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Tax News - Boston Globe Sez Taxes Are Wonderful
Yeah, yeah, they probably trot this one out every year...By Diane Lim Rogers | April 16, 2006 WITH TAX-FILING upon us, many people, ordinary citizens and politicians alike, complain of how high Americans' tax burdens are. President Bush recently used his radio address to say that, as Americans are finishing up their tax returns, they should be reminded of the need to make the 2001-03 tax cuts permanent. Like you need reminding when you're mailing The Man 2 or three large? Left unsaid, though, is that even with our imperfect tax system, the revenues provided by taxes strengthen, not weaken, our nation's economy. They fund essential public goods and services, they contribute positively to national saving, and many of the things that they fund -- from highways and schools to biomedical research and national parks -- indirectly create private wealth as well. As Justice Oliver Wendell Holmes put it in 1927, ''Taxes are what we pay for a civilized society." If you define private wealth as 'many government employees', then I agree with that. Policy makers who argue that taxes are too high are typically not just in favor of low taxes; they are also in favor of smaller government. They ignore the fact that the recent tax cuts have not shrunk government spending. The recent tax cuts instead have increased the budget deficit, reduced national saving, and made it more likely that our children and grandchildren will face a weaker economy and lower standard of living than would otherwise be possible. Just as unemploment numbers have shrunk recently? That's a 'weaker economy'? Since President Bush took office, That's the cost of 'compassionate conservatism'. Those who have supported the tax cuts typically deny that the tax cuts have had anything to do with this deteriorating budget outlook. In fact, many have argued that revenues would have been lower without the tax cuts, i.e., that the tax cuts more than pay for themselves. Reagan proved it, and so did Bush. Facts are inconvenient things... But the facts show that the tax cuts already enacted will cost more than $3 trillion just through 2016. Thus, contrary to the view that the tax cuts were neutral or even beneficial, the tax cuts have been a huge factor in the deterioration of the 10-year outlook and our currently high and rising deficits. Only in the mind of a big government liberal is a tax cut considered a 'cost' to the government. Let me ask you this, lady - is it fair to say that taxes I pay to the government should be considered a 'cost' to me? Making the 2001-03 tax cuts permanent, as the president is calling for, would bring the total cost through 2016 to $6 trillion, including interest. Yet the president says this is the way to ''stay on track to meet our goal of cutting the budget deficit in half by 2009." Unfortunately, the goal of cutting in half the huge deficit created during this administration is a bit like a retailer marking up prices just before a sale. President Bush took office facing trillions of dollars in surpluses and said that his administration would reduce the federal debt by nearly $1 trillion in his first four years. Instead, the debt ceiling has been raised four times, by a total of more than $3 trillion. Finally, the argument that tax cuts grow the economy, while tax increases shrink it, is incomplete and incorrect. Economists generally agree that true tax reform, where marginal tax rates are reduced while the tax base is broadened and the revenue collected stays the same, is good for economic growth. But tax cuts that diminish revenue are harmful to economic growth if they increase deficits and reduce national saving. So as we work on our tax returns, what should we be pondering about the deeper meaning surrounding this painful and tedious task? Um, how not to pay so much? Rather than making fiscally unsustainable tax cuts permanent, let us remember that taxes are collected for a reason: to provide Excuse me? The federal government is now responsible not just for supplementing retirement but for providing "retirement and income security"? How's that model working for France, by the way? Don't you just love it when they move the goalposts? And let us be wise when we hear politicians pitching more tax cuts, understanding that every dollar of additional tax cuts that we receive now only adds more than a dollar to the future tax bills of our children and grandchildren (so you support private Social Security accounts, right?). Our current tax burden is historically low, not high: Federal taxes were less than 17 percent of gross domestic product in 2003-04, the lowest since the 1950s. A civilized society shouldn't go on a spending spree with an unwillingness to pay sufficiently for it, only to stick the bill to future generations with no political voice. In other words, we need to increase taxes - that'll go over like a fart in a church, and that's the reason Clinton lied aout his stance on taxes in 1992. Diane Lim Rogers is research director of the Budgeting for National Priorities Project at the Brookings Institution. Ah, the usual suspects! Posted by: Raj 2006-04-16 |
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