The Incredible Disappearing Budget Surplus
You might have forgotten, but it wasn't so long ago that we had a growing federal budget surplus.
In January 2001 (back in the good old days when there were only 40 million of us without health insurance), the Congressional Budget Office predicted a budget surplus of $5.6 trillion over the next ten years. Instead, we are now looking at deficits approaching $3 trillion over the same period. For those of you who are visual learners, we made a cool chart showing the change from a growing surplus to a growing deficit.
What happened? Mostly, we traded our surplus for tax cuts for the really rich.
According to Citizens for Tax Justice, last year the richest 1% (with an average income of $938,000) got an average tax cut of $59,300. In contrast, the poorest 20% (with an average income of $9,800) got an average tax cut of $91.
In the meantime, 5 million more people go without health insurance while the feds cut Medicaid. In Maryland there are 19,000 kids on waiting lists to get child care help while the feds consider cuts to child care. And in response to the explosion in housing costs, we are poised to make big cuts in housing assistance.
Do these choices reflect your values and priorities?
In January 2001 (back in the good old days when there were only 40 million of us without health insurance), the Congressional Budget Office predicted a budget surplus of $5.6 trillion over the next ten years. Instead, we are now looking at deficits approaching $3 trillion over the same period. For those of you who are visual learners, we made a cool chart showing the change from a growing surplus to a growing deficit.
What happened? Mostly, we traded our surplus for tax cuts for the really rich.
According to Citizens for Tax Justice, last year the richest 1% (with an average income of $938,000) got an average tax cut of $59,300. In contrast, the poorest 20% (with an average income of $9,800) got an average tax cut of $91.
In the meantime, 5 million more people go without health insurance while the feds cut Medicaid. In Maryland there are 19,000 kids on waiting lists to get child care help while the feds consider cuts to child care. And in response to the explosion in housing costs, we are poised to make big cuts in housing assistance.
Do these choices reflect your values and priorities?
5 Comments:
Government needs to realize that one entity in society affects another. Removing children from Medicaid eliminates the immediate financial strain, but in the long run, this will have a drastic latent effect on those children, their families and communities. How good is an employee or business owner who is the parent of a sick child. Stress levles affect job attendance, performance as well as retention. The revolving clye of poverty will continue. Why not give all children medical insurance funded by the government, regardless of family income!
By jw, at 3:26 PM
While taxes on the rich continue to go down – taxes on the middle class will go up thanks to the Alternative Minimum Tax (AMT). The AMT was originally meant for the wealthy to keep them from overusing deductions and not paying any income taxes.
The AMT or Bush’s Middle Class Tax Hike, operates as a second income tax system with its own set of rules, a lower rate, and virtually no deductions. Before the Bush tax cuts, few taxpayers were affected by it, but because the tax cuts reduced tax rates and increased AMT liability, the number of taxpayers required to pay the AMT will explode in the next few years according to the Brookings Institution.
By 2008, the regressive AMT will bring in more tax revenues than the regular federal income tax. By 2010, 33 million taxpayers will have to pay the AMT. But Bush refuses to fix the problem of his own making, because the AMT makes deficits appear smaller and allows him to pass more tax cuts for the wealthy.
By Denise Riley, at 6:00 PM
This budget policy seems completely irresponsible and represents the continued "fleecing of America", particularly the middle class. Many middle-class families are buckling under the weight of high taxes (payroll and property), high credit card debt, and rising costs of education. There is often much fuss made (self included) about the plight of the poor, but what about the middle class?
By josie_m, at 10:39 AM
I think it's also worth noting that in a time of huge budget shortfalls, the House of Representatives has recently voted to repeal the federal Estate Tax.
This is a tax which only impacts the wealthiest of the wealthy.
The Fair Taxes for All Coalition notes that not only is repeal of the Estate Tax unfair, but
in 2013 alone, repeal of the estate tax would result in $64 billion in lost revenues.
Couldn't/shouldn't that money be spent to make sure that Medicaid, Headstart, and veterans programs are better funded??
By Kelly, at 12:47 PM
JW, I agree completely. What is going to happen is that we, the physicians, are going to be expected to see children for free. We're going to have to scrounge the pharmaceutical companies for free samples for drugs. I don't think people will take it for too long. Maybe a big realignment in the Congressional elections in 2006 will send a wake up call to politicians.
By Dr. C, at 5:36 PM
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