“THE AMERICAN FISCAL SENTIMENT IS OFTEN OVERLY RICH-AVERSE, BUT MITTENS WAS STILL DREAMING.”
Words | Jonathan Holtby Pictures | Jonathan Holtby
In the past election, you may have been the 47 percent of America that the Republican candidate did not care about. Or, alternatively, a contributor of the over 40 percent of American wealth that is contributed by just one percent of its earners. The Economist magazine, identifying in one of the best arguments during the election cycle the division in perspectives about wealth redistribution, showed that you don’t have to be one or the other, but in the American electioneering, citizens were too often either maligned, hardworking beatniks, owed more than they got, or they were a ‘job creator’ whose wealth generated, for millions, prosperity they hadn’t earned.
He would also save money that would be spent on Iraq, Afghanistan, and Healthcare. His plan is a bit bold. Savings in healthcare would be great, but they are mostly hoped-for under Obamacare, and you don’t save money from not being at war, you save money from cutting the defence budget, which President Obama hasn’t said he will do yet. Increasing revenue from high earners will also be a nebulous promise, until he provides details about which exemptions are to be cut. The Republicans on the hill are violently opposed to raising the actual tax rate in any way. Still, at least his plan recognizes the need for both a r eduction in spending and an increase to revenue.
Though it is in some ways more fun to be argumentative, we do not really need to be polarised to disagree about this. Taxation is a challenging moral and technical issue that often boils down to something deliciously simple. The budget deficit arguments, for instance, have intricacies, but generally nations earn when their citizens create, trade, purchase, and earn. They spend on armies, healthcare, research, the poor, the old, and the unemployed. And if they spend more than they earn, they have a deficit. Earn more than they spend, and have a surplus. These either add to, or reduce, the public debt.
Romney’s solution, by contrast, was a harsher cut to federal spending: down to 20 percent of gross domestic product. (Obama’s is only 4 trillion dollars, far less). He would have cut taxes almost universally, and also eliminated some of the deductions offered to incentivized industries. He hoped, in this way, to keep tax revenue pretty much even. While he had hoped, he said, for increases in revenue, these were almost entirely speculatory. He was banking on a growing economy that would generate more money for the federal coffers, growth incentivized by reductions to regulation and the repeal of Obamacare, intended to make business’ work easier. Generally, banking on economic growth was a safe bet for both candidates. Ultimately, no one expects another four years of poor economy or recession. But that means revenue should increase no matter who is President.
Because Americans haven’t been shedding weight for some years now, they have amassed… some debt. Over 16 trillion dollars of it by the end of this year. They have been adding to that total to the tune of over one trillion dollars for four years running now. And a big portion of the problem is that it was not insignificant during the reign of the last administration. -THERE’S A VISINE FOR THATThe two Presidential candidates running for office in the US had a policy on that fiscal deficit. President Obama proposed keeping tax rates depressed and investing in job retraining and education. He hopes to increase federal revenue by raising taxes on high-income earners to 35% and 39%, where it was pre-Bush, and disallowing exemptions that cause income to be taxed at a lower rate if it is earned outside of America, or in certain incentivized industries, or is paired with contributions to charities.
The question, if both candidates care for low taxes, really seems to be: What is a better idea, decreased business regulation and federal spending, or consistent federal spending and heaping a larger burden upon highest-income Americans? And does military spending need to stay at current levels, or can it be reduced after the war? -I WISH I MAY, I WISH I MIGHTThe statistics that indicate a growing economy are easy to also translate into direct benefits for individual citizens. When businesses are making money, and they are increasing sales and exports, they are more inclined to spend on their employees and increase the number that they have of them. It is not a guaranteed relationship, but enough successful companies crave growth and top-end employees that it is reliable enough.