Jeff Neal for C.U.R.E. - Certain Unalienable Rights Endowment

Magic, Not Good Governing, Balances the Budget

In Opinion on March 5, 2013 at 1:31 pm
That should work

That should work

There persists a notion that there is a magic ratio of spending cuts to tax increases that will produce ‘sustainable’ debt levels expressed as a percentage of GDP, as if that metric is dispositive and unassailable.  A little research reveals that 4:1 is the consensus-view solution to the puzzle.

Hogwash.

First, “sustainable.”  I have two sons whose definition of the sustainable debt level they voluntarily will inherit from me is $0.  They love their dad and all that, but they have been taught that an honest man pays for what he consumes.  They see no reason why that same standard should not apply to the community as a whole.  Sending a stranger your bar tab is just plain rude; sending him your grandmother’s hospital bill is even ruder – and tells me what you really think of Granny.

American tax policy is made by the same elected officials who appropriate and spend money.  To say that taxes are too low compared to spending is to suggest that spending is an orphan, that spending exists in its own universe and is ‘out of control.’  Tax collections are what they are because voters choose to control that lever and conveniently ignore spending, at the expense of unborn strangers.  And since those not-yet-voters who will pay for the overdraft (see above) have no control over the spending levers of government, we have a national debt of $16.5 trillion accumulated by an irresponsible and unaccountable political class who make a living handing out my sons’ future earnings.

Second, the “ratio.”  Consider fiscal year 2012.  (Analyzing budget policy using 10-year projections is neither illustrative nor legitimate.)  According to the White House OMB figures, in fiscal year 2012 the IRS collected individual income taxes in the amount of $1,179 trillion.  To cover a deficit of $1.127 trillion (same source) while assuming the mysteriously powerful 4:1 ratio, taxes would have had to be $225.4 billion (19%) higher.  All other things being equal, the highest marginal rate would have to increase from 39.6% to 47.2%.

Will anyone, even Harry Reid, propose a 19% tax increase ON EVERYONE?  Of course not.  Unless one assumes Americans are eager to pay significantly more income taxes, with an annual deficit roughly equal to TOTAL income taxes collected, it’s irresponsible, asinine and dishonest to suggest that increased income taxes can bridge a significant portion of the gap.

If Americans desired to eliminate the federal deficit with higher taxes, the IRS would receive unsolicited donations from millions of patriots.  Until that happens, rest assured that Americans have determined they are paying enough.

Cut spending.  My sons are counting on it.

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