Bringing Folks Back

One of the problems with the Bush tax cuts was that they removed millions of folks from the tax rolls. Contrary to the endless claims of the Democrats, more than 80% of the cuts went to those in the middle class, not to the wealthy. Since the wealthy pay the majority of all taxes, the cuts were clearly skewed towards lifting the tax burden on those in the middle. Sadly, however, one of the side effects of this modification is that there is now about half of all Americans who pay no income taxes at all.

The so called fiscal cliff provides an opportunity to rectify this mistake. Everyone should share in the tax burden, even those who are not wealthy. The amount paid does not have to be large, but everyone ought to feel as if he or she is paying for government. It is the only way to take away the belief that one can get something for nothing from the government.

This, more than any other reason, is why it would be beneficial to let all the tax rates rise on January 1. There would be millions of people returned to the tax rolls. They would not be happy, but it would be good public policy. Let the rich pay more, but let the middle class pay more as well. Couple this with the spending cuts that will be the result of sequestration and the federal deficit will shrink by many hundreds of billions of dollars.

There may be a short recession as a result of the changes. No one wants that, but it is the price that must be paid for the years of overspending. There is no road left on which to safely kick the can further.

The true choice is between a mild recession now or a possible depression in a few years when the USA can no longer borrow funds.