Politicians like Mitt Romney and Barack Obama insist that there should be middle class tax cuts. Obama goes further and insists that these tax cuts be paid for by “the rich” (those making over $250,000 a year, his definition).
The truth is that everyone is equally entitled to tax cuts. Everyone’s taxes should be cut. But tax cuts should not be paid for by one group at the expense of the other. The rich should not be paying for the tax cuts of the middle class, and the middle class should not be paying for the tax cuts of the rich. Tax cuts should be paid for the only way it’s physically possible to pay for them: By cutting spending. Which spending? Essentially everything that isn’t provided for in the Constitution. In other words, most of what the federal government currently spends, outside of defense, should be cut if not totally eliminated.
This gets at the lie of most politicians. Romney, and probably the rest of the Republicans (outside of Ron Paul), are all in agreement on this never stated, never questioned premise that government must keep spending most of what it spends, especially on middle class entitlements such as Medicare and Social Security. Republicans, to be fair, do make the point that the rich are the ones who create the jobs. If you don’t make more than $250,000, you’re probably not going to be hiring a lot of people. If economic growth, including jobs creation, is desirable, then clearly you can’t keep taxing the rich. And taxing the rich will not resolve the problem of government spending, either. The numbers show that even if the rich were taxed more than Obama wants, the government deficit and debt would still be massive. And this assumes that tax increases have no impact on economic growth, which they plainly do, as Republicans are also right to point out.
This faux debate of payroll and middle class income tax cuts — which aren’t even cuts, but merely short-range extensions of “tax holidays” — is disgusting. The level of evasion is startling, even for Washington politics as we know it. Conventional politicians like Romney and Obama clearly are just posturing for votes. “Hey, look at me, I want the middle class taxes cut.” Of course they do. There are many more millions of people in this income category, so it means more votes. But what about the economy? What about the failure of the economy to produce more jobs? What about the failure of the economy to grow?
On a deeper level, what about the moral rights of the people who make more money? Your moral right to keep what you earn does NOT stop at a certain point arbitrarily determined by a politician. Your right is your right. It can be ignored or abused by the government, but you still possess it all the same.
Back in the 1980s, Ronald Reagan used to say he wouldn’t balance the budget on the backs of the American people. In a sense, however, this is wrong. The budget can only be balanced if spending is cut — really cut, which includes the inevitable privatization of things like medical and retirement benefits. Government simply cannot afford to finance these things indefinitely. Democrats like Obama, with the implicit support of stupid Republicans like Romney, have been allowed to get away with the implication that if only conservatives raise taxes, the spending problem would be resolved or reduced. No such thing can or will happen. Raising taxes will hurt productivity and make it even harder for government to pay for things that it cannot currently afford. Refusing to raise taxes while likewise refusing to cut spending, as politicians still refuse to do, likewise makes it impossible for government to pay for that which it cannot afford.
In the 1990s, Bill Clinton’s people ran on the campaign theme, “It’s the economy, stupid.” The more accurate phrase today should be, “It’s the spending, stupid.”
Until Congress and the President tackle the only issue that matters – spending, both short-term and long-term – these “debates” over payroll tax cut holidays and the like are worse than meaningless. They are an opportunity to stall and avoid or deny the only issue that matters.
In the end, politicians are evading what Americans by and large don’t want to face. It’s easy to blame and condemn politicians. But the politicians who know it’s career suicide to address spending are right. This wouldn’t be true if the majority of Americans were willing to face the truth.
The good thing about living in these times is watching the face of most Americans as reality closes in on them, and they won’t have only the politicians to blame, anymore. That time is coming sooner than you think. The middle class welfare-redistributive state is going bust, and “middle class tax cuts” are not going to save it.