Wednesday, April 15, 2015

It's Time To Increase Taxes!

As I listened and watched latest presidential contender Marco Rubio deliver his spiel, my head spun and began to ache. If elected - admittedly the chances of that are slim and none - he would decrease corporate taxes, banish the estate tax and expand the child tax credit. In other words, dig this nation into an even deeper income hole.

The child tax credit suggestion is especially galling.  Why, in a nation which is already overcrowded with 315 million people, do we need a child tax credit at all? One could justify it in the olden frontier days when more people were needed to settle the West, and homesteaders were required. But not now! Indeed, repealing the child tax credit can be rationalized as a back door carbon tax, since each American human leaves an enormous carbon footprint from the instant he’s got his first nappy and sippy cup. Such repeal then is a fair option if Americans refuse to accept an outright carbon tax - which most other industrial nations in Europe have, paid on top of their gasoline costs.

But Rubio's daft proposals fit right into the anti-tax neoliberal demand to reduce government and make it impossible to function except for the most well to do. It is, in effect, policy madness which will continue to hurl this country toward third world status.

And the inconsistencies of the jury-rigged tax code are beyond believable. For example, the new top rate of 39.6 percent is  historically low; with investment income still taxed at special low rates; and the heirs of multimillion-dollar estates face lower taxes than at almost any time in modern memory. Meanwhile, working people pay disproportionately higher taxes than market speculators as well as rich guys who can put money in trusts, or use charitable deductions. This simply makes no sense. It is an effect of insane neoliberal tax policies that show no sign of abating.

This is why we need to increase taxes. We cannot keep moping along on a super-luxury budget based on chickenfeed national income. I estimate the tax increases will need to be from 10- 15%, p.a. and ought to deal with several exigencies and past oversights:

- The under funding of wars and military operations, as well as those military toys (e.g. F35) for which there have already been monumental cost overruns.

- The desperate need to get cracking on repairing our crumbling infrastructure - including our antiquated power grids - before it gets any worse. Estimated cost by American Society of Civil Engineers? About $1.6 trillion just to get it up to minimal serviceability.

- Reinstating lost IRS funding - a third of a billion bucks at last count - which was removed by the Reepos in their latest budget cutting onslaught. This artificially created deficit was directly responsible for the IRS being unable to handle all the calls for assistance that poured in this past few weeks, including to do with refund issues and fraud problems. 

- We need to pay for all the past tax cuts - including the Bush tax cuts - that had not hitherto been paid for! The chart below makes this urgency clear;                                         

If unattended to, then, wars and previous tax cuts will account for nearly half of public debt by 2019. We cannot allow this any more than a family would allow interest on its unpaid credit card debt balloon to the point it would have to hock its own kids.

Now, logically, since the Repukes dug us into this debt hole by refusal to approve adequate revenue, for both their "wars" and tax cuts (as well as their insane 2003 prescription drug bill - more a giveaway to  Big PhRma), then it is logical that increased revenue must be the way to dig us out of the debt mess.  As a New York Times op-ed put it two years ago, the first major tax hits....errr....hikes.... must come from the hides of those who benefited most from the Bush tax cuts during the "war" years:

"Those taxpayers are the same ones who benefited most from Bush-era tax breaks and who continue to pay low taxes. Even with recent increases, the new top rate of 39.6 percent is historically low; investment income is still taxed at special low rates; and the heirs of multimillion-dollar estates face lower taxes than at almost any time in modern memory."

Incredibly,  despite these facts, the Repukes are resisting any cuts to defense, this despite the fact that they haven't - up to now - paid for any of their earlier defense spending shenanigans. They let TWO "wars" go unfunded, during supposed "war time" - a big hoot if there ever was one- plus they've not paid for the two sets of Bush tax cuts that already produced $3.2 trillion in deficits even before Obama got into office.

The alert and aware citizen needs to grasp how tax phobia represents a toxic meme we cannot afford. Its entry into public consciousness has enabled our nation to reach an unsustainable, hyper-indebted condition that will gnaw our gains into chronic losses. Above all, on this tax day, we need to be wary of any presidential contender who expresses an anti-tax position, he or she does not have the nation's welfare at heart.

As Oliver Wendell Holmes once put it:

"Taxes are the price we pay for a civilized society"

Hence, any anti-tax politician by default must be for a state of chronic barbarism.

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