Archived Story

America needs a tax increase

Published 10:12am Friday, October 25, 2013

It is true, and it is inevitable that if we are to protect and preserve Social Security and Medicare we will have to have an increase in revenue going into the federal treasury.

But what is the alternative? Well, we could make people work longer, we could shrink their retirement income, we could diminish their cost of living balance, or we could end Social Security altogether and save a lot of money. Except it isn’t the governments money, it is our money backed by U.S. Treasury bonds that have never failed, just as in 70 years Social Security has never failed America’s seniors.

Regarding Medicare we could, in this age of increasing lifesaving medical technology, reduce the access of seniors to that technology, and charge them more for less coverage. Effectively, to do so would be to finally and honestly create the “death panels” that Sarah Palin cynically coined in 2009. For if medical science can extend healthy living but seniors cannot afford to access that technology because some among us decide the cost is too high, and then aren’t we economically declaring Death Panels will be the tool to control costs?

We need to raise taxes to protect and preserve these two programs that 80 percent of Americans support.

Raising taxes is not really bad news though, it can be painless for most Americans who are already sharing a big burden in state, local, and federal taxes.

Did you know that corporate taxes today represent their smallest share of federal tax revenue in the last 60 years? While Republicans have been demanding a reduction in the corporate tax rate, now set at 35 percent and among the highest in western nations, the effective tax rate, which represents taxes paid after deductions, is currently at 12.6 percent according to the Government Accountability Office.

Further, more and more corporations, due to the Swiss cheese large holes in the corporate tax code, are actually paying zero taxes. Currently 57 of the S&P 500 are paying no taxes, an impressive number of tax evaders who, among other things, have been known to hide income offshore by overpaying for products assembled in foreign countries to shift the profit out of the U.S.

Clearly, we can and should simplify the tax structure for these corporations along the lines of 25 percent taxation with zero deductions and penalties for diverted income, all of which would allow these international giants to help support the infrastructure they use daily.

We can also raise revenue by ending the folly of the capital gains 15 percent tax rate and restoring it as taxed as all regular income. This has been a boon to the 10 percent of Americans who earn most of their income from equities, including hedge fund managers earning literally multi millions annually and paying lower tax rates than working Americans.

And there is general agreement that the tax code needs simplification and we can do so in a way that raises revenue by closing some loopholes that favor the richest Americans to the detriment of all other Americans, creating an uneven basis for fair taxation.

Finally, everyone may have to chip in a little in higher payments to support Social Security and Medicare by actions like ending the Social Security income contribution ceiling and accepting higher payroll taxes.

In a survey completed in February of 2013 by the nonprofit National Academy of Social Insurance, respondents indicated a willingness to contribute more IF there was not just a protection of benefits but a strengthening of benefits. Respondents wanted, in return for their acceptance of higher premiums, a gradual increase in minimum benefits and a refactoring of cost of living benefits to better recognize the higher inflation of health costs than the general economy experiences.

Some will argue that we must reduce these trusted programs that have served the country so well, that we can no longer afford them. They are wrong, we can and must sustain these popular programs. We simply have to end the unfair tax structure that favors corporations and the wealthy and contribute a bit more to keep our earned benefits secure.

 

Jim Crawford is a retired educator and political enthusiast living here in the Tri-State.

  • Lil Hilary

    79tiger…some of what you say is true, like we need more people working. You are under a false conclusion liberals are buying votes through government handouts…I visit some very poor counties and the majority vote republican or don’t vote at all….the big 3 the government spends on are: defense, social security, medicare. These take up our budget…..I agree, we need to cut spending. Cut defense like the dems want, increase the retirement age like the republicans are advocating….do a flat tax, get rid of all deductions..think of all the cheaters that would weed out!

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  • http://www.tytandan.com 79Tiger

    I knew from the headline of the article it was Crawford. Typical liberal/progressive answer to all that ills this country. No Mr. Crawford, taxes do not need to be raised. America needs more people working and contributing to the tax base rather than taking from it courtesy of a federal government that loves to buy votes with their handouts. Higher taxes and increased government spending combined with high unemployment only makes things worse for everyone.

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  • keta

    I couldn’t agree more about capital gains; how can it be that, in the land of opportunity, wealth is taxed at a much lower rate than work? (that’s a rhetorical question; the answer, of course, is that wealth makes the rules). One problem with social security, as I see it, is that it’s gone so far astray from its original intention, to allow the elderly to live with dignity. Especially since the economic crisis, when laid-off workers of a certain age reach the end of their unemployment benefits, many of them apply for and receive disability instead. Public school kids with learning disabilities get benefits, as though they were retired coal miners or truck drivers. The number of people receiving social security benefits is insane.

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    • mikehaney

      Keta–One problem with social security, as I see it, is that it’s gone so far astray from its original intention, – ————–
      Couldn’t agree with you more.

      (Report comment)

    • http://www.tytandan.com 79Tiger

      Agree with Keta re SS. A program that had worthy intentions in the beginning has been hijacked into a pseudo-welfare program to be squandered at the pleasure of both political parties to the detriment of those it initially intended to help.

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  • mickakers

    Jim Crawford; As a PS: If we had Socialized Medicine, there would be no need for Medicare.

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  • mickakers

    Jim Crawford; Without a doubt, Social Security and Medicare must be preserved. Without a doubt, there needs to be a tax increase and reform. Without a doubt, there needs to be better management (fiscal) of these beneficial programs. Without a doubt, we need Socialized Medicine.

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