By Jack E. Lohman (Comments ON)
What does a president do when one tax cut sends the economy into a tailspin?
Propose another tax cut!
This time … hopefully … it will favor middle class workers who must save their mortgages and buy goods for their families, both of which will help the economy. But to pay for that cut, Congress must rescind Bush’s tax cuts for the wealthy, and that’s a big bite to chew.
They could also cut spending.
Reducing government income through tax breaks — without also reducing spending — increases the deficit and national debt, both of which got us to where we are today. Contrary to Dick Cheney’s idiotic claim, debt does matter, especially when it is owed to foreigners.
More of the same is not a prescription for repair.
But spending cuts should not come from Medicare and Social Security, two of our nation’s mainstay programs that have made our country great. Yes, they need attention, but let’s not throw the baby out with the bathwater. Yet.
Instead, we must cut the wasteful spending that goes to local pork-barrel projects, corporate subsidies, roads and bridges to nowhere, no-bid government contracts and other taxpayer giveaways to the industries that fund the political elections. The problem is that the seniors on Medicare and Social Security are not the ones funding the elections and these guys are.
In Iraq we are paying mercenaries — like Halliburton, Blackwater and Bechtel — ten times more for work our own troops could and should perform. But that’s our “privatized” political system for you. These companies can give campaign contributions and the U.S. Army can’t. Surprise!
If those cuts don’t do it, then we can look at entitlements.
To fix these problems means getting the corrupt money out of the political system, but we’ve been there before.
Indeed our whole tax structure should be revisited. We should totally eliminate taxes on those corporations that have reasonable CEO-to-worker pay ratios and manufacture their products in the United States. Those that offshore manufacturing and services should pay higher U.S. taxes on corporate revenues (rather than on profits, which can be cleverly manipulated by smart accountants). Or simply add a tariff to imported product. And they should lose their current tax subsidies for outsourcing, which are stupid on their face.
Corporate taxes are actually regressive, because they are added to the product price and passed on to consumers. And they represent only 8% of federal revenues anyway. As well, the high legal and accounting costs that corporations incur jumping through hoops to avoid taxes, are also added to their product price and we consumers reimburse them at the cash register. So are the lobbying and campaign contributions they use to better their position over the public’s. Go figure!
So let’s apply taxes strategically, to benefit American companies that are loyal to America.
Protectionist? You bet!
And let’s get real. Allowing CEOs to first drain their companies of $50 million and $100 million salaries and stock options, and then move their ill-gotten gains to offshore tax havens and not even reinvest in American enterprise, is absolute stupidity.
But not to worry. Along the way these fat cats transfer enough cash into the pockets of the lawmakers to make it all happen, yet another symptom of our corrupt political system.
Are you listening, Democrats?