Columns

Brundage ’15: Should the Bush-era tax cuts be repealed for the wealthiest Americans?

By
Opinions Columnist
Friday, September 28, 2012

In fiscal year 2011, government outlays totaled approximately $3.83 trillion while revenues totaled only $2.57 trillion, leaving the nation with a nearly $1.3 trillion deficit. At this point, a common goal among most ideologies is to eliminate this deficit. The two methods of reducing the national deficit are to increase revenues or to decrease outlays, more commonly referred to as government spending.

Given these numbers, in order to have a balanced budget simply by cutting government spending, the government would need to cut over 33 percent of spending, which is entirely unrealistic, if not impossible, since the majority of government spending is mandatory: Medicare, Medicaid and Social Security. All are in need of serious reform that cannot come within a year. Spending cuts would therefore have to come almost entirely from defense and other discretionary spending, areas in which cuts would not only directly facilitate job loss but would in turn reduce revenues, thus making the already painful spending cuts less effective in reducing the national deficit.

It is therefore clear, at least for the time being, that we must either increase revenue or accept many more years of national deficits until Medicare, Medicaid and Social Security are reformed so that they do not require more revenue to reach a balanced budget.

Some sort of revenue increase is necessary, and it should come from the wealthiest – not necessarily because they owe the guilty liberal’s “fair share,” but because it is simply the most efficient way to increase revenue with a minimal blow to job creation and economic stability. As an individual’s income increases, his or her marginal propensity to consume decreases, meaning that the wealthier the person, the lower the influence of taxes on his or her total consumption. The wealthiest of Americans are not the ones who will have to fire people if their income is slightly reduced – but small business owners are, which is why tax hikes on the middle and upper middle class would likely be more detrimental to job creation.

In this debate, bleeding heart liberals are painted as having a moral argument while conservatives have the better argument from an economic standpoint, yet I find that the exact opposite is true. Given that we need to do something about our whopping national debt, it makes sense in terms of fiscal responsibility, equality, and I might even argue efficiency to repeal Bush tax cuts for the wealthy. The only opposing argument that might stand is moral – that the wealthy are more entitled to their extra bit of income than the United States is entitled to a balanced budget and a more competitive free market with ample job creation. To this, I can only say that I disagree.

 

 

Matt Brundage ’15 found it difficult to maintain a calm demeanor while writing “Bush” more than once. 

He can be reached at 

matthew_brundage@brown.edu.