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  • America to Debt Commission: Read Our Lips—No New Taxes.

    Last week, the President’s debt commission held its kick-off meeting.  The National Commission on Fiscal Responsibility and Reform, a group of 18 lawmakers and policy experts, has been tasked with proposing a solution to the mounting financial crisis facing the United States government.

    As we show in our 2010 Budget Chart Book, federal spending is on track to skyrocket as the population ages and more Americans become eligible for entitlement benefits, which include Medicare and Social Security.  Together, entitlement programs represent a $46 trillion long-term unfunded liability.  If this situation is ignored, entitlement spending will eventually consume the entire federal budget, crowding out spending on either domestic priorities, such as education and transportation, as well as defense spending.

    There is a general consensus across party lines that something must be done to reverse this fiscal outlook.  The debate lies in what to do.  Advocates of big government and increased spending embrace higher taxes, such as a value-added tax, to control federal spending.  On the other side are those who think the federal spending has grown too large already, and that spending is currently out of control.  Increasing taxes further than their already-high rates would cripple economic growth.

    Heritage falls in the second category and according to a recent poll from Rasmussen, so do the American people.  Rasmussen reports that 69 percent of Americans oppose higher taxes as a mode to reduce the deficits.  And when it comes to how we got into this mess in the first place, 83 percent of Americans say the size of the deficit is due to politicians’ unwillingness to cut spending, not due to a need for more taxes.

    In 2009, The Tax Foundation conducted a poll asking whether Americans would be willing to pay their share of the federal deficit, which amounted to $8,798, in order to balance the budget—81 percent said no.   This sentiment appears to be enduring, regardless of the sum: in March of 2006 and 2007, the same question was asked using instead $2470 or $1,789, respectively.  In March 2006, 79 percent said they would not be willing to do this.  In March 2007, 76 percent of respondents answered the same way.

    When asked by Harris Interactive in March 2007 if it was necessary to increase taxes in order to decrease the deficit, 71 percent of Americans said that it was not.  This is in keeping with what the historical averages of taxation and spending show: as Heritage’s budget expert Brian Riedl explains, “…as deficits expand by 5.9 percent of the economy, nearly 90 percent of the growth will come from higher-than-average spending, and just over 10 percent from lower-than-average revenues.”

    The stance of the American people is crystal clear, and as in most cases, they are spot-on.  To reduce the deficit, the debt commission should look at ways to reduce spending, not increase taxes.

    Posted in Economics [slideshow_deploy]

    7 Responses to America to Debt Commission: Read Our Lips—No New Taxes.

    1. Warof2010 SF Bay Area says:

      Federal Revenue/Deficit By Year
      2007 $2.588T -$161B
      2008 $2.524T -$459B
      2009 $2.157T -$1.42T
      2010 est. $2.333T prediction <$2.0T -$1.57T http://bit.ly/a7oqvJ
      2011 est. $2.885T
      2012 est. $3.075T
      2013 est. $3.305T

    2. stirling, Pennsylvania says:

      Entitlement nation quickly becomes debtor nation (like Greece is currently), but on a grander scale. The Question of Taxes can be explained by the “Laugher Curve,” eventually you will get less from higher taxes. So this administration will realize very quickly that to take a pro tax stand will ultimately fail. Not until we get a congress and president that belives in “less is more” business model will we see the private sector grow then the jobs and revenue to the government increase. The Debt Commision is just an excuse for the “tax and spend” policy to continue and give the president cover to break one of his campaign promises, in my view.

    3. Todd, Albany OR says:

      Regarding the statement in the post that, "Advocates of big government and increased spending embrace higher taxes, such as a value-added tax, to control federal spending."

      This is like saying we should give a chronic over-eater an extra box of doughnuts each day to help them control their eating.

    4. Grand Rapids, MI - 4 says:

      Simple soultion to a complex problem: Create a 2nd currency specifically for healthcare costs inside of the United States. The new electronic currency would be a domestic currency. The new additional electronic domestic currency would be distrubuted to American citizens. Equal healthcare for constituents as for members of Congress is freedom/justice/liberty. A few points:

      1. If all people were covered by a national plan and not needing employer based insurance, the city government of Grand Rapids, MI (current work force of between 1,501-1,826 persons) would not have to tax their residents the $35,000,000.00 (thirty five million dollars) spent annually from their budget(s) for their current employees and ex-employees (retirees) under 65 not on Medicare/Medicaid. If this was true for other Governmental entities …. The state of Michigan yearly pays to insure 500,000 persons.

      2. Each Congressional office should immediately release 2009 health care expense(s) from budget(s).

      3. Employers, no longer having the health care expense should, in theory, be able to pay more, hire more people, increase profits and/or pay-off debt. Trickle up economics from the individual.

      Please forward to debt commission members.

    5. Grand Rapids, MI - 4 says:

      The Congress of the United States of shall legislate and design a new electronic domestic currency specifically for health care costs inside the United States. The new electronic currency will be accounted for by US congressional districts. Payments will be funded by individual US Congressional office and routed/verified through state and local voter’s registration cards. The new currency will be pegged and linked to the principal currency, the US Dollar – currently and commonly known as Federal Reserve Notes. The new electronic currency will be distributed (annually) to American citizens, hospitals and state/local Governments in a form similar to that of a bank account. US citizens and other individuals will open a HC account at any of the US banks that received assistance from the Federal Government as part of the stimulus/recovery/bailouts of 2008/2009. This new electronic currency will become the standard payment of health care claims/costs inside the United States. US banks will have new responsibilities. Under this new legislation/Constitutional Amendment, all federal employees, except active duty Military and Coast Guard, will receive Domestic Health Care Credits (DHCC’s). All US citizens will receive the same amount on average per federal employee. Any state-licensed hospital, doctors’ office, health-care clinic or other qualified medical/dental entity that requests to receive the DHCC’s from American citizens, hospitals and state/local Governments must have a MASTER account regulated by the Department of Health and Human Services and the Congressional Banking Committee. US Veterans will receive an additional 20% of DHHC’s. US Bankruptcy Courts will have the jurisdiction and duty to order the transfer of credits from individual accounts to qualified MASTER accounts for those who are incapable to do so. All accounts will be based on individuals, with individual accounts, – no joint/family accounts.

    6. Ron Southall says:

      I agree that Government needs to cut spending and it needs to start at the top. Our, so called, officals need to be the first to take cuts in their pay and pay for their own personal expenses. The past Presidents are getting entirely toooooo much money and protection that they don't need nor deserve.

      If government is to cut expenses, that means that there will have to cuts in employment and that means more people out of work.

      More unemployment insurance etc..

      People, US citizens need to be aware of the changes that are taking place with increasing speed and we all need to be educated along those lines so that we can switch jobs whenever needed.

      TV is a great place to start to educate the population on what is happening in this country. It is not being used to its highest and best use. All we get is crap from TV.

      The biggest problem is: God, the God of the Bible has been taken out of everything and He needs to be put back in His rightful place, in the hearts of all Americans.

    7. Goshen, IN says:

      Grand Rapids,

      Where will we get the money to pay for your plan? Who do you think will pay for that? The same people who pay for it under the current plan. Working US citizens and employers. Your idea makes no more sense than requiring employers to pay for employees insurance in total. The costs will be passed on to consumers and the economy will continue to struggle. Thanks for nothing, have a great day.

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