Last weeks tax deal, passed by Congress and signed by President Obama, is going to cost me, and probably your family as well, at least a few thousand dollars a year. But, hey, everybody has to pitch in to help bring down the deficit and debt, right?
This legislation doesnt do that. It adds $4 trillion to the debt over 10 years, according to the Congressional Joint Committee on Taxation. It also gives away at least $70 billion of our money to fat cats.
By now youve heard of the tax gifts to NASCAR ($78 million), the Puerto Rico rum industry ($222 million) and Hollywood ($248 million).
This is chump change. Railroads will get $331 million for maintaining railroad tracks. Restaurant owners will receive $3.7 billion in depreciation breaks for building restaurants. Even teachers will get $406 million in tax breaks for simply buying classroom supplies.
As I perused the analysis, it struck me that Congress is giving public money to people and businesses for activities they would engage in without the subsidy. Think about it. Will NASCAR track and restaurant owners stop building and expanding if they dont get accelerated depreciation? Will Hollywood producers stop making films? Will rum manufacturers shut down distilleries without these tax credits?
Then there are the breaks for teachers. Ive never understood why every teacher in America doesnt walk into a fully stocked classroom. Lack of supplies isnt a funding issue, its a priority issue.
Teachers who buy extra supplies are owed our appreciation, not a tax deduction. Countless numbers of public employees dig into their pockets to serve us better, and they dont get a tax dodge.
Last weeks bill also includes tax credit extensions for married couples and those with children. Eliminate these costly subsidies, and I bet my mortgage interest deduction that people will still tie the knot, raise families and buy homes.
Yet against this backdrop, tea party members and others who want the federal government to live within its revenue stream are called extreme.
Looming in February and March is the debate over the debt ceiling and sequestrations mandated across-the-board spending cuts. Last weeks hikes and breaks werent even a week old when Democrats, led by House Minority Leader Nancy Pelosi, started calling for new taxes. And if Republicans have a cogent plan to address the ceiling and the cuts, I havent heard it.
So allow me to propose a framework. In exchange for raising the debt ceiling and easing sequestration cuts, Congress must pass a law requiring a balanced federal budget within 10 years. It must also send to the states a constitutional amendment for a mandatory balanced federal budget similar to the constitutional requirement North Carolina and the vast majority of other states have to live with.
To get to a balanced budget, each dollar of new tax revenue must be matched by an equal cut in spending. An additional dollar must be raised by eliminating tax credits and deductions.
Given their expertise in spending, Democrats should be tasked with proposing the cuts. Republicans, who love to dole out tax breaks, should propose the deductions and credits to be erased from the tax code. Each side should draw motivation from the knowledge that every dollar it produces will result in three real dollars going toward a balanced budget and a smaller national debt.
I admit, this plan isnt as good as Simpson-Bowles. In fact, no plan is superior to Simpson-Bowles. But somehow we have to get Congress to understand that in these days of annual and unsustainable $1 trillion-plus deficits, programs can no longer be funded simply because theyre based on a good idea or intention.
Our greatest national threat today isnt the Taliban, health care costs or climate change. Its our federal fiscal insanity.
In truth, weve already fallen over the fiscal cliff. Without change, the only question left to debate is the speed of our descent.
Contributing columnist Rick Martinez ( firstname.lastname@example.org) is news director at WPTF, NC News Network and SGRToday.com