By: Matt Roy
President Obama is misguided and disingenuous with his plan to reduce the deficit. During a recent interview, he told the American people that there is “no doubt” that the government needs more revenue to reduce the deficit. The President very carefully avoided talking about where this new revenue might come from and instead vaguely suggested that it may come from eliminating unspecified tax “loopholes and deductions.” Obama likes to pay lip service to reducing the deficit, but has yet to do or propose any meaningful action that would accomplish that goal. He has offered no specifics on where the government would get this money, he already raised taxes in the fiscal cliff bill, and his premise is flat out wrong–the only way to meaningfully reduce the deficit is to cut spending.
The President wants more money from taxpayers, but he won’t say where this revenue will come from. He vaguely referenced closing loopholes and deductions for the “well-connected,” but loopholes and deductions are used by regular families all across America. Obama talked about changing this huge section of the tax code without mentioning a single specific, so tax payers have been left wondering “how will this new tax increase affect my family’s finances?” So, what will be closed? Charitable deductions? Real estate deductions? Mortgage deductions? We don’t know because the president won’t say.
President Obama already got his tax increases in the fiscal cliff deal. Everyone who earns a paycheck saw their taxes increase two percent as payroll taxes increased to 6.2%. Individuals and families earning over $400,000 and $450,000 respectively also had their federal income tax rates raised to 39.6%, up from 35%. Obama asked for higher taxes and, unfortunately for American families, he got them. As this week’s Congressional Budget Office report showed, using tax increases as a strategy to reduce the deficit is like putting a Band-Aid over the hole of a sinking ship. Technically, it contributes to a solution in a very minor way; practically, it just wastes a Band-Aid (or taxpayers’ money).
Our President continues pushing the erroneous narrative that reducing the deficit requires a “balanced approach” of both increasing revenues and cutting spending. Annual spending under the Obama administration has skyrocketed while annual tax revenue has remained relatively steady. If the total amount of tax revenue taken by the government year-to-year is more or less even, it’s obvious that the increase in the deficit is due to increased spending. Simply put, the problem is not that the government takes too little; it’s that it spends too much. The President did mention spending cuts in this interview, suggesting that they could come through health care reform or eliminating government waste, but moments later called for continuing government investments–code for spending. So Obama’s “balanced approach” is more taxes, and more spending.
President Obama wants taxpayers to sacrifice more of their money without having to reciprocate with the slightest bit of fiscal restraint himself. Obama, after just recently raising taxes on most Americans, now wants even more money through unspecified methods and wants to continue spending at unsustainable rates. If Obama can’t even provide American taxpayers with specifics of how he will raise their taxes and, more importantly, what spending he will cut, then he’s just not serious about reducing the deficit.