Citizens for Tax Justice (CTJ) has an interesting analysis of the tradeoffs Mr. Bush thinks are appropriate in order to reach what is claimed to be a balanced budget in 2012. (Or course, it wouldn't really be balanced, because, in addition to the impracticality of much of the budget, it ignores the long-term AMT problem, and it disregards the long-term costs of Bush's war of choice in Iraq.)
The article's title says a good bit of the story: Bush's Proposals to Slash Human Services Reveals the True Cost of His Tax Cuts. Even though the budget deficit is expected to be at least $410 billion in FY 2009, Bush claims it can swoop down to zero by FY 2012. That's even with making his tax giveaways for the wealthy (i.e., the 2001-2003 tax cuts) permanent, at a cost of $249 billion in 2012.
How is this magical trick to be done. While he gives to those at the top, Bush would take away from just about every other program that performs important public services--about $229 billion less would be spent on education, veterans, the environment, transportation and health care in 2012 because of the cuts.
Under the Bush budget proposal, federal spending on veterans’ benefits would be 9 percent lower in 2012, as a percentage of the economy, than in 2008. Education and social services would be a fifth lower, natural resources and environmental programs over a fourth lower, transportation a third lower and community development over 62 percent lower. Medicare spending in 2012 would be 9 percent lower than in 2008, as a percentage of the cost of maintaining current services.
Now, one of the regretable facts about the Iraq war is that our need to spend money for the care of war veterans will escalate sharply over the next twenty to thirty years as the many thousands of wounded and disabled vets continue to need care. We now have accepted the scientific consensus that global warming is upon us and that we will face dire environmental consequences if we do not act now to prevent the worst damage. An aging population will need more health care, not less, unless we want to return to the specter of the pre-Roosevelt and Great Depression years when elderly citizens were left destitute, homeless and at the mercy of whatever charity might help them out (or not).
Instead of cutting these programs in order to provide unneeded tax breaks to people that are making $200,000, $500,000 or millions of dollars a year, we should be increasing these important programs and let the tax cuts die their natural death for anybody making $200,000 a year or more (at least). Keep the estate tax, and don't set the exemption so high that it lets huge estates off the hook. A $2 or $3 million exemption level and a 55% rate on any amount subject to tax above the exemption level would be workable. And for goodness sakes quit eviscerating the business tax by letting businesses expense new purchases of long-term equipment that should be capitalized under an income tax system.
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