Is it time for Republicans trying to avert the fiscal cliff to give up on protecting the Bush tax cuts for the wealthy in exchange for entitlement reform?
Maybe, says former Senator Bob Bennett in an opinion piece in the Deseret News.
President Barack Obama wants to raise revenue by increasing taxes on households earning more than $250,000. The financial arguments for his position are weak — there aren’t enough such households to have a big impact on the debt — but he will prevail because all he has to do to get his way is nothing.
No deal, and taxes go up automatically on Jan. 1, giving him what he wants for the rich. Then on Jan. 2, he can propose that Congress immediately pass a law putting rates back down for the non-rich. If Republicans don’t pass it and there is a new recession, he will claim that it was their fault.
Maybe a better question would be: do Republicans still have a choice?
In many respects, the debate over taxes–raise them on the rich! Lower on the poor! Middle class! Get rid of deductions! Close loopholes! Reform the tax code!–is important, but really misses the point of what is behind the fiscal problems our country is facing. At the root of it all, the problem isn’t the tax code–though I’m all for reforming it, simplifying it, and making it more flat–the problem is that we are spending more than we are paying in taxes.
Let me repeat that with some emphasis: we are spending more than we are paying in taxes. It’s a national problem carried and caused by each and every American. It isn’t about the rich–who are paying more and more–or the poor–who aren’t paying at all, but are more reliant on the government than ever before: it’s about all of us.
- The Democrats: “Raise taxes on the wealthy!” comes the hue and cry from the Left, regardless of the fact that taxes cannot be raised high enough to avert future fiscal crises. In fact, they may aggravate them. No matter how many times the left side of the political spectrum tries to attack the wealthy, to say that they are not paying their fair share, the fact is that the wealthy are paying an increasingly large percentage of all taxes received by the federal government. As I’ve noted in an earlier post, the 1950s, which saw record high tax rates on the very wealthy, also saw the wealthy supporting only 27% of the government’s budget. Today, the wealthy support 51% of the federal budget.
- The Republicans: “No tax hikes!” is a great slogan, and indeed, Republicans are right that taxes slow the economy and hurt entrepreneurs, employers, and families. But they can’t fight tax growth with one hand, and spend more with the other. One of the major mistakes of Republicans during the George W. Bush Administration was the passage of Medicare Part D, a massive expansion of government spending without corresponding revenues (also known as “taxes”). It didn’t help that we decided to invade and occupy Iraq and Afghanistan at the same time. My point is that you can’t fight taxes and create spending at the same time and expect the books to balance at the end of the day.
- And the rest of us Americans: Like it or not, whether you are political or not, whether you voted or not, you too are part of the problem. Our culture’s changing priorities is a part of the problem. Think about your own spending and lifestyle habits: do you go to the emergency room instead of the physician? Do your lifestyle choices keep you healthy and physically fit? Did you take a job–any job–during the recession, and then, when it wasn’t enough to pay the rent or put food on the table, seek help from family, church, or charity first, before seeking government aid? Are you saving for your retirement or are you expecting that Social Security and Medicare will provide for you in your “golden” years? And to the wealthy: do you give to a lobbying group that assures your industry gets sweet-heart deals, tax carve-outs and deductions, or protection from competition? For all of us: do you make an effort to be aware of the effect local elected officials actions will have on your home, neighborhood, city, or state?
In large part, I believe that the growth of the mountain of debt our country faces in the coming decades is not merely the fault of politicians in Washington, D.C., but also the result of changes in American culture where we demand more, and more, and give less, less not to our country, but to our neighbors and to our communities. As we fail to prepare and practice self-reliance and interdependence with our neighbors, we hand government bureaucrats more responsibility for things that would have, just a generation ago, been handled by neighbors helping one another.
The costs of Medicare, Medicaid and Social Security are among the heaviest that our country will need to burden in the coming decades, but reforming them is the work of politicians, and work that they can feasibly accomplish. The long-term future of American prosperity depends on it.
On the other hand, the effects that are created by an American culture that creates people that ask “what can my country do for me?” is an effect that can be deterred only by asking “what you can do for your country.” And that question can only be answer by some serious introspection–and personal change.
- Sen. Stabenow: Middle Class Always Asked to Carry The Brunt (crooksandliars.com)
- Stephanie Cutter: Republicans to Blame if Country Goes Over Fiscal Cliff (breitbart.com)
- Corker: Tax Hike on Wealthy Could Give GOP an Edge (blogs.wsj.com)
- Graham to Obama: How about ‘manning up’ on entitlement reform? (thehill.com)
- Former Obama Economic Advisers: We Need Entitlement Reform (nationalreview.com)
- What Sort of Entitlement Reform Would Republicans Trade for Higher Tax Rates? (txwclp.org)
- Unless Republicans change the media’s attention to entitlement reform, they will lose the fiscal cliff debate. Here’s how (aei-ideas.org)