An Ounce of Cuts Is Worth A Pound Of Taxes

December 11, 2012

An Ounce of Cuts Is Worth A Pound Of Taxes
By Gretchen Hamel

You know that feeling you get when you are watching Jeopardy and the answer is so obvious, but the contestant just doesn’t get it? You scream, “Come on!” at the TV. “Everyone knows George Clooney played Dr. Doug Ross on ER!” The contestant gets it wrong, your remote goes flying, and the night ends on a low note. It’s the same feeling I get lately as everyone involved in the fiscal cliff talks continues to focus on the presumed problem–taxes. But the answer couldn’t be more obvious–spending.

Some are starting to grow wise to the tax hike diversion and are sounding the alarm. According to Sen. Tom Coburn, an outspoken leader for sound fiscal policy, Obama’s plan would only affect 7 percent of the deficit.

All this talk for seven percent?

International Monetary Fund Managing Director Christine Lagarde told CNN “an agreement that would only extend tax cuts for the middle class without addressing spending or entitlements would be insufficient to reassure the rest of the world.”

Still, the negotiations have hit the proverbial tax debate brick wall. With the way the debate goes back and forth over raising taxes, you would think Washington believes the deficit can be wiped out with one quickraise (or lack thereof) of the magic tax wand.

In Washington the president’s plan to return to the top marginal rates of the Clinton era is being treated by some like a fun throwback to the plaid-wearing, “Friends”-watching prosperity of the 90s. It isn’t that simple.

The doctor wouldn’t prescribe you Pepto-Bismol to treat a heart attack. And raising taxes won’t reduce the deficit enough to matter. Spending is the driver of the debt, and overspending cannot be ignored, kicked down the road or handed off like bad vegetables to the dog under the table.

If the negations continue with taxes as the main point of contention, our day of reckoning will still be waiting on some yet-to-be-determined date, and the fiscal woes we face will persist.

I love the 90s as much as the next guy, but it’s time Washington got real and admitted the debt, deficit and spending have all gotten out of hand. The 90s-era tax rates won’t fix 2012’s spending problems—only cuts will.

 

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