Friday, May 27, 2011

Deficit Hype is Overblown

The deficit talk is hyped though. In recessions deficits are inevitable. And, anyway, deficits are a corporate norm.

When did the Republicans change from the party that created big deficits to the one that makes them an issue? When they dumped them on the next president. Democrats are always left with the messes Republicans create, and are always cleaning them up. Clinton took Reagan and Bush's enormous deficits and turned them into a surplus. The deficit from Bush Jr. though is much bigger and the financial catastrophe he created much worse.

The fact is America's rich are undertaxed at the national level, and it's worse at the state level.

The threat from the Rich Taxpayers' League is that rich taxpayers would move out of the state if the legislature asked them to pay the same rate as regular people. Thing is, this doesn't tend to happen.

I continue to be surprised that a major party can make rich people its only priority and get away with it. Putting rich people above everyone else seems like bad politics; putting rich people's convenience above the lives of the vulnerable is un-American.

If you haven't read it yet, you should read David Cay Johnston's great piece telling what the rich don't want you to know about taxes. This is the kind of reporting that won him his Pulitzer. Getting the rich to pay the same rate the rest of us do would help close the deficit.

Warren Buffett has said he thinks it's wrong that he pays a lower tax rate than his secretary. And he's right.

Where did the deficit come from? Here's a chart from the Center of Budget & Policy Priorities, with information from the nonpartisan Congressional Budget Office

Do you ever wonder why the deficit is an issue now? It didn't used to be. The raising of funds to pay for the things only government can do has gotten more difficult because the very rich have switched from helping pay for new roads, new schools and the like with their taxes to loaning the government money instead. Instead of contributing they are profiting.

Labels: , , , ,


Post a Comment

<< Home