Taxes, Deficits, and Economic Growth

The U.S. House of Representatives just passed the first steps toward a budget plan that will add $1.5 trillion to our nation’s debt. This reminds me of some old-time wisdom that was passed on to me years ago—“The first rule of holes is…when you’re in one stop digging.” On October 17, the U.S. debt was $20,439,686,602,058. That’s about $62, 641 dollars per person. It is rather fascinating to me that the same Congressmen and Congresswomen who were talking about shutting down the government over the U.S. budget deficit a couple of years ago are now quite happy to pile on to the debt burden for future generations.

This $1.5 trillion increase in debt will be reflected in tax reductions for corporations and the richest Americans. The current proposal cuts the amounts that Middle Class Americans can contribute tax free to their 401K retirement accounts. This will make in more difficult for everyday Americans to achieve financial security during retirement.

The Republican leadership claims that cutting taxes for the rich and for corporations will stimulate the economy. In reality, corporations are more likely to use these payments to prop up stock market prices than to invest in new innovations. This “trickle-down economics” is the same strategy that was tried in the early 2000’s. We all remember the subsequent Great Recession. It has been well proven that this strategy does not work for everyday Americans.

Nobody enjoys passing on their hard-earned dollars to the government, but sensible people agree that we need repairs and improvements to our roads and bridges, we need investment in our public schools, and we need to maintain safety in our communities. These important responsibilities come with costs and require government support through taxes.

So, who should get a tax break? How about people and corporations who earn one.

That’s a system Middle Class Americans are already used to. When a Middle Class teacher, or farmer, or factory worker, or healthcare worker, or small business owner makes a donation to a charity, she or he gets a tax deduction, and the opportunity to pay a lower income tax. The tax break has been earned, and the community benefits from the assistance given to that charity.

So, a corporation could get a tax credit for creating new jobs. Tax credits could be offered for renovating American facilities instead of moving plants to other countries. Improved energy efficiency, innovation, and employee education programs could all be earmarked as opportunities for tax incentives. These types of incentives would promote economic growth and progress within individual communities.

Responsibility is a critical value that most of us share. Piling onto the national debt to benefit billionaire donors and corporations is irresponsible. We need a responsible tax plan and a budget that is in the best interests of everyone.