[Vision2020] Crapo wrong on Obama taxes, deficits

[Tom Hansen]

Courtesy of the Opinion section of today's (July 24, 2014) Moscow-Pullman Daily News.

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His View: Crapo wrong on Obama taxes, deficits
By Nick Gier
In a poorly written column (His View, July 9) Idaho U.S. Sen. Mike Crapo claimed that “federal taxes are at an all-time high due in large part to increased taxes.”
One can excuse the TEA (Taxed Enough Already) party for their ignorance, but only political posturing can explain Crapo’s error. The record tax receipts are largely due to a better economy, plus the fact that the very wealthy, recovering easily from the Great Recession by 2010, are getting the IRS bills they deserve.
According to the Congressional Budget Office, the effective tax rates from 2008 to 2010 averaged 17.8 percent, the lowest since World War II. At an average 28.8 percent even the very wealthy are paying taxes at historic low rates. None of us should be surprised that corporations are paying a very low rate of 1.8 percent.
Crapo mentions the bill that passed in January 2013 to avoid the “fiscal cliff,” which raised top tax rates to 39.6 percent. It obviously hits those who can afford it, not the middle class as Crapo states. The bill left the Bush tax cuts for 98 percent of Americans in place.
Crapo neglects to mention that both he and U.S. Sen. Jim Risch of Idaho voted for this tax hike on the rich. I’m sure that former President Reagan is one of their heroes, but the Gipper raised taxes every year except one, and the average tax rate was 21 percent during his two terms.
Not surprising, Crapo is also misleading on the revenue effects of the Affordable Care Act. It is predicted to cost $1.383 trillion from 2015-24. (Crapo