After heroic feats of arithmetic and a
your-guess-is-as-good-as-mine interpretation of opaque rules and
guidelines, millions of Americans will file their taxes by this Monday,
April 15th.
Then there’s the bad news.
For anyone who takes a peek at where his or her
income tax dollars are going,
Tax Day can be maddening. Outsized chunks of our taxes fund the
military, rising healthcare costs, and interest on the federal debt.
Comparatively tiny amounts go to education, science, alternative energy,
and the environment.
Category by category, this is contrary to what Americans want -- and
what we the people want is pretty clear. Despite near-constant news
about how polarized our nation is, a careful look at opinion polls
indicates that a strong majority of Americans actually have a coherent
to-do list for Washington: we want more jobs, smaller deficits, more
education funding, reduced reliance on fossil fuels, higher taxes on the
wealthiest, plus -- the kicker -- Medicare and Social Security benefits
preserved. You know, it’s the typical story of wanting to have our cake
and gobble it down, too. Right?
Wrong. What’s virtually unacknowledged is that all these things could
be done at once. Far from being an impossible set of demands, the
collective opinion poll version of the wisdom of the American people is,
in fact, a smart set of solutions -- or at least it would be, if we had
a government capable of following our wishes. That collective wish list
would address most of this nation’s urgent challenges, while making us
smarter, safer, healthier, less indebted, and better invested in our
long-term future. Here’s how.
First -- no shocker -- it's the economy. According to a recent Gallup poll consistent with previous findings on this issue,
99%
of Americans want job creation bolstered. Lawmakers only have so many
options when it comes to directly affecting job growth, and one of the
quicker ways is to invest in repairing our crumbling infrastructure,
currently
rated D+
by the American Society of Civil Engineers. Such repairs would require
substantial new spending in the near term, which would seem to conflict
with another top priority of Americans:
92%
say cutting spending and reducing deficits are also important. But we
can invest in jobs and infrastructure and make this money back many
times over just by doing the other things Americans support.
First,
though, let’s toss in another issue that comes in high on American
priority lists: expanding education funding. Critics say that support
for more education spending shrivels when proponents are threatened with
higher taxes on the middle class. But there’s no need to hike
middle-class taxes; we can raise taxes only in ways favored by a
majority of Americans. Do that and you could fund pre-kindergarten to
research-university public education in the style that around 60% of
taxpayers consistently
support, and with money left over.
Case in point: a
strong majority (73%) of Americans want to reduce our reliance on oil, gas, and coal, while a
narrower 50%
want action on climate change. A carbon tax addresses both issues by
making innovation in alternative energy attractive, while reducing
carbon output. Championed by economists across the ideological spectrum,
such a tax has the added benefit of raising an estimated
$125 billion
annually with a tax of $25 per ton of carbon dioxide. Some of that
money could be used to offset higher energy prices for low-income
Americans and the rest for those generous increases in education
funding.
We can similarly resolve this country’s long-term budget woes just by acting in ways the public is clamoring for.
Polls show that Americans want less government spending and smaller
deficits.
To be clear, this issue has been the subject of significant
fear mongering and little sound information. Deficits are not an
immediate problem, as even House Speaker John Boehner recently
acknowledged, since at the moment lenders are basically
paying
Uncle Sam to take their money. But deficits could become a problem down
the road when interest rates rise. The key is to reduce deficits before
that happens, so interest on the federal debt doesn’t eat up far more
of our tax dollars.
There are few specific federal budget items that a majority of Americans agree should be cut. But according to Gallup,
58%
of us favor “major cuts in military and defense spending.” Ask the
question in more detail and you’ll find that the average American wants
an
18% reduction in the Pentagon’s budget. That can be done
without compromising
national security because we currently spend extraordinary sums on a
force structure tailored to the Cold War and throngs of outdated or
wasteful weapons systems -- like the problem-ridden, historically
over-budget
F-35 Joint Strike Fighter that has already drained $84 billion from the U.S. Treasury, and is projected to cost
$1.5 trillion over its lifetime.
