Veek, we have a spending and a revenue problem. Modern society requires a fairly large government. The fact is most people want "smaller government" until we start talking about what we cut.
The real issues are the explostion of Medicare and Social Security coss as people get older, couple with historically low tax rates.
A lot of the rest of the debate -- defense, EPA, etc. -- is quite honestly fluff and not huge ticket items.
Jeff, we agree that we have a spending/debt problem. It dwarfs everything else. We also agree we have a revenue problem. We disagree that we have a tax problem. We are in such a hole, tax increases won't fix it. We need to grow the economy and generate revenue that way in getting more people to make more and pay more. We have historically low TAX Revenues, high unemployment and volatile stock market do that. The top 1% hasn't been a static group of people; they've mostly made their money in capital gains and not base salary.
The income tax rates have been consistent. The top rates went from 38 to 35% in 2002. Before that they were at 39.6 from 1993 to 2002. Before that 1988-1990 it was 28%.
Remember from 1998 to 2001 we had a budget SURPLUS.
We fundamentally disagree on big government. I've seen it, it doesn't work. Name ANYTHING the federal government does efficiently.
For example, we have a school board in my county, a state department of education, and a federal department of education all that redundancy has the quality of our education declining compared to other countries that spend a fraction of what we do. There is redundancy everywhere. The GAO found 82 federal programs to improve teacher quality; 80 to help disadvantaged people with transportation; 47 for job training and employment; and 56 to help people understand finances, according to a draft of the report reviewed by The Wall Street Journal. They found $200B in overlapping programs!
I don't need the government to tell me what type of light bulb, shower head, water faucet, toilet bowl, floor tile, counter height, water temp, doorknob, toilet handle, toilet tank, toilet seat height, and I haven't even left the bathroom! Go visit the headquarters of any major federal agency and just walk around...
Is the federal government better now than it was in 1980, or 1990? Are we getting our money's worth? We also have fewer people paying federal taxes so they have no incentive to reduce spending. If we keep this up, we'll have the financial equivalent of the Weimar Republic.
IMHO Bowles Simpson had the answer but they were ignored at our economic peril.
TPC Tax Topics | Bowles-Simpson Plan Summary