There is broad consensus in Washington that a “balanced approach” between spending cuts, controls, and increased revenue is the only possible way to reduce our $14.3 trillion national debt and avert a Greek-style debt crisis. I share this perspective.
As the ongoing debt negotiations advance, members of Congress should evaluate the components of a debt package through one question: Will this make it harder or easier for the American people to create jobs? For my part, I have never met a job creator in Florida that has told me they are waiting for Congress to pass another tax hike before they start growing their business.
Unfortunately, there are indications some are willing to accept that higher revenues in a debt package should come from a $1 trillion tax hike, even at a time when the unemployment rate is 9.2 percent and 25 million Americans are unemployed or underemployed. I vehemently disagree with this approach and will oppose a net tax increase on the economy that makes its way into a debt reduction deal.
To be clear, new revenues are an essential component of any viable debt reduction deal. We can’t simply cut our way out of this debt; we also need to grow our way out of it. The best way to do this is by increasing the number of taxpayers gainfully employed in our economy and by easing burdensome regulations, not by raising taxes.
We can generate lasting economic growth and trillions in new revenues for the federal government through pro-growth tax reform. Sen. Pat Toomey has a budget proposal that lowers top marginal tax rates to 25 percent in a revenue-neutral way and eliminates loopholes and deductions, resulting in $1.5 trillion of additional real growth over the next decade and millions of new private-sector jobs, according to the Heritage Foundation. His budget recognizes that tax cuts and an overhaul of our 70,000 page tax code will create jobs and generate trillions in new revenue.
Net tax increases are poor economic policy. Will raising taxes on manufacturers make it easier for them to hire new workers? Will raising taxes on American energy companies make it easier to create jobs? Will raising taxes on the businesses that Democrats refer to as “millionaires and billionaires” allow those businesses to expand? Across the board, the answer is “no.” Instead, these tax increases will kill jobs in every district, state, and industry in the country. Regardless of the rhetoric coming from Washington politicians, these taxes will also have a mathematically insignificant effect on deficit reduction.
I proudly support a “balanced approach” in the context of debt reduction that grows the economy and boosts tax revenues in the process. But when presented with the option of choking our weak economy with yet another net tax increase, I will oppose it. Our country needs new taxpayers, not new taxes.
Well Senator Rubio, in the spirit of compromise are you willing to cut defense spending? Bring the troops home from Europe, Japan and Korea. I think you'd agree they're rich first world nations capable of defending themselves.
If you aren't I don't think you're serious about the deficit.
Reply to this commentLinkReport AbuseExcuse me 19% of federal spending is on defense, 24% is for Health and Human services. HHS spending is projected to be about 28% in 2016 and DOD is projected to be 15%.
Reply to this commentLinkReport AbuseEven Christine Romer has said, "....entitlements and NOT defense will totally drive future deficits".
If a former Clinton budget director [or economic advisor can't remember] gets it why can't you.
Reply to this commentLinkReport AbuseChristina Romer was the former Chair of the Council of Economic Advisors under Obama, not Clinton. She said nothing similar to what you allege she said. Here is her suggested plan for bringing the budget into balance, which sounds perfectly reasonable, but unfortunately would seem to be DOA with the suicidal folks in our current Congress: External Link
Reply to this commentLinkReport AbuseHere's the problem. Let's say we somehow manage to put 10M currently unemployed people back to work, and let's be generous and assume their wages are in the neighborhood of median per capita income: To make the math easier, call it $50,000.
At that rate, the taxable income base increases by $500B. If 25% of that is captured as taxes, we only reduce the deficit by $125B... Less than 10%
Granted, there will also be a multiplier effect as the $500B in wages oozes through economy. But will that multiplier be 10X and reduce the deficit to Bush Era levels? Doubtful.
Spending is the key to the deficit, and entitlements are the key to spending. Putting all the people back to work that have lost jobs since 2007 is a noble objective, but it won't be enough to close the gap.
Reply to this commentLinkReport AbuseIf 10M people go back to work, it will reduce spending. That's 10M people not collecting UI benefits and some smaller, but significant number of people no longer collecting welfare, food stamps, Medicaid, etc. Unemployed people effect the budget on the revenue and the spending side.
