It is simply not true that something drastic "has to be done" about entitlement spending. The budget can be balanced over the next 20 years by raising taxes on the rich and cutting military spending.
Under the blueprint, the top income tax rate would rise to 39.6 percent for individuals earning more than $500,000 a year and families earning more than $1 million. That group, which constitutes the nation’s richest 1 percent of households, would also pay a 20 percent rate on capital gains and dividends, rather than the 15 percent rate now in effect.
In addition to raising rates for the very wealthiest families, the blueprint proposes to obtain fresh revenue by targeting offshore tax havens and corporate shelters. It would also scale back the array of tax breaks and deductions known as tax expenditures, perhaps by focusing on the wealthiest households, which claim an average of $205,000 in tax breaks each year on average income of $1.1 million.
The blueprint would take nearly $900 billion from the Pentagon over the next decade — the same amount recommended by Obama’s fiscal commission. It would slice more than $350 billion from domestic programs. And it would produce interest savings of nearly $600 billion attributable to reduced borrowing.Only about $80 billion would be cut from Medicare, Medicaid and other federal health programs, and nothing from Social Security.
Saturday, July 9, 2011
The Liberal Way to Balance the Budget
Senate Democrats have their own deficit reduction plan that cuts as much from the debt as Paul Ryan's without savaging Medicare or Medicaid or making any cuts to Social Security. As I have remarked before, this is not difficult to do if you are willing to let the Bush tax cuts expire. The Senate Democrats don't even do that; most of their $2 trillion in new taxes comes from higher levies on the top 1% of taxpayers: