Raising taxes is not the (whole) answer.

http://news.yahoo.com/obama-gop-leaders-lay-down-markers-budget-deal-080338986.html

The real issue that Obama hardly ever talked about during the election is spending. Raising income taxes on “the richest of the rich,” or even on those making over $250k, would raise about $42 billion per year according to my rough estimate. Let’s assume that increasing capital gains tax rates will add another $80 billion in revenue per year. With a deficit of $1.3 trillion, that’s just under 10% of our spending. Not exactly a drop in the bucket, but also nothing close to an effective solution. In fact, if Congress would have to double the income tax on every single American to come close to making up the current budget deficit. 

Many will also say that ending the wars will decrease the deficit. Well, Obama ended the war in Iraq, and what happened to the deficit? It stayed exactly the same. Why? Because he simply used those funds elsewhere. And that’s his plan for Afghanistan, too. In his own words, he plans to bring our soldiers home from Afghanistan and use the money “to do some nation-building here at home.” 

So what’s going to give? What needs to happen? The answer is simple: spending needs to be cut. Unfortunately, I don’t think anyone is confident that it’s going to happen under Obama.

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About originalbosfan1

Like the title of my page, I am bitterness personified. I decided after reading another stupid article about another stupid person that I have to get my thoughts out there. My wife is sick of hearing me rant, so now it's the internet's turn to listen. Thank you very much for your time. That is all. Seriously. You can go now.
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6 Responses to Raising taxes is not the (whole) answer.

  1. leesure says:

    A well written and reasoned argument…but I had little more confidence that the other side would have cut spending either. The real shame of it is that we are, as a populace, addicted to the candy of government money. Neither side can get elected if they were to actually do their jobs and act responsibly. So the Democrats will boldface tell you they plan to take from ‘them’ and give it to you, while the republicans will pay lip service to cutting spending, and then do the opposite. As surely as the sun will rise tomorrow morning, you are correct about the need to cut spending. And just as surely, neither major party will accomplish that.

    • Good points indeed. Obviously, the issue of trusting politicians to do what they say they are going to do is a hindrance to anyone. On a purely 2-party basis, however, I would argue that the GOP is much more likely to address spending issues than is the Democratic party. This is due to a variety of factors, including learning from the mistakes of the past (i.e. George W. Bush), as well as an extreme reluctance to raise revenue by raising taxes. These factors leave them with little room than to address our spending issues.

      I’d also point out that the Republicans are thus far the only party to propose actual, tangible spending cuts over the last few years. While something like Paul Ryan’s budget proposal may have been too extreme, it certainly represented a starting point and a willingness to reduce government spending. Democrats, on the other hand, have taken a difficult spending situation and made it much worse. In fact, they haven’t even passed a budget in the last 4 years, let alone proposed any actual spending cuts. Even further, they have a nasty habit of increasing spending (on Obamacare, for example), but then arguing that it’s really a decrease (because of phantom higher health care costs in the future that they’re offsetting).

      Finally, for all his talk about reducing spending, Obama never mentioned any specific measures during the campaign. The closest he got was saying we would end the war in Afghanistan, but in the same breath admitted that he had other plans for the money we were spending there. With recent history taken into account, I think most people would agree that while not certain, it’s much more likely that the Republican party would be looking to tackle spending in the next few years.

      • leesure says:

        Certainly they lay claim to being the party of lower spending, but the facts don’t bear that out. If you look at the last 40 years (http://www.usgovernmentspending.com/past_spending) spending as a percentage of GDP has consistently gone up under Republicans (Nixon/Ford, Reagan, Bush I & II) while it has trended lower under the D’s (Carter, Clinton and, after 2009, even Obama) Granted, Obama’s spending is still higher than it was under anyone previously, but it is trending downward after the massive bailout (that was signed under Bush II) and the stimulus. By no means am I complimenting Pres. Obama for his fiscal prudence…just pointing out that recent history runs counter to the republican talking points that they are the party of fiscal responsibility.

      • I would like to point out that spending way more money than anyone in history in your first year in office, then not spending quite as much (but still more than anyone in history) during subsequent years should not be looked at as “trending lower.” If you look at the following chart, you’ll see what I mean. What Obama did is move the bar way too far in his first year, then claim to be fiscally responsible by coming down from there.
        http://advisorperspectives.com/dshort/guest/Shedlock-120828-Government-Spending-and-GDP.php

        Unfortunately, the general trend in spending is upward. Why is that? Because we’ve got a system of entitlements in place that keeps growing every year. Social Security and Medicare are eventually going to bankrupt the country. And during the campaign, I only heard one candidate even offer an idea of how to reform these programs so that they have a chance of survival.

        As for your points, I’m not seeing enough of a trend that can be attributed to any one party or another. Most economists would agree that these charts show, with a general upward trend, that spending (as a % of GDP) rises during recessions and decreases during booms. I’m certainly not aware of any statistical analysis that states that Democrats are more fiscally responsible than conservatives, especially recently.

  2. leesure says:

    Ahhh…but likewise, you won’t be able to find any that suggest that Republicans are more fiscally responsible than Democrats…that was my original premise…they are both standing behind the candy counter doling it out to willing recipients. There are certainly differences…the Republicans do tend to try to lower taxes, but without corresponding spending cuts leading to greater debts. The Democrats would happily raise taxes…you know, on ‘Them rich folks’… to pay for their spending. They would, however, spend it in different places. The Democrats want to give it out like crack on a school yard, making generation after generation who have no idea what it means to live off their own efforts…with the benefit creating more lifelong Democrat voters. The Republicans would love to take away Big Bird and Welfare and spend it all on ‘defense’…seems they have never seen a weapons system that we didn’t ‘need’. Whichever side you may be on, the common ground is that spending is never going down until we either do go bankrupt or a third party voice of reason emerges.

    • Well I’m not sure you could say that spending is never going down. There have been many instances where historically high levels of spending have been reigned in and lowered. And during the last few years we’ve been at the absolute historical peak of spending. So if you’re claiming spending is never going down from where we’re at right now, I would have to disagree.

      I also agree that Republicans have historically spent money on different things than Democrats, and historically haven’t been as conservative or fiscally responsible as they would like you to believe. However, I did see a lot of effort being made on their side to fix those past mistakes, and that was promising. In fact, we had a candidate with both business acumen and a track record of balanced state budgets running on a fiscally conservative platform. Would Romney have gotten us on the right track? Nobody knows for sure. But I’m much more inclined to vote for the candidate who is prepared to face our fiscal challenges head on rather than one who buries his head in the sand and keeps spending our money.

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