IMAGINING A COMPROMISE...

     I'm a bit of an old-school politician in that I understand that in order to get something, you must also give something. And that process had a word: compromise. Now, as usual, there's a lot of talk about taxes and deficits going on in Washington D.C. but mostly it comes across as posturing. All talk and nothing to show for it, except of course, extreme proposals like Rep. Paul Ryan's budget which of course balances the budget on the backs of the poor and middle classes (a nebulously defined term - I'm actually middle class as per the government...imagine that! Seriously, I have to imagine that because reality certainly doesn't conform to it) and while the Democrats have an idea of their own, it doesn't appear to have much in mind when it comes to ending the idea that the government spend more than it takes in. As seriously flawed as Rep. Ryan's budget is, at least he's trying to balance the fucking thing.

     And seriously, what's wrong with that? That's how we all have to live. Why should the government get a reprieve from living within its means or asking more of its citizens if spending does need to increase? I'm cool with deficits during declared wars (i.e. a national emergency), to help fund infrastructure projects which are designed to last for decades (e.g. the interstate highway system), and to aid in lessening the pain of an economic depression...but I'm not cool with deficits being run any other time. Our excursions in Afghanistan and Iraq were not declared wars so a surtax should've been created to pay for those wars. Recessions are not depressions and they should be paid for with rainy day funds, not deficits. And yearly budgets should be paid for with an appropriate amount of tax revenue, not deficits. If you're spending more than you're taking in you are either spending too much or taxing too little...or both.

     But about the debt. As of now, it stands at 16.7 TRILLION dollars. Click on the link for an update. We should be paying that off, right? But seeing as how it only counts up, clearly we're not. I believe it was President Andrew Jackson who made it a point to pay off our debts...and he did. He even threw a party over the achievement.

     Anyways, I'm blabbing so let me get to my compromise proposal. We have the Clinton-era tax rates which were set up during good economic times and actually resulted in a couple years of surpluses. We also have the Bush-era tax rates favored by Republicans (big surprise, I know). The differences between them are not much and that's where I'd like to start.

(image source)

     The left percentage column shows the Clinton-era rates and the right percentage column shows the Bush-era tax rates.

     My proposal is this. Restore the Clinton-era tax rates but create two tiers for spending. The first tier is for annual government spending. This tier will be based on the Bush-era tax rates. In other words, the money that comes in from taxes up until those percentages is ear-marked for government spending. The revenue that comes in from the remaining percentage (i.e. the Clinton-era rate minus the Bush-era rate) is ear-marked for paying down the national debt only.

      Using the $35,500 - $86,000 quintile for reference (25% under Bush; 28% under Clinton): The revenue brought in from the 25% part is for government spending and the remaining 3% goes toward paying down the debt.

      Once the debt is paid off, the Clinton-era rates disappear leaving the Bush-era rates only and permanent. Having this set-up I feel will allow for both parties to figure out how to balance the budget and get used to spending within the Bush-era rate framework. Plus, there's incentive for both parties to work together because as soon as the debt is paid, taxes go down. It feels like a win-win for everyone.