THEY WOULD DO ANYTHING FOR DEBT REDUCTION, BUT THEY WON’T DO THAT…. There was an interesting online poll at MSNBC.com yesterday, asking respondents, “Does the president’s budget take the right steps toward addressing the federal deficit.” The question, of course, presupposed that deficit reduction deserves to be prioritized.
As Joan McCarter noted, the options to choose from were telling. The unscientific survey had four options. The White House (1) is making worthwhile cuts; (2) should do more to cut entitlements; (3) should do more to cut defense spending; or (4) should cut spending, but not too much in a weak economy.
As Joan asked, “Gee, how about tax increases, anyone?”
The political discourse has been successfully manipulated: deficit reduction is at the top of the national to-do list, above job creation and everything else. But the conversation is exceedingly limited — the notion of raising taxes to close the budget gap isn’t even supposed to be considered.
By historical standards, this is bizarre. Democratic and Republican officials have traditionally considered tax increases necessary evils, used to keep deficits from spiraling out of control. It’s why Reagan raised taxes seven out of the eight years he was in the White House, and why his tax increases were approved with plenty of Republican votes on the Hill.
But notice how far standards have shifted. GOP officials argue that the deficit and the larger debt have reached the level of a national crisis that threatens the very fabric of civilization. Told that some modest tax increases would quickly help make a significant dent in our fiscal problem, however, they suddenly paraphrase Meatloaf: “We would do anything for debt reduction, but we won’t do that.”
I’m glad to see President Obama is more sensible.
President Barack Obama’s budget proposal … includes tax increases for oil, gas and coal producers, investment managers and U.S.-based multinational corporations. The plan would allow Bush-era tax cuts to expire at the end of 2012 for individuals making more than $200,000 and married couples making more than $250,000. Wealthy taxpayers would have their itemized deductions limited starting in 2012, including deductions for mortgage interest, charitable contributions and state and local taxes.
The budget plan also includes tax cuts aimed at middle- and lower-income families, including a big Earned Income Tax Credit break and a popular business tax credit for research and development. All told, “the budget proposal would impose about $730 billion in new taxes on businesses and wealthy individuals over the next decade, while cutting about $400 billion in taxes on middle-income families, the working poor and other businesses, for a net tax increase of about $330 billion.”
Now, no one seriously expects congressional Republicans to go along with such a plan, but that realization itself is telling — these reasonable, targeted tax increases wouldn’t undermine the economy, but they would make a big difference in reducing the deficit, the crisis the GOP pretends to care deeply about. And yet, the knee-jerk reaction was instantaneous.
Americans needs to make sacrifices, Republicans say, to help fix the budget mess Republicans created. But the GOP’s friends, including the wealthiest Americans and oil companies, must be shielded from such sacrifices. Indeed, leading GOP officials spent yesterday demanding deficit reduction in the morning, and pushing tax cuts that would make the deficit worse in the afternoon, unconcerned about the contradiction.
I don’t imagine the White House’s proposed tax increases will go anywhere, but I’m glad they’re in the plan anyway, if only to add a touch of sanity to an otherwise foolish debate.