The federal deficit presents long-term problems and we must have long-term solutions to address them properly. We need a multi-tiered approach to ensure our tax system reflects our values of fairness and social justice and that spending is reduced responsibly. The proposals of the Bowles-Simpson Commission provide a good starting point for needed reforms. At the same time I will not support any plan that reduces the deficit on the backs of seniors and the working poor. Here are my priorities for addressing the deficit:
Restoring Fairness in the Tax Code
Our current tax system does not work. We must revise the tax code to benefit all Americans. Those who have seen their incomes skyrocket as a result of our current system should pay their fair share in taxes.
We must allow the Bush Tax Cuts for the wealthy to expire. This alone would raise $700 billion over the next ten years. We should also limit credits and deductions that mostly benefit the top earning Americans. I support implementing the Buffett Rule, which would ensure that no American with an income of over $1 million pays a lower tax rate than a middle class family.
Improving the Corporate Tax Code
We must also fix the corporate tax code. Under the current system, many corporations are able to avoid taxes through various credits, deductions, and other tax breaks, while others pay a top level tax rate that is the second highest in the world. We must eliminate those loopholes and make our blended rate more competitive. We need a tax structure that both provides incentives for corporations to stay in the United States and also requires them to pay a fair amount in taxes. We can accomplish both those goals through comprehensive reform of the corporate tax code.
President Obama recently released a plan to reform the corporate tax code, including measures to lower the overall corporate rate from 35 to 28 and eliminating many of the loopholes. His proposal is a step in the right direction. We must raise the capital gains taxes paid on investments in large companies and at the same time lower capital gains for small business investment so that there is a strong incentive to invest in small companies, who create most of the new jobs.
Making Smart Reductions in Federal Spending
I believe that shared sacrifice is necessary to address the deficit in the long-term. Spending reduction must be part of any plan to lower the deficit. Some cuts are necessary in defense spending, but only in measured, specific ways that would not compromise our national security.
While smart entitlement reform is appropriate, we also cannot jeopardize vital social programs. I will not support any plan that reduces the deficit on the backs of seniors and the working poor. In fact, the only way to protect these social programs is to address deficit reduction with a long-term approach.