Congressional Republicans and Democrats want to lower the debt, but they have very different approaches. The Republicans' idea, the Ryan Budget, would repeal the health care law, turn Medicare into a voucher program and reduce benefits, slash Medicaid -- the program that more than 60 percent of nursing home residents need to pay for their beds -- cut other domestic programs, and would be revenue-neutral. In other words, it would not raise a penny of revenue to help pay down the debt; it would rely just on deep cuts. Democrats offered a budget, the Van Hollen Budget, which had a mixture of cuts and revenue. For Americans who want to lower the debt but still invest in good government, the question has to be, "Can we raise revenue to pay the bills without increasing taxes on the middle class and small businesses?"
The answer is, "Of course." There is plenty of revenue to be found, but guards, otherwise known as lobbyists, are standing watch over the revenue and our incredibly unfair tax code. America desperately needs revenue to rebuild transportation and communication infrastructure and create jobs, to provide health care to seniors and poor children, to invest in medical and business research and technology, to educate our young people, keep our country safe, and to pay down our debt, but we should not borrow for all of this. We should raise revenue. So, looking past both budgets, where can we find money?
Even though most people don't hear about them, there are many suggestions being made by many different groups. I am going to include some here, whether I agree or disagree with the suggestions.
Some want to raise taxes on the wealthiest. The Congressional Progressive Caucus Budget "asks the extraordinarily wealthy to pay a sensible share by creating five additional tax brackets, the highest of which is still lower than the top bracket in place during most of the Reagan Administration." Their brackets would be 45 percent for $1-10 million, 46 percent for $10-20 million, 48 percent for $100 million-1 billion, and 49 percent for $1 billion and more.
Many are taking aim at those corporations that have managed to escape paying any federal income taxes. David Kocieniewski's article in the New York Times, March 24, 2011, titled "G.E.'s Strategies Let It Avoid Taxes Altogether," certainly caught the public's attention. He wrote that General Electric had worldwide profits of $14.2 billion, $5.1 from U.S. operations, and "Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion." And G.E. is not alone. Kocieniewski points out that while we have one of the highest corporate tax rates in the world, "companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less."
He reports that the corporate contribution to our nation's revenue was 30 percent of the total 60 years ago, but only 6.6 percent in 2009. Reform the tax code now. Some think we need to do a better job collecting taxes that are already owed under the current code. James Thompson wrote in an article, published on April 13 in USA Today, that, "The government's failure to collect the $385 billion that is owed but not paid the government each year -- called the "tax gap" -- translates to a $3,300 surtax on each taxpaying household, according to the Taxpayer Advocate Service." He argues that instead of cutting the IRS and its 98,000 employees, 10,000 employees smaller than in 2010, we should invest in catching cheaters to bring in revenue and make it fairer for the rest of us.
There are many other ideas to raise revenue without hitting the middle class and small businesses. Stop allowing hedge-fund managers and private equity fund managers to report their income differently, paying a capital gains rate instead of an ordinary income rate. No more deductions on yachts, gambling debts and private jets. A small financial speculation tax on huge institutional (not individual) transactions on Wall Street would raise billions over 10 years.
The point here is that we have a choice. Put options on the table and have a vote on them, one by one. I listen to government officials, service providers, educational institutions and small businesses each day. They talk about the need for some revenue to invest in our people and build our country. We can raise revenue to pay down the debt and adequately run the country, and we don't need to ask the middle class to pay more than their fair share. We just need to ask others who have been holding back to pay theirs.