Lame Duck Must Confront Tough Decision on Taxes
The central decision confronting this lame-duck session of Congress is what we must give up to bring the federal budget closer to balance, including tax cuts for high-income Americans.
In 2000, we had a $236 billion budget surplus. But following 9/11, our nation fought two wars – and cut taxes rather than pay for them. A financial meltdown sunk us into the deepest recession since the great depression, reducing tax revenue and prompting new stimulus spending.
The wars exacted real fiscal and human costs. War spending totaled $1.3 trillion dollars through 2011. And 100,000 American troops served overseas – disproportionately from rural areas and modest-income families. More than 6,600 died. Another 45,000 to 90,000 have suffered traumatic brain injuries with persistent symptoms requiring specialized care.
While service members and their families made profound sacrifices to make our nation secure, the rest of were not asked to pay even the wars’ financial costs. They were added to the deficit. We received a tax cut.
It is appropriate to ask the richest Americans – those who can afford it – to give up their tax cuts as their shared sacrifice to reduce deficits and make our nation more secure. Repealing their 2003 tax cuts would raise $850 billion over 10 years. That would cover 2/3 of direct war costs.
That would include reinstating limits on itemized deductions and personal exemptions for upper-income taxpayers, going back to taxing their corporate dividends as ordinary income, taxing high-income capital gains at 20 percent, and reinstating the tax rates of 36 and 39 percent on income over $140,000. Alternatively, tax revenues from high-income taxpayers could be raised by further closing their tax loopholes without raising the top tax rates.
Revenue should also be raised by tightening loopholes on the estate tax for the very wealthy. The current year estate tax credit exempts $10 million from taxation for a husband and wife. But loopholes allow wealthy families to exempt several times that amount from taxation.
The estate tax raises revenue and levels the playing field for ordinary Americans competing for land and markets with those born to great wealth. It protects the free enterprise system, by countering the concentration of wealth and control in the hands of the few.
The richest Americans control a larger share of wealth and income than at any time in our nation’s history. We need their help in reining in the deficit.
Where Did the Term Lame Duck Originate?
The phrase lame duck was coined in the 18th century at the London Stock Exchange, to refer to a stockbroker who defaulted on his debts. In 1791 Mary Berry wrote of the Duchess of Devonshire’s loss of £50,000 in stocks, “the conversation of the town” that her name was to be 'posted up as a lame duck.' In the literal sense, it refers to a duck which is unable to keep up with its flock, making it a target for predators. Source: Wikipedia.org.