As the tax and spending debate begins in Congress we should step back and see just where we are.
Firstly, other than the Bush tax cuts, the wars in the Middle East and the Medicare drug benefit we have the same federal obligations as when President Clinton left office.
We are still spending $200 billion per year in Afghanistan. This expense should be greatly reduced by the end of 2014. The Medicare drug benefit has turned out to be less expensive than projected, because of the reductions in hospitalization made possible by better access to RXs. The cost of Medicare covered drugs could be further reduced if congress would authorize Medicare to negotiate drug prices and buy drugs from any safe source.
If a significant part of the Bush tax reductions are allowed to expire, the deficit will be greatly reduced. I would like to see the tax reduction expire for individuals who make over $100,000 per year and families that make over $120,000 per year. I don’t know why President Obama thinks people who make $240,000 per year ($20,000 per month) need a tax break.
Although Social Security has not contributed one cent to the debt, it will not be able to pay full benefits in about 12 and 15 years. I suggest the early retirement age be changed from 62 to 65. And the full retirement age be changed from 67 to 68. If further funds are required, we should raise the payroll tax by from 1/2 to 1 percent for employers and employees. If we are going to keep this benefit we must pay for it. The Social Security benefit for so called disabled people is riddled with fraud, and must be brought under control.
Medicare and Medicaid are the real tough spending problems. I believe both are paying for billions of dollars for unnecessary medical care. We must enact more restrictive rules for both programs. Presently we are paying for care that doesn’t improve or extend life. We must create some type of cost-benefit evaluation for care. But if cost still can’t be reduced we should raise the Medicare tax to pay for the program. Privatization will only increase costs.
Our tax code is a confusing mess for many and serves few. As I’ve written many times, the statutory tax rates in the code are almost meaningless. Corporations and wealthy individuals often pay less than half what middle class people pay. Loopholes and many deductions must be withdrawn.
The federal government currently takes about 17 percent of Gross Domestic Product in taxes. That’s the lowest rate since the 1950s, before Medicare and Medicaid were enacted. With an aging population and the burden of the defense and promotion of democracy and human rights we cannot maintain such an extremely low level of tax collection. If we are to continue to provide for ourselves and promote freedom we must increase our federal tax rate to 22 to 25 percent of GDP. There are no spending reductions that can possibly balance income and expenditums. The greatest failure of both political parties has been their unwillingness to tell the American people the truth.
For myself, I say raise my taxes, I love America and my grandchildren more than money!
Dennis Tilly is a Weatherford resident.