Sunday, January 29, 2023

DEFICIT: Sacrifice is only way out

| April 30, 2010 10:00 PM

Many folks are talking about the deficit, which is good. The talk, however, reminds me of Mark Twain’s comments about the weather: “Weather is something everyone talks about, but nobody does anything about it.”

The reason no one does anything about the deficit is because it will require sacrifices from all of us, even the wealthy.

Who will reduce the entitlements that so many enjoy? Who will make the cuts to Social Security, Medicare, Medicaid, VA benefits, etc.? Who wants to take on the powerful lobbies that protect the subsidies for farming, health care, homeownership and banks? Those subsidies cost over $250 billion, and that does not include industrial subsidies  and tax breaks. How many billions did Exxon and GE make last year? They did not even pay income taxes in the US -- not a dollar.

Professor Leonard Burman, writing in the University of Virginia Tax Review, feels that the Value Added Tax (VAT), similar to other countries, would eliminate the income tax for families making up to $100,000 a year. Our federal tax rate is the second lowest in 50 years, and that too obviously impacts our deficit.

Many scholars, and some daring politicians, talk about these options, but that’s just talk. Any one of the proposals will require sacrifice from all of us, including the wealthy, but no one will do anything about the deficit until we have another fiscal crisis like the great depression.


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