The debate over how to reduce the national debt has pitted conservatives against leftists regarding taxation. Both sides must give some on their ideological concepts to craft a realistic plan to regain control over our debt.
Few issues bring out ideological differences more so than taxes.
For conservatives, the only good tax is one that’s lowered. Freeing wealth from the stifling grip of government is the surest road to prosperity.
But leftists believe a huge safety net is necessary to achieve a stable society. Higher taxes mean increased investments in items like education and health care.
The question of how to reduce the national debt has compelled political rivals to sharpen their daggers.
Republicans in the U.S. House of Representatives have a plan to lower the debt by cutting spending and reducing the personal and corporate tax rate. Democrats, however, believe raising taxes on higher-income earners will do the trick.
Who’s correct? Both of them, in a way.
U.S. Rep. Peter Roskam of Illinois has been promoting the GOP plan while Congress is on recess. He stopped by our office last week and discussed the proposal.
By restructuring how the federal government administers Medicare and Medicaid and lowering tax rates, Republicans believe perhaps 1 million new jobs will spring up in the first year. And more jobs will mean increased tax revenues and, eventually, a lower debt.
President Barack Obama responded a few weeks ago by reiterating the standard Democratic line. Wealthier Americans must bear the brunt of this, he said.
As Roskam declared, tax cuts can be economically stimulative. Companies might hire more people or raise workers’ salaries if they keep more of their own money — it just makes sense.
But this doesn’t happen all the time. Firms often use additional income as bonuses for executives, for example, thus thwarting the intended growth in jobs and the resulting increase in tax revenues.
Neither Republicans nor Democrats have all the answers on this issue. Both sides will need to be more flexible.
Democrats must grasp the reality that the kind of social spending we’ve engaged in cannot continue any longer. And Republicans have to come to terms with the fact that taxes will have to be raised to some extent on most people.
Ideological principles are not infallible absolutes. Lowering our debt will mean negotiating measures, however politically unpopular, that everyone must accept.
Contact Jerry Moore at (630) 368-8930 or email@example.com.