Reply to this commentLinkReport AbuseClear, bold truth spoken. Is the country listening?
Reply to this commentLinkReport AbuseFollowing Gregory's comment, statistics show that those ranked in the top 5 percent of Medicare expenditures accounted for nearly half of the growth in Medicare. Those in the top 20 percent accounted for more than 80 percent of this growth. We should focus on these "high-cost users" almost all of whom have at least one long-term ailment, e.g. diabetes. Identifying regions or even hospitals that cost much more to treat patients with similar clinical diagnoses would be one way to identify “excess” Medicare
Reply to this commentLinkReport Abusespending.
Finally, a comment that I can relate to. I sit on the executive committee of a regional health insurance plan and we have the same statistics. We spend a lot of money and effort on health screenings (to identify potential problems early so they won't become big expensive problems), wellness programs, and reaching out to patients with chronic conditions to help them better manage their condition (so they take care of themselves instead of the problem becoming bigger and more expensive). Maybe I haven't been paying attention, but I don't see Medicare/Medicaid doing any of these things.
Reply to this commentLinkReport AbuseWhere are the millions of new jobs extending the Bush tax cuts was supposed to produce? Remember, don't raise taxes or job creators won't create jobs. We didn't raise taxes. So where are the jobs?
Reply to this commentLinkReport AbuseYou must be some form of masochist. You love getting smacked around by repeating the same lies over and over again.
Nobody ever said that preserving the Bush tax cuts would create new jobs. They said that ending them would destroy existing jobs.
Learn that lesson, then go away.
Reply to this commentLinkReport AbuseHow about explaining why the economy did better in the 80s and 90s than in the last decade despite cap gains rates that at some points were twice as high as the Bush rates?
Explain that contradiction, then go away.
Reply to this commentLinkReport AbuseIf you think that the a single tax rate is the only thing that affects the economy then you need to go far away, and stay there.
Reply to this commentLinkReport AbuseReally? So you're saying that tax cuts alone won't fix the economy? That there are other, larger influences on the economy? So that we could, say, raise taxes on cap gains and still be OK?
I believe you were the one making the argument that "a single tax rate is the only thing that affects the economy."
So, go far away. And stay there. Pal.
Reply to this commentLinkReport AbuseDo you take pride in making yourself look dumb?
Of course there are other things that affect the economy. The problem is that govt controlls none of them.
The fact remains that tax cuts cause the economy to grow faster than it would have. Tax increases cause the economy to grow slower than it otherwise would have.
Live with it.
And please, wherever you go, do it quietly.
Reply to this commentLinkReport AbuseMarkW believes that if you repeat something enough (and shout 'go away' to those who disagree) it will become true.
The idea that cutting taxes on the already wealthy causes the economy to grow faster than it would have is not a 'fact', it is a 'theory'. And it is a highly questionable theory at that: e.g. External Link
The idea that lower tax rates bring in less revenue is much closer to being a 'fact' although it is still just a theory.
Reply to this commentLinkReport AbuseDude you are such a smarty. You wanted to know why I told you. Put all those lost manufacturing jobs back into the market and the economy would go crazy. You don't believe it stay where you are. Don't move.
Reply to this commentLinkReport AbuseAll the manufacturing jobs are gone. This is not the 80's or 90' we no longer have a manufacturing base. That's why. These were the people who paid the majority of taxes in that era. When everybody works in the service industry they pay no income tax. So when you swap a manufacturing job for a wal-mart job the government loses $10 to $12 thousand in income tax. So why is the economy in the dumper?
Reply to this commentLinkReport AbuseAll the manufacturing jobs are gone. This is not the 80's or 90' we no longer have a manufacturing base. That's why. These were the people who paid the majority of taxes in that era. When everybody works in the service industry they pay no income tax. So when you swap a manufacturing job for a wal-mart job the government loses $10 to $12 thousand in income tax. So why is the economy in the dumper?
Reply to this commentLinkReport AbuseAlden: yes our economic success is driven exclusively by the capital gains tax rate. Your stinging analysis mirrors the utter lack of understanding of basic economic eminating from the White House.
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