, but I think that should be a separate issue taken on specifically a little later, and the arguments can be had on how to fix it at that time.