Are you willing to pay higher taxes to be 'fiscally responsible'?
Bruce Bartlett, once a Republican champion of supply-side economics and more recently best-known for his scathing attacks on President George W. Bush's economic policies, argues in Forbes magazine that the U.S. now has no alternative but to raise income tax rates.
Everyone knows that fiscal discipline must be restored eventually, or we will face truly horrifying consequences -- defaulting on the debt, nonpayment of Social Security benefits, a collapsing dollar, and double-digit inflation and interest rates. Everyone also knows that this will involve a combination of higher revenues and lower spending. The idea that we can restore fiscal health only with spending cuts is childish . . .
At some point, taxes have to be back on the table as the price that must be paid for profligate spending. Only then will the American people realize that they can't have their cake and eat it too, as Republicans have preached for the last decade. Only when the American people go back to believing that spending must be paid for will they stop demanding something for nothing and put the country back on the path to fiscal sanity.
Many of the comments that Bartlett provoked expressed outrage at the idea of the federal government taking even one more dime from taxpayers. Instead, the no-higher-taxes camp asserts simply that federal spending should be slashed to balance the budget -- even if that means gutting Social Security and Medicare. As if that would have no consequences for the nation's social fabric or the economy.
What Bartlett doesn't address is the complicity of our foreign creditors. As long as the U.S. can borrow with abandon from foreigners, the pressure to face up to fiscal responsibility just isn't there. But this is, of course, a case of pay now or pay later.
As one commenter put it:
The real choice is between increasing taxes or borrowing [from] the Chinese and having our children pay them back. Because the ability to borrow is predicated on the ability to tax incomes, it is not all of our children that will pay this back, only the children who will be among the top income earners -- who usually have high income parents (the very people whose taxes were cut by George W. Bush).
-- Tom Petruno
Photo: Bruce Bartlett