So let’s fundamentally rethink the way we conduct national security
and match our armed forces to actual threats. Downsize the present
American global mission and our eternal “war on terror,” bring the
military’s arsenal into line with reality, and you can save around
$1 trillion over the next decade from the Pentagon budget without blinking.
Next on the list: polls show that
two-thirds
of Americans want the wealthy and corporations to pay more in taxes,
and a blockbuster majority of 90% wants a simpler tax code. It won’t
surprise you to learn that the present tax code is a
playground for the rich and their talented accountants.
Americans for Tax Fairness, a coalition of 280 organizations (including my employer
National Priorities Project),
identified 10-year budgetary savings of $2.8 trillion simply by
limiting or eliminating a plethora of high-income and corporate tax
loopholes.
So far, by following the people’s wisdom, we’ve managed to invest
significant sums in rebuilding education, the country’s infrastructure,
and energy security, while achieving long-term deficit reduction. Still,
one of the biggest challenges remains.
This week, Barack Obama became the first Democratic president ever to
propose lower Social Security benefits. On this, polling tells us,
Americans couldn’t be clearer. From progressives on the left
to the Tea Party on the right,
nearly 90% of Americans want Medicare and Social Security benefits kept intact.
No matter what you’ve heard -- including
claims that the program is, over the long haul,
doomed -- safeguarding Social Security is easy. The system is on solid footing until
2033.
Then, only simple changes are needed, like altering the payroll tax
(Social Security’s dedicated funding), so it applies to all wage income
instead of just your first $113,700. Most Americans don’t realize that
Social Security taxes disappear on higher income. Simply by
correcting
that regressive policy and making a few other obvious tweaks, Social
Security will be ship-shape in its present form into the distant future.
Now for the big ugly: Medicare. Healthcare costs are the real
long-term budget-buster facing this country and on this issue Americans
want it all -- benefits preserved and spending contained. In fact,
there’s a way to do both.
Estimates suggest that
a third
of health spending in this country is wasted in a system of
uncoordinated, fee-for-service care. Some primary-care organizations
have, however, bucked the trend by favoring a new “
bundled payments”
model of healthcare in which doctors are paid for their overall
treatment of a patient rather than one test and procedure at a time.
Organizations that made such changes reduced costs by
15% to 20% without compromising quality.
Medicare is pilot-testing such changes with promising results.
Massachusetts lawmakers have already passed landmark cost-containment
legislation
that will usher in this new form of payment across the state’s
substantial health sector. We should be racing to implement these
changes nationally. Since there isn’t a good estimate of how much could
be saved in Medicare if such major changes were implemented, let’s be
particularly conservative and estimate only a 5% savings. That would
still shave around $400 billion from federal spending over a decade.
With these lower health costs, as well as smart reductions in
military spending and limits on tax loopholes, we’ve tallied more than
$4 trillion in savings over the next 10 years. Use a fraction of that to
fund a job creation/infrastructure repairs program
and we’ve still achieved around $3.5 trillion in potential deficit reduction. Since that’s substantially more than experts
recommend, we’ve actually freed up extra cash that could be used for any number of other priorities.
And all we did was pursue changes consistent with a people’s budget
that clearly emerges from opinion polls -- though you can depend on
Washington to ignore such possible reforms. The outsized influence of
money in politics plus gerrymandered congressional districts are among
the structural problems that reward our elected officials for serving
narrow special interests instead of the will of the people. And though
we the people have clear priorities, we don’t do a good job of holding
our elected officials accountable for pursuing a roadmap for the greater
good. Still, that roadmap is there, if we ever want to use it.
© 2013 Mattea Kramer
Mattea Kramer
is a research analyst at the National Priorities Project in Northampton, Massachusetts and co-author (with Chris Hellman) of the new book, A People's Guide to the Federal Budget.
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