Senator John Thune
Over the last year, the debate in Washington has centered on the themes of taxes and spending and whether we tax too little or too much. There is also a misconception out there that if we just taxed more we would not have this problem. However, the math does not support those claims.
The example most often used by the president or some of my Democrat colleagues is to close tax loopholes on corporate jets. However, this plan, according to Democrat sources, only increases revenues by $3 billion over 10 years. There are also plans that would remove tax benefits for domestic oil and gas exploration, a plan that would likely result in higher prices at the pump as oil companies pass additional costs along to consumers. The Joint Committee on Taxation estimates that this would raise $10 billion over 10 years. While these proposals are popular talking points for many, they don’t begin to solve this enormous problem. Together those two proposals would plug the projected 10 year federal budget deficit for seven hours, not even a full day’s work.
To take it one step further, if you taxed everyone who earns over $1 million at 100 percent for a single year, it would generate approximately $893 billion. That would only pay for the deficit for 229 days, not to mention the other problems associated with an unbelievably punitive and unrealistic 100 percent tax rate. While raising taxes on the rich may sound nice and be easy for everyone involved, it is not a viable solution to reducing our nation’s $14.3 trillion debt when existing federal spending has resulted in 40 cents out of every dollar spent being borrowed. With the near record national unemployment rate at 9.2 percent, taxing our way out of this problem is not a practical solution.
We are facing a multi trillion dollar problem, not a billion dollar problem, and the only way to get out of this situation is to change the way the Federal Government has been operating – which means working to live within our means and reforming the federal budget process. Spending got us into this mess and cutting spending is a critical component to getting our nation growing again.