Tax Lawyer's Blog

Walter Alarkon of The Hill reports that House Majority leader Steny Hoyer (D-Md) says that the U.S. must increases taxes to curb the deficit:

Tax increases may be necessary to rein in $12 trillion in federal debt, House Majority Leader Steny Hoyer (D-Md.) said Monday.

“No one likes raising revenue, and understandably so,” Hoyer said in an address at the Brookings Institution. “But if you’re going to buy, you need to pay.”

As Senator Jim Bunning made clear during his filibuster of the jobs bill this week, there are two ways to pay for what you buy:

1. Through the increased taxes Hoyer talks about; and
2. Through the spending cuts, Bunning has demanded.

It is by no means evident that both of these need to be done to reduce the deficits, but as I’ve said before, politicians simply lack the chutzpah to cut entitlements so they reflexively choose the path of least resistance – raising taxes on the relatively wealthy.

Alarkon continues:

Hoyer emphasized the need to reform Social Security and Medicare, but he also made it clear that raising taxes will have to be on the table.

“If need be, I am hopeful that both parties will agree to look at revenues as part of the solution — not as a gateway to higher spending, but as part of a compromise that cuts spending and balances the budget,” he added.

Hoyer, a voice for centrists in the House leadership, said reining in record debt requires a combination of spending cuts and tax increases.

“It seems to me that the only solution that can win the support of both parties is a balanced approach: one that cuts some spending and raises some revenue while avoiding extremes in either direction,” he said.

One Republican at least agrees with Hoyer:

“There’s no way you can address the size of this magnitude of the problem we’re looking at here without talking about both spending and taxes,” said William Hoagland, a former Senate Republican budget aide and now the vice president of public policy at insurance company Cigna.

Others decidedly disagree:

[Tax reform] advocate Grover Norquist said spending is the problem and that Democrats should start to address it themselves by recalling money yet to be spent on the $787 billion stimulus, $700 billion bank bailout and other increases in annual discretionary spending.

I say the federal government should eliminate waste and cut entitlements before it asks Americans for a raise. Once the bureacratic beast is made leaner and meaner, then, and only then, should we consider tax increases.

But that’s probably too much hard work for our elected officials to contemplate.

Bookmark & Share: