The Fiscal Showdown
By Buck Teller
It now appears that the showdown on the debt limit has been postponed for several months. The House Republicans have received a well-deserved political battering for holding the economy hostage in order to impose their austerity agenda on the American people.
But, we are far from out of the woods. Republican leadership is trying to discredit the idea of raising additional revenue. The threats to cut Social Security, Medicare and Medicaid are still at the top of their agenda. The tax deal passed by Congress on December 31 simply postponed sequestration and across the board cuts.
The fight back strategy is being formulated by a broad national coalition called Americans for Tax Fairness. The basic theme is that any further deficit reduction must come from new revenue. The coalition has targeted raising approximately $1 trillion in revenue to replace across the board spending cuts. Specific revenue proposals include:
- Reducing the value of tax deductions to 28% (instead of 35% for high income taxpayers) which is estimated to raise $400 billion and affect only the richest 2%.
- Closing corporate tax loopholes that encourage U.S. companies to ship profits and jobs overseas. That is estimated to raise up to $200 billion.
- Placing a surtax of 5% on incomes of $5 million or more a year. This is estimated to raise $200 billion.
- Establishing a small tax on Wall Street trading in financial instruments such as stocks, bonds, foreign currencies and derivatives.
Not yet on the agenda of this broad coalition is Scrapping the Cap on Social Security premiums so we all pay at the same rate, 6.1%, and we all receive benefits from our premiums. That change would take the financial solvency of Social Security off the national debating stage for many decades.
There will be many opportunities to participate in activities designed to encourage our entire statewide congressional delegation, Senators and Representatives, to support raising revenue rather than cutting programs critical to seniors, working people, veterans, the poor, children and the vulnerable. Some very rich Americans will have to pay a little more. But the tax deal left many loopholes untouched (and opened up some new ones!). Many very wealthy people will still pay a lower tax rate than the vast majority of working Americans.
PSARA will use our blast email program to let you know what activities are coming up and what you can do to help.