Posted on 06/20/2003 3:09:34 PM PDT by bruinbirdman
Some lawmakers say it so often, you’d think it was a mantra: We can’t afford to cut taxes, because doing so would increase the federal deficit.
After a tax-cut measure passed the House of Representatives recently, Rep. Martin Frost, D-Texas, claimed the bill’s sponsors wanted “to spend $82 billion of the Social Security Trust Fund and drive America even deeper into debt.” Sen. Olympia Snowe, R-Maine, vowed to fight any tax cut that would increase the deficit.
It’s true that we’re facing a record budget deficit. That’s partly because of the brief recession that began just as President Bush was taking office. But the major reason is one that lawmakers don’t want to talk about: Their own out-of-control spending.
My Heritage Foundation colleague Brian Riedl has found that the federal government will spend more than $21,000 per household this year—a record amount in peacetime. In fact, Washington will spend $520 billion more this year than it did in 1999. That’s a lot more money than the recently enacted tax cut so many lawmakers attacked as being “too expensive.”
Where is the money going?
Almost a quarter of the new spending is funding big increases in federal agriculture subsidies (the farm bill), federal health programs (other than Medicare and Medicaid), federal directives on education (“no child left behind”) and unemployment compensation.
Another fifth is being spent on defense. And while that seems reasonable in the post-September 11 world, relatively little of that spending is directly linked to the war on terrorism.
Tens of billions more are pouring into a series of small- and medium-sized programs that already receive more than their fair share of government dollars.
Yet even as they throw our money around, many lawmakers say they want to return to a balanced budget. Well, doing so means establishing priorities.
According to Riedl, all Congress has to do is limit the average annual growth of mandatory spending programs to 4.6 percent per year—instead of the 5.6 percent proposed by President Bush—and freeze non-defense discretionary spending at the 2003 level, and we could have a balanced budget by 2008.
Some lawmakers will howl: “Cut 1 percent? Impossible.” Nonsense. They’ve done it before, when self-imposed budget caps forced them to do so, and they can do it again. (And let’s remember that we’re talking about cuts in the rate of growth, not actual cuts.)
The balanced budget that results would include a prescription-drug benefit for Medicare recipients, would fully fund the President’s defense requests, would pay for the recent war in Iraq and would still allow Congress to enact a bigger tax cut than the one that took effect in May.
And further tax relief is critical. Before the government spends a dollar—whether it’s used to help a poor family, buy a new weapon or build a highway—it must first tax or borrow that dollar from you and me.
But when the government returns a dollar to taxpayers with the right kind of tax cut (such as a capital-gains cut), it encourages true economic growth. That’s because as people work, save and invest, the economy grows. That growth, in turn, boosts tax revenues.
It’s exactly that sort of cycle that gave us the budget surpluses of the late 1990s. Of course, back then lawmakers held spending increases to “only” 3.5 percent annually, as opposed to today’s 8 percent.
Congress’ goal should be to get the economy moving again. Lawmakers can help do this, and balance the budget, if they’re willing to curb spending and pass sensible tax cuts.
We just have to set priorities. Clearly, we can’t afford not to.
The headline provideds enough smoke and mirrors to make the article seem sincere. But thankfully, the government doesn't tax by 'household'; large corportations and the wealthy pay most of the taxes. The actual "average household" pays only a fraction of that $21,000. per year figure.
News flash!!
Corporations don't pay taxes, they factor in their tribute in the price of the goods and services that the "average household" pays. Beyond that, it is the stockholder that pays a fine for the privledge of owning a healthy business.
Yes, the article does talk about what they spend, but the headline is a red herring designed to dupe readers into believing that the average household pays $21,000. in taxes. But either way, it's a typical distortionist header designed to take the reader's attention away from reality. The government doesn't spend money "per household", it spends money on national defense, national highway programs, NASA, agriculture, social security, educational grants, federal employees, health agencies, etc, etc. And the average household pays nowhere near $21,000. a year for these services. So why break it down that way?
They still have to pay taxes on their profits. Deducting their legitimate business expenses is not only fair, it's absolutely necessary for any business to survive. It's a huge fallacy to believe that corporations don't pay taxes. Many a business has crumbled because of the heavy taxation.
Yes, and thank God the GOP is the Party of "smaller government, less intrusive government, and enforcing the sovereign borders of the United States of America"....(hack, cough, bleech)
However you want to run the numbers it's very destructive and we're all paying dearly in many more ways than one.
Not to be contentious, but the customer has always had to pay for the goods and services that he procures, this isn't exactly a new concept. But a business can only charge so much before pricing itself out of the market. I've owned a business, and I've seen what taxes can do to net profits. If you're saying that ultimately the consumer pays for both the product and the business' taxes you have a valid argument, I suppose. But by that same formula, you can argue that the consumer also pays for the company's greed. I believe that, (apart from the devastating effects of 9-11), greed is partly responsible for our poor economy and the 'correction' on Wall Street. Everything was overvalued because too many CEOs, Corporations and other profit takers got too greedy.
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