Could a Fairer Tax Code Protect Benefits, Close the Deficit and Speed Growth?Audio, Slider Monday, January 28th, 2013 Would you like to receive e-mail alerts when we have breaking news? Click here!
CHARLESTON, W.Va. – Republicans in Congress want cut Medicare, Medicaid and Social Security in order to close the federal deficit. However, other people say it would be fairer – and smarter – to use progressive revenue, such as broadening the tax base and closing tax loopholes.
Republican vice-presidential nominee Paul Ryan favors raising the age when people can get Social Security and Medicare. Kenny Perdue of the West Virginia AFL-CIO says $1.5 trillion in various program cuts already have been locked in over the next 10 years. He says it’s unfair to ask older working people to give more.
“Don’t make a target of these individuals and say ‘you’ve got to work until you’re 68, 69 or 70,’” he says. “They’ve paid their dues, and I don’t think they deserve to be put into a situation where they’re wondering where their next meal’s gonna come from.”
The White House says another $1.5 trillion in spending cuts or revenue would stabilize the deficit.
Andrew Fieldhouse, federal budget policy analyst with the Economic Policy Institute, likes the idea of creating a more progressive tax structure. Capping itemized deductions for the wealthy – as proposed by Mitt Romney – and raising the capital gains tax are two methods, he says.
“There’s more than enough revenue to be had from the tax code: broadening the tax base, eliminating itemized deductions,” Fieldhouse explains. “Progressive revenue could easily be enough to stabilize the debt over the next decade or longer.” Taking that approach would slow the economy less than taking money from working families, he adds.
Purdue suggests it would be smarter for the nation to put a small tax on Wall Street speculation than to cut benefits for the middle class. “When we make money, we spend money,” Purdue says, “and when we spend money, it creates an economy that lasts forever.”
Fieldhouse contends that part of the reason the economy has been so weak and unstable is the rising gap between the rich and the middle class. He says it’s not good for long-term growth that Warren Buffett pays a lower tax rate than his secretary.
“We’ve seen real wages of median working-age families fall back to their 1994 level, roughly,” Fieldhouse says. “You’re creeping up on two decades that have been lost, income-wise, for the middle class.”
West Virginia’s low-wage work force and older population means a quarter of the state’s citizens depend on Social Security, and nearly as many depend on the federal health care programs. That’s more than almost any other state.