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Can candidates answer this tax and spending question?

November 9, 2015

If you think candidates and politicians speak the whole truth and nothing but the truth, a lot of people have a bridge to sell you.

Billed as an “economic and business-centered debate” the upcoming GOP debates tomorrow  are supposedly crafted  to reveal at least some inkling about the candidate’s economic policies in detail.

We’ll see.

Everyone up there is going to have a headline version that “is good for the American people.” The focus will be on decreasing taxation rates on personal and business income at the Federal level and “reining in spending.”

Four years ago, one of the many reasons given for the collapse of Mitt Romney’s presidential bid was that he “scared people” by naming specific programs and spending funnels that needed to be severely curtailed or restructured. It was a tailor-made campaign topic for his opponent.

This year the clarion cry seems to be “give us real details and specifics of your plans.” It remains to be seen how much truth the electorate can stand prior to the primary elections, because the truth ain’t pretty.

Every analysis to date has made the point that you can’t just dry up incoming funds without a corresponding  reduction in spending, something most people who are making less than they did ten years ago understand.

Program spending, particularly the much-maligned entitlement programs, i.e. pension and disability payments and now government mandated and taxpayer funded medical care will be a highlight of the differences.

Adding enough new jobs to cover shortfalls variously estimated at from 1.5 to 18 trillion dollars that result from lowering the tax rates sounds great but producing them fast enough to offset front-end spending cuts would be a feat worthy of beatification.

Here’s the unasked (at least to date) question.

Mr. or Ms. Candidate: Given that the always popular back loaded “drastic spending cuts” never seem to materialize, will you make the revenue cuts or spending cuts first,  and what will you do when it forces across the board program spending reductions?

No one is so dumb that they don’t realize that income taxes are just one of many Federal revenue cash cows.

What happens when revenue reduction produces the inevitable political backlash?

There are multiple revenue streams still available. You could:

Raise the Federal gas tax. Add an excess profits tax. Increase Federal fees for things like national parks or mining permits. Make all Federal highways toll roads. Tax the internet. Invent other new tax categories. Or, simply raise taxes back to their pre-2017 levels.

Most reasonably unbiased experts as well as people with more than three brain cells agree that the first thing that the country needs is a legislative firewall prohibiting spending above our means, i.e. a balanced budget amendment.

State governors deal with that constraint all the time. Their populations whine and stomp their feet, but in the end, the governor who most fairly distributes the pain becomes the multi-term officeholder.

It would be silly to even bother with whose plan has the lowest or most equitable tax rate, unless their first official act would be to demand and get a “do not pass go” card in Congress.

It’s a simple question. Will you put some teeth into the enabling legislation that would get the country out of debt and make it possible to allow citizens to keep more of their own money?

Listen for that question, or an answer that incorporates it, and judge each speaker on the plausibility and merit of the answer they give.

The rest of it is just so much hot air.

From → op-ed

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