Posted on 02/23/2023 11:51:04 AM PST by nickcarraway
Our federal government is too big and spends too much money.
As a lifetime fiscal conservative, I want to raise our federal taxes and give it even more money. I want our government to take more money because the alternative, future federal bankruptcy, would be much worse.
In fiscal year 2022 the feds took $4.9 trillion in revenue and spent $6.3 trillion, a deficit of $1.4 trillion, added to our national debt.
My Oct. 22, 2022, column, “Cut federal spending,” described draconian cuts, including eliminating entire cabinet departments, but such major spending cuts would only reduce our deficit by one-third. As our government finances are on an unsustainable path, major tax increases are also needed to get closer to a balanced federal budget. Here is what we can do:
First, repeal the 20% pass-through deduction from self-employment income that charges the self-employed a lower tax rate than those employed doing the same work. This deduction was created in 2017. Increases annual revenues $56 billion.
Second, eliminate special credits, deductions and exemptions in the corporate tax code. Increases annual revenues $118 billion.
Third, eliminate similar business preferences on individual tax returns. Increases annual revenues $50 billion.
Fourth, eliminate the step-up basis of capital gains at death and three other provisions that avoid capital gains taxes. Increases annual revenues $52 billion.
Fifth, repeal the tax exemption for interest on state and local government bonds and similar interest tax exemptions. This will also discourage state and local government debt and encourage pay-as-you-go practices. Increases annual revenues $44 billion.
Sixth, collect taxes owed but unpaid. The annual “tax gap” of taxes owed but uncollected is about $600 billion. The Biden administration’s $80 billion IRS funding increase, over 10 years, will generate an estimated $320 billion in added revenue, a four-to-one return on investment. Republicans in Congress are trying to reverse those IRS improvements, which would be a grave mistake.
IRS improvements will start with better computer systems, including connecting more often with people electronically. If someone misses a filing date and the IRS sends an email two weeks later inquiring about that filing, then they will be more likely to stay on track with their tax obligations. Those better computer systems must be matched by “boots on the ground.” Given the high amount of tax noncompliance and the frequent use of aggressive tax evasion strategies, we need a large number of auditors and a 100% audit rate for large businesses and large fortunes.
If we could reduce the tax gap by an additional net $80 billion, perhaps $100 billion in added revenue net of another $20 billion annually in added IRS costs, then the total revenue increases proposed in this column reach $400 billion.
These revenue increases would not increase general tax rates and would not add new federal taxes. Few of us wake up in the morning and say “increase my taxes,” but the tax increases described here would help delay a dangerous day of reckoning for federal finances and for all of us.
It is worth pondering how we got into this predicament. After Democrat Bill Clinton’s administration produced four straight years of budget surpluses, Republican President George W. Bush enacted major taxes cut twice, including after 9/11 and the start of the global war on terror. Under Bush, federal revenue as a share of gross domestic product declined from 20.9% in 2000 to 16.3% in 2004. Republican willingness to lower taxes while increasing spending during two wars produced continuous deficits, approaching half a trillion dollars annually. In a similar vein, Republican’s 2017 tax cuts added $2 trillion to the deficit over the following decade. Democratic shortcomings are more subtle but equally real, notably a desire for greater entitlements without reconciling that desire with an American distaste for taxes that dates back to the Revolution of 1776.
In George Orwell’s 1984, a sign of submission to big brother is believing that 2 + 2 = 5. That also seems to be an axiom of current federal budgeting. Let’s fix that.
Martin L. Buchanan is a software developer and writer in Laramie. His email is MartinLBuchanan@gmail.com.
he’s a fiscal idiot
How about a tariff instead? Not only does it raise massive revenue, it is voluntary ( dont buy dont pay) and it PROMOTES DOMESTIC INDUSTRY.
Another tax collector for the Welfare State.
Wake me up when the nation-wide, massive, all-inclusive tax revolt starts.... /s
Wonder if he ever has sent in extra money on his own accord/
https://www.fiscal.treasury.gov/public/gifts-to-government.html
How do I make a contribution to the U.S. government?
Citizens who wish to make a general donation to the U.S. government may send contributions to a specific account called “Gifts to the United States.”
This account was established in 1843 to accept gifts, such as bequests, from individuals wishing to express their patriotism to the United States. Money deposited into this account is for general use by the federal government and can be available for budget needs.
You mean a tariff like Bush and Obama implemented? And which actually hurt, not helped U.S. industry? Haven't we gotten to the point that we realize Bush and Obama weren't good presidents?
Mr Buchanan is an Arsehole.
Don’t see too many REDUCTIONS OF SPENDING in that list.
How about my plan?
Cut Fed Goobermint by 75%
Bring all overseas troops home and put them on our border.
THEN. we can discuss what else needs to be done.
Until then? Not One Thin Dime More.
Let It All Burn
1/3rd of GDP is government spending. Bush's tax cuts increased government revenue (yay!), but not as much as government increased spending (boo!). Obviously the spending was the problem. Always is.
By the way, this is why I hate using the GDP as the measuring stick for the health of the economy. When 1/3rd of the GDP is government spending, then our economy looks "healthier" when our government spends itself further into debt. When I was married to my ex you would have thought me insane if I had bragged on our "financial well being" due to all the credit card spending my ex did. That's what it's like whenever an increased GDP is used as some kind of barometer for increased financial health of the country.
Increasing tax rates reduces tax revenue....always has, always will.
I'm all for closing business tax loop holes and benefits, like the millions of free trips that salesmen get doing their job....never taxed....golf outings, beach vacations, fancy sports events....all treated like business expenses.....
but make sure you don't claim too much on your donated underwear, like billy bj...
BTW...the simplest solution is to enforce article I section VIII.
“spent $6.3 trillion”
That’s about $18,000/citizen/year.
"Protective tariffs are tariffs that are enacted with the aim of protecting a domestic industry.[1] They aim to make imported goods cost more than equivalent goods produced domestically, thereby causing sales of domestically produced goods to rise, supporting local industry. Tariffs are also imposed in order to raise government revenue, or to reduce an undesirable activity (sin tax). Although a tariff can simultaneously protect domestic industry and earn government revenue, the goals of protection and revenue maximization suggest different tariff rates, entailing a tradeoff between the two aims."
We are bankrupt and they are just choosing a time for us to die. We are being held up by smoke and mirrors of the most corrupt governments in the world.
Stop reading from the leftist playbook. So, do you want to bring Obama back? Remember his tariffs against China?
What hurt U.S. business was regulation and taxation, which you seem to be okay with.
You could get rid of all regulations and taxes and the tariff would still the best way to fund FedGov.
Sorry but leftist hate tariffs. Globalists hate tariffs. Marx was a free trader.
“The Congress shall have the power to dispose of...the territory and other property of the United States.”
Article 4, Section 3
“Although the Continental Congress was quick to provide pensions to soldiers disabled in the war, service pensions were a much more contentious issue. Congress first offered service pensions to officers in 1781, in order to prevent mass desertion. General Washington lobbied tirelessly for the pension, which promised half-pay for life to officers who served to the end of the war. In 1783, the officers astutely recognized that Congress could not afford to pay the pension annuities, given the precarious state of the federal budget. A group of officers at the Newburgh Garrison in New York refused to disband (in effect, threatening a coup) until they were paid. General Washington again brokered a deal — the officers received full pay for five years, paid in a commutation bond. Many officers eventually sold the bond at a steep discount.”
https://eh.net/book_reviews/americas-first-veterans-and-the-revolutionary-war-pensions/
“The government had stopped issuing pay to soldiers in 1777, as the value of the Continental was rapidly declining. So, veterans could legitimately claim that they had not received the pay that had been promised them.”
“With the support of veteran presidents, such as Monroe and Jackson, Congress finally passed pension legislation for indigent veterans in 1818, and service pensions for all veterans in 1832. Thus, a non-indigent veteran could receive a pension for military service, but only if he survived forty-nine years after the close of the war. Widows who were married before or during the war could receive a pension beginning in 1836.”
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.