NY Times: The Real Spending Problem Is Tax Breaks
Not actual spending, not $16 trillion in debt, not borrowing 43 cents for every federal dollar spent, not wasting taxpayer tax dollars on pork and projects that should be funded by private entities, not hundreds of billions in cost overruns, not the POTUS using up millions to fly across the country to make a 30 minute speech that could be made at the White House…..nope, tax breaks, according to the anonymous NY Times editorial board
Each year, the government doles out tax breaks worth $1.1 trillion. That is more than the cost of Medicare and Medicaid combined. It is more than Social Security. It tops the defense budget, and it tops the budget for nondefense discretionary programs, which include most everything else.
Tax breaks work like spending. Giving a deduction for certain activities, like homeownership or retirement savings, is the same as writing a government check to subsidize those activities. Functionally, they mimic entitlements. Like Medicare, Medicaid and Social Security, they are available, year in and year out, in full, to all who qualify. Yet in budget talks, Republicans ignore tax entitlements, which flow mostly to high-income taxpayers, while pushing to cut Medicare, Medicaid and Social Security.
Except, there are deductions in the tax code, or, as Dems are fond of calling them, loopholes, and most of them make sense. The NY Times surely takes advantage of quite a few of them, such as for software, phone purchases and usage (wireless and wired), automobile usage, incidentals on business trips, advertising and promotion, bank fees and loan interests, internet costs, capital expenses for office equipment, supplies, and so, so, so much more. Would the NY Times, give them up? They sure liked mentioning them in their 4th quarter 2012 statement
The Company had operating profit of $44.0 million in the fourth quarter of 2012 compared with $90.8 million in the same period of 201 1. Excluding depreciation, amortization, severance and the special items discussed below, operating profit was $124.5 million in the fourth quarter of 2012 compared with $126.8 million in the fourth quarter of 2011.
Those are tax breaks. What this is is the federal government allowing people and companies to keep more of the money they earn, mostly to attempt to stimulate the economy by keeping more money in the private sector. No, it doesn’t always work. Mostly it does.
President Obama and Congressional Democrats have rightly asserted that tax breaks are ripe for cuts that could raise revenue without hurting most taxpayers. One method, as presented in the Senate Democratic plan, is to convert tax deductions, which increase in value as income rises, to tax credits, which would provide benefits more broadly and evenly among low-, middle- and high-income households.
All this would do would allow more wasteful spending by Government. It is telling that the Times doesn’t even bother to mention the meme that this extra revenue would be used for debt/deficit reduction. Because it wouldn’t. Anyhow, they mention a few types that those Evil Rich take advantage of, including
NINE-FIGURE I.R.A.’S Remember Mitt Romney’s $100 million I.R.A? Private equity partners apparently build up vast tax-deferred accounts by claiming that the equity interests transferred to such accounts from, say, their firms’ buyout targets are not worth much. No one knows how much tax is avoided this way. What is known is that I.R.A.’s are meant to help build retirement nest eggs, not to help amass huge estates to pass on to heirs.
Prick a Democrat and they’ll bleed commie red. How dare someone raise tons of money through brains and hard work that can be passed on to their heirs. I wonder if the Times will go after the Kennedy clan for this?
In this time of ill-advised budget cuts, there are surely better ways to spend that money. For $50 million, 6,000 children could attend Head Start next year.
Obama just wasted about $8 million dollars to fly to Illinois for a 30 minute speech. He surely wastes over $50 million a month on these types of travel. How much does it cost the taxpayer for him to play golf? Heck, how about cutting the $200 million spent for a reality TV show in India? $84.5 million for Amtrak snacks? Hundreds of millions for government employee conferences? $2 million for 10 cupcake startups? The list could go on an on. Apparently, though, Exxon paying $31.05 billion in taxes isn’t enough.