America is Broke, and the Buffett Rule Could Have Fixed It
As predicted, the Buffett Rule met its swift demise on the Senate floor on Monday. To no one’s surprise, Senate Republicans blocked this particular proposal with ease. However, tax policy remains a major talking point on the presidential campaign trail, as the Buffett Rule responds to a far more fundamental problem in the U.S. than tax equality.
We may as well accept that it is extremely unlikely that CEOs will ever pay the same amount in taxes as their secretaries. There will always be those billionaires that donate to charity and create jobs and, hopefully, advance general welfare enough so that greater equality can flourish. The bigger, more fundamental problem that the Buffett Plan tried and failed to solve is that we, as a country, are out of money. We forget too easily that we are on a spending spree is unsustainable. Raising taxes was an attempt to increase government revenue and decrease debt. However, the debate surrounding it focused on “class warfare” and matters of social inequality.
The fact is that the Buffett Rule would have raised an estimated $47 billion over the next 10 years for the federal government. The way in which this proposal was so cavalierly shut down is very enlightening as to the way many view our nation’s current $15.7 trillion debt. To simply wave off $47 billion because it is too controversial suggests that our priorities are severely out of whack.
What is disturbing is not that the Buffet Rule failed but rather that the debate surrounding it barely took into consideration its role in potential debt reduction. Instead, a revenue strategy became a social issue and public perspective became so warped that we not only allowed, but expected our government to scoff at $47 billion. Perhaps, the Buffett Rule still should not have passed, but it should have failed with more public discourse about the fact that the government would not acquire a desperately needed large sum of money. There is something awry in a society that can discuss symbolic social implications ad nauseum and almost completely ignore concrete financial data.
This is not to suggest that we should be raising revenue or cutting spending willy-nilly with no concern for sound economic planning. It is also not to say that our debt is more important than social justice. Instead, this suggests that we are far too ready to criticize strategies to alleviate debt. We cannot have our cake and eat it too in this country anymore. It is impossible to maintain our defense budget with taxes as low as they are for the top two brackets. There most likely will not be a perfect solution to reduce debt where a certain group does not feel cheated or unfairly burdened, as the 1% did by the Buffett Rule. If we do not want to raise taxes, or cut military spending, or reduce welfare programs like social security, then we must accept that our country will be bankrupt one day. There is hope that the Bush tax cuts will be allowed to expire if the President wins a second term. However, if this does not come to pass, the only possible way to decrease debt will be to quit spending more than we earn. This is sound financial advice for individuals, why not for the government as well?
There has been progress. The 2013 Defense Budget is projected to include some reductions. This will undoubtedly not be without debate. Hopefully, this debate will center on whether or not this is a good strategy for debt reduction instead of whether or not cutting defense spending is “unpatriotic.”