The problem is not that taxes are too high, it’s that taxes are too low. It is painfully obvious that none of these governments have raised enough tax dollars to cover spending over the years.
The problem is not that taxes are too high, it’s that taxes are too low.
With the federal government running up budget deficits and astronomical debt along with virtually every state and local governmental unit throughout the country, it is painfully obvious that none of these governments have raised enough tax dollars to cover spending over the years.
Instead, they have borrowed vast amounts of money, which results in huge interest payments that just add to the public debt and make government spending even more expensive and impossible to sustain. Governments are literally going bankrupt.
If taxes had increased appropriately over the years to cover spending, Americans might have realized long ago that there is “no free lunch.” Americans would have felt the sting of taxes, and tough choices would have been made as to what government spending and taxes were necessary and affordable for a vibrant and healthy economy, and what spending and taxes were required to meet the welfare needs of society.
Instead, deceitful politicians with the blessings of the misguided and delusional American public unrealistically spent and borrowed vast sums of money. Moreover, by under-taxing, these same politicians shifted the focus away from over-spending, which is the real issue, not taxes. Taxes are the consequence of spending, not the cause of it.
It’s time to face fiscal reality and stop acting like complete financial idiots. There is no possible way to reduce the current massive budget deficits and public debt without increasing taxes, particularly for those in upper-income brackets who can most afford to pay. There are simply not enough government expenditures that can be cut to reduce deficits and debt without devastatingly impacting employment, needed services, education and the economy in general.
In addition, when it comes to cutting spending, there are huge and irreconcilable disagreements on what needs to be cut and by how much. Many politicians and their constituents like to complain about taxes, but most of them like the benefits of spending even though they don’t want to pay for it. You can’t have it both ways.
Both political parties are guilty of financial mismanagement, but the Republicans, starting with Ronald Reagan, are notorious for their massive spending and borrowing policies and their tax-cutting and “no new taxes” rhetoric. If the Republican and tea parties were genuinely concerned about reducing budget deficits at the federal, state and local levels, they would have allowed the Bush tax cuts to expire.
The disconnect between taxation and government spending must end now. Otherwise, we are headed into a financial abyss from which we may not be able to recover.
Rick Donofrio of Brighton, N.Y., is a retired chief financial officer and college associate professor of accounting and economics. This is a guest column from The Messenger Post (N.Y.).