Pure and Simple

OK, our elected representatives in Congress seem to have agreed, for the time being, that fiscal discipline, rather than investment in the future, is the way out of our current financial dilemma. This can be done by increasing income or reducing expenses and here is where disagreement begins. Democrats generally favor the former by taxing the top income of the top income earners and eliminating certain corporate deductions. Republicans, to whom raising taxes is an obscenity, are for cutting expenses by overall fiscal austerity.  

Increasing the rate on upper income would be raising taxes, pure and simple. But if we lower benefits from entitlements, paid for by a mandated portion of taxpayer money, are we then reducing expenses? Well yes, but not pure and simple. Raising deductibles on medical benefits requires the beneficiaries to pay more out of their pockets for the same benefits, without a corresponding decrease in taxes. If bank balances were the only guide, this would be a tax increase pure and simple. Changes in entitlements affect poorer Americans. We know how both parties differ here.

The most unwarranted benefit cuts now being considered are for Social Security. For anyone who doesn’t know, this agency is in surplus, and figures to be until 2057. That’s forty six years during which the government can make money from it as it now operates. But it can make even more by cutting benefits. We should consider that taxpayer money has been in effect seized through payroll deductions for specific promised benefits. I suppose the case could be made that since the contributions weren’t voluntary the promised rewards aren’t binding. This argument is seriously weakened by the fact that this commitment has been honored by the government for nearly a century. 

For years Democrats have been accused by Republicans of “redistributing wealth” and engaging in “class warfare.” The Bush tax cuts, so dear to Republican hearts, have redistributed more wealth than anything since the Clinton tax increases, so this one might be a wash. But not class warfare. A glance at the GOP budgetary proposals invites several metaphors, my choice being “the best defense is a good offense.”