As you many know, we are locked in a fierce budget between Democrats and Republicans. Democrats went to raise taxes on top earners and mildly cut spending, while Republicans want to cut, no butcher spending and maintain and even reduce taxes on the top earners, claiming that if we raise taxes on the top earners, the economy will slow down because those are the people that produce jobs in this county. Thus, if any new regulation or taxes that is introduced, a minute will not pass before they label it as "job-killing."
To both parties, you are both wrong.
To balance the budget, you must raise taxes and cut spending at the same time. It's just common sense. Sure, it'll involve make some tough choices, but when you have a growing deficit and debt, those choices are really necessary. Those who do make those tough choices and follow through with it display leadership, something we haven't seen from both Democrats and Republicans alike in a long time.
Here comes the part in which almost everyone drags their feet, comes up with plans that really don't sound good (I'm looking at you, Paul Ryan) and where the most bitter and nasty political fights arise and occur. Ah taxes. We can always count on you for good old political rhetoric, political nonsense. But enough with the nostalgia. Let's get down to business. You may or may not note how aggressive I might be in this section, for better or for worse, it all depends on your opinion. Let us start with those estate taxes. I have three choices on the menu, and here they are (these come directly from the New York Times's Budget Puzzle)-
- The Lincoln-Kyl Proposal- As we all know, there was no estate tax in 2010. This
- The Obama Proposal-
- Return to Clinton-Era Levels-
need to make some tough choices if we want to close the deficit and put this country on the long road to eliminating the debt. Next up on my plate- The Bush Era Tax Cuts. Here is where things get even more tougher. We have the two options, which are among the subjects of the most heated debates that takes place in Capital Hill. These are-
So far, together with the two previous posts in this series, $564 Billion of the 2015 projected shortfall of $418 Billion has been accounted for, and $2,027 Billion of the 2030 projected shortfall of $1,345 Billon has also been accounted for. Thus, it leaves me with a suplus of $146 Billion for 2015, and a $682 Billion suplus for 2030, all which will go to reduce the deficit. Here is a breakdown-
- Domestic Programs and Foreign Aid- $59 Billion out of the $418 Billion shortfall in 2015, and $62 Billion out of the $1,345 Billion shortfall in 2030 has been sliced off.
- Military- $61 Billion out of the $418 Billion shortfall in 2015, and $107 Billion out of the $1,345 Billion shortfall in 2030 has been sliced off.
- Health Care- $78 Billion of the $418 Billion shortfall in 2015, and $823 Billion out of the $1,345 Billion shortfall in 2030 has been sliced off.
- Social Security- $19 Billion of the $418 Billion shortfall in 2015, and $301 Billion out of the $1,345 Billion shortfall in 2030 has been sliced off.
- Taxes- $347 Billion of the $418 Billion shortfall in 2015, and $734 Billion of the $1,345 Billion shortfall in 2030 has been sliced off.
For those who want see how I did it, and with the complete numbers, check it out here.
Next Up- Reflections.
Next Up- Reflections.
Cutting & Taxing-This is the fourth in a series of articles that will examine how to balance the Federal Budget and in the long run, reduce the long term deficit.