Sunday, April 11, 2010

Broder: Tax Rise Coming

David Broder, the dean of the U.S. political commentariat, writes for The Washington Post that after the fall election Congress will have to get serious about the gap between expenditures and tax revenues. He expects to see proposals to raise taxes in one of several ways. I daresay he is correct in this prediction.

Broder reports that the national government will be spending 25 percent of gross domestic product while only taking in in taxes 19 percent of GDP. The issue will be closing this gap which represents 6% of GDP.

The gap can be closed in two ways, tax more or spend less. I am in favor of spending less. To do so might involve closing a number of federal agencies, like Transportation and Education. Does anyone seriously believe that the nation would grind to a halt without either of these?

Would farmers stop planting corn or wheat if there were no Department of Agriculture? Would you go live under a bridge without the Department of Housing and Urban Development? Would your local mall close because there was no longer a Department of Commerce?

You get the idea. Go see a complete list of federal agencies at this website, there are hundreds: http://www.usa.gov/Agencies/Federal/All_Agencies/index.shtml. How many agencies do you believe we can do without? I'm guessing it will be a lot. Then share your findings with your congressperson. You can be useful without even attending a tea party.

Finally, we would probably have to stop increases in the entitlements, maybe even means test some of them. That is hard, but worth it. Raising taxes tends to stifle our economic growth and development, and thus stifle the creation of jobs and wealth. Jobs and wealth are what we need. GDP needs to grow.

BTW, Rasmussen Reports finds that 66% of their poll respondents believe Americans pay too much tax.