Over the past weekend much of the eastern seaboard of the United States dealt with the flooding, wind and rain from Hurricane Irene. While some places were less affected than predicted, others, like Vermont and New Jersey are dealing with the worst flooding in 100 years. The Federal Emergency Management Agency (FEMA) has, by all accounts, responded brilliantly, feeding thirteen towns in Vermont totally cut-off from food and the world, in helping devestated townspeople in New Jersey find a place to sleep. Unlike the massive gaps in responding to Katrina in 2005, and perhaps because of it, FEMA has shown just how well a coordinated, well organized response can be done, and has been done, a hundred previous times in our nation's past, and probably just in the past 30 years, by the Federal government. Our fellow citizens demand (and rightly) that our Federal government coordinate and control a holistic and unified response to ensure equal treatment and help. Like many other similar services, the efficiencies a government can bring to bear cannot be replicated by any private entity, nor is any private entity willing to try.
A recent and outstanding article in the USA Today described this very well in saying, "The difference between what Americans demand from their government and what they are willing to pay for it is called... 'The Deficit'."
In some people's zeal to cut their tax bill, they often back-handedly refer to government "spending" as out of control and wasteful when in fact the vast majority is neither "out of control" (it increases and decreases in reaction to need) nor for the most part, is it wasteful. Most government programs operate at a fraction of the overhead of their private peers. Profit is not a bad thing, but often it drives cheapening of quality, and of course drives up expense passed along to the consumer.
Regardless, when Americans finally wake up and recognize they have demands, like Social Security and.. FEMA, perhaps some day they'll understand where the spending comes from, and then maybe someday, they'll also accept that revenues have to exist to pay for those services they demand. Taxes are essentially at their lowest level in 60 years, it is not spending which is out of control and irresponsible (in this time of great need), but rather it is tax cutting which has gone mad. People want services, but they irresponsibly don't want to pay for them.
People want services, but they irresponsibly don't want to pay for them.
ReplyDeletePerfect parsing of the conundrum facing this nation. When I was a kid I seldom heard people criticizing the paying of taxes and, as a result, the streets and highways were in great shape, as were the parks, bridges and schools.
Apparently we've become a disgruntled, narcissistic society that makes us look like spoiled kids to our past generations.
"Taxes are essentially at their lowest level in 60 years, it is not spending which is out of control and irresponsible (in this time of great need), but rather it is tax cutting which has gone mad."
ReplyDeleteYes, the last time overall federal taxes were this low was 1951. Now I will say it the only way Tea Party-ists can understand: THE LAST TIME OVERALL FEDERAL TAXES WERE THIS LOW WAS 1951!
A few things can easily be done about this. First of all, certain tax loopholes (for corporations and individuals) should be closed, which will generate significant windfalls without raising taxes on the vast majority of the American population.
Secondly, the top 2% of earners now pay LESS federal income taxes (35%) than they did during the vast majority of the Reagan Administration. I suggest moving their tax bracket back to where it was during the economically-strongest of the Reagan years, which is either 38.5% or 50.0%. (Yes, folks, it was at 50.0% during much of Mr. Reagan's time in office, including AFTER his 1981-1982 tax cuts went into effect. When it was lowered, it was done so only because Mr. Reagan agreed to simultaneously raise capital gains taxes, which also affect top-earners. So in some ways, one set of taxes on top-earners was replaced with another.)
My suggestion would be to raise the top tax rate to 38.5% and leave it there for a while. (Tea Party people cannot possibly disagree with this, could they? I mean, seeing as Mr. Reagan is their economic and cultural god, right? Um....) This would still be below the level that top earners paid during the Clinton Administration (39.6%), the vast majority of which I would point out were economic boom years.
(By the way, the first time in modern history that the top tax rate was lowered beyond 38.5%, which occurred for a few years, most of which were during the Bush Sr. Administration, the result was the recession of 1991-1992. After it was raised again to the upper-30s, the economy revived in a sustained manner.)
Other Americans should see no changes one way or the other to the taxes they pay at present in order to avoid more defaults, foreclosures, and so forth, which would reverberate negatively throughout the economy. (Unlike the wealthiest folks, many middle class Americans would feel the squeeze badly at present.) We can re-evaluate this in two years in order to see if new adjustments need to be made, but not until that time.
This will hopefully give Congress time to stop acting like petulant children leveraging pie-in-the-sky, overly-simplistic ideologies and start working on other things that can help the economy--such as tax reform and simplification (a lengthy process), a focus on federal construction money to fix our crumbling infrastructure (due in large part to a present lack of tax revenue), and the like.