Here’s the Real Adult Conversation on Deficits: The U.S. Has a Taxing Problem

[ShockediSay]

http://finance.yahoo.com/news/Here-Real-Adult-Conversation-dg-73731796.html;_ylt=AuNqy2wZyFb3R_5i6S5zIiC7YWsA;_ylu=X3oDMTE2YWRzcWJlBHBvcwMxMQRzZWMDdG9wU3RvcmllcwRzbGsDaGVyZXN0aGVyZWFs?x=0&sec=topStories&pos=8&asset=&ccode=

In the 1980s and early 1990s, Washington antagonists executed a series of deals that included tax increases and spending reductions. But these days, due to a combination of utter Republican intransigence and Democratic wishy-washiness, no such deals are possible. The legislative and executive branches have no problem working together to massively increase deficits — think about 2009's uni-
partisan stimulus package or the more recent bipartisan lame-duck to extend Bush tax cuts and enact a new payroll tax cut. But our government has an extremely difficult time making even symbolic spending cuts. Slashing about $40 billion in spending, an amount equal to 2.5 percent of this year's projected budget deficit, spurred the news networks to create shut-down clocks. And revenue enhancements? The phrase doesn't seem to be in official Washington's vocabulary. President Obama campaigned on letting the tax cuts for high earners expire at the end of 2010, swore up and down that he wanted them to expire throughout 2009 and 2010, and then meekly surrendered.

Second, even if Washington were somehow to get serious, I don't think the public is anywhere near prepared for the truth about our fiscal affairs. That's largely because nobody has bothered to tell the Americans that, as much as they feel overtaxed, the federal government, largely by design, has done an extremely poor job of collecting revenues in the past few years. That failure, as much as spending, lies at the heart of our massive structural deficits. Don't take it from me. Go to the OMB's website and check out Table 1.2, which documents spending and receipts as a percentage of GDP going back several decades. For the last 40 years, federal government spending has generally stood somewhere between 19 and 23.5 percent of GDP. In 2009, when the economy shrank and spending on bailouts and stimulus spiked, the ratio soared to 25 percent. In 2010, it shrank back to 23.8 percent. That's still elevated, but it's almost exactly what it was in the third year of Ronald Reagan's first term (23.5 percent in 1983).

[patrice]

1. I saw recently that the top bracket STARTS at $373K. That was a real shocker for me.

Yeah, $373K isn't anywhere near my idea of Middle Class, but I am going to guess that that top bracket NEEDS to be raised.

[bemildred]

2. Awesome.

This all started with the "Reagan tax cuts".
:thumbsup:

[democracy1st]

3. Why did they have to have grover norquist on the program urgh!