Tuesday, April 26, 2011


If you choose not to decide, you still have made a choice
-Rush, "Free Will"

While we're having a national debate on how to deal with the vast debt and deficit levels the federal government has run up through irresponsible spending, sometimes the message gets a bit muddled. What is needed is a simple, clear statement of our alternatives that reaches out to everyone.

One of the more common talking points on the left is that we should go back to Clinton-era taxation and we'd be able to solve our problems. It is held as a matter of faith on the left that tax cuts resulted in these budgetary problems rather than massively increased spending.

Megan McArdle at The Altantic tackles this and points out a problem with this argument:
In order to raise taxes to the 25% of GDP that Kevin [Drum] wants, all taxes need to rise by at least a third, not just income taxes: excise taxes, corporate income taxes, payroll taxes. And we’re talking about rising from the Clinton level, not from the current effective tax rate level. That’s going to be a lot more than 5%.
. . .
In other words, for the poorest 20% of Americans (who make less than $20,000 a year, with an average income of $11,500), taxes go from about $660 to about $1320. For the middle quintile (making an average of $50,000 a year), taxes go from around $7,000 to over $12,000. For those in the top quintile, with an average income of $167,000, taxes jump from a $41,000 to $62,000.
Ms McArdle points out that this has a tangible, direct effect on incomes. For someone making 10,840 a year would make 10,180 a year after this tax increase. Those making $43,000 see it drop to $38,500, and the higher tax bracket is hit even harder; dropping from $125,000 to $105,000. These examples give a good vision of the left's tax future.

Which brings us to the simple statement of the choices we face:

Which would you rather have, cuts to your budget or cuts to the federal budget?

Because that's what it comes down to. Either you or the federal budget is going to have to pay, and if the federal budget doesn't come down, eventually you will pay the price.

You can either cut the federal budget, which has grown by more than all budgets combined before it in the last two years and was already too gargantuan, or you can cut your own budget by paying more in taxes.

For those of you who think only the rich are going to pay more taxes, take a closer look at that graph at the top. That image shows where the taxable income is, and that mountain in the middle is the middle class. That's most of you who are reading. There's not enough money in the rich to fill for the crater our economy is spiraling around; we could tax everyone making $100,000 a year or more - hardly rich, especially in bigger cities - and still not make enough money to pay for this year's deficit alone.

When the left says "go back to Clinton era taxes" they mean "raise everyone's taxes" because that's what the Bush tax cuts affected: everyone's taxes. And as Ms McArdle notes, even that isn't enough, they'd have to tax more.

Even if you only did tax the rich, that would affect everyone's wallet anyway. If they raise taxes on the rich, that hurts the economy, slows growth, slows employment, raises prices, and results in cuts to your budget, even if your taxes don't get raised.

Let's be reasonable here. Does anyone, anywhere, think that a congress that for decades has spent incrementally more and more each year will somehow find Jesus and stop spending so much when they raise taxes? Giving congress more taxes with a promise to reduce the deficit instead of just blow it all is like giving a junkie a bag of drugs with the promise he'll flush it all. Raising taxes just gives congress more money to play with.

So that's what we're all faced with. What will it be, America? Will it be your budget that gets cuts, or the federal government?

*This originally ran at the Washington Examiner Opinion Zone.

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