I just had the pleasure of doing my taxes for 2010. Good news, I get a return. Bad news, I thought it would be a bit larger. But welcome to the middle class where 35% of your income is taken off the top. So I start listening to all the budget talk. Most of the proposed cuts I hear about are cuts to things that benefit the poor and middle class: heating assistance, baby formula assistance, community redevelopment funds, etc. All of this while the unemployment rate lingers around 10%, prices for food and fuel are up, people are taking pay freezes and cuts, etc.
So I want to know what the wealthier set will be asked to sacrifice. This is what my search turned up.
- Ending tax breaks for coal, oil, and gas sectors. Oil, gas and fossil fuel companies would lose tax breaks and subsidies and have to pay more taxes on profits.
- Re-introducing an environmental corporate tax (Superfund taxes for clean-ups)
- Ending tax breaks for businesses who transfer profits overseas
- Increasing taxes on financial partnerships and hedge funds
- Cap tax deductions on things such as charitable donations and mortgage interest paid by the wealthiest Americans (comes to about a 30% decrease in itemized tax deductions)
- Allowing Bush tax cuts to lapse for those making over $250K a year.
- A proposed tax on the largest financial firms and banks (which the Republicans oppose)
The New Yorker had a good article on tax reform. It's worth a look.
5 comments:
My favorite thing to cut that never really gets cut is the military.
In 2009, we spent 660 Billion on our military. That's about 6 times as much as the next biggest military spender (China). Even we assume that we are compensating for a lack a numbers (and reasonable low tolerance for casualties) by spending more on technology, we have a huge advantage.
Here is a list of the top 10 military spenders in the world:
http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures
1) USA
2) China
3) UK
4) France
5) Russia
6) Germany
7) Japan
8) Saudi Arabia
9) Italy
10)India
Of the 9 other than the US, 6 are among our closest allies. A 7th, India, is the most prominent rival to China and is increasingly friendly with us. The next 10 biggest spenders are even more consistently friendly to the US.
I look at the overall global picture and assume that we are over spending on the military by A LOT, not just a little. It really makes me want to cry when I think about the real impacts of cuts on things like US mentions and realize that our country consistently seems to prefer keeping a bloated military to taking care of its own population at a standard considered minimal in most industrialized societies.
NOTE: Our deficit in 2009 was about 380 billion. So we could cut our military spending in half - leave all our tax rates and social services programs the same - and get most of the way to a balanced budget and still outspend China by about 3 to 1 all by ourselves (keep in mind we have some very powerful friends to help us if - by some unforeseen fluke - China and the US go to war).
I'm not suggesting that that is what we should do. But it seems to me that if we are looking for fat in the budget, it's blindingly obvious where it is.
The projected deficit this year is 1.6 trillion.
I still say we can cut the military A LOT to good benefit. And in my defense, I was looking at 2009 data.
If we cut $100 Billion from the military and ended the Bush tax cuts we'd eliminate about $650 billion from the deficit immediately.
I don't disagree, RBR. And Secretary Gates has put forward proposals to cut DoD. He sees it is necessary. But no Congressperson wants to loose a weapons program in his/her state.
BTW: BRAC commission is active again.
We can also go back to taxing these bankers on what is not nontaxable income. WE gave billions out to private companies (Harley Davidson, Verizon, GE, every auto company, etc) in short term loans (Treasury bought their commercial paper in help them with cash flow). These same companies then gave generously to mostly Republican candidates in the last election. That kind of thing also has to stop.
Let start adding a special AMT on people who make over $3mil a year and another on those making over $1 bil a year. But that would mean our legislators getting out of these people's back pockets.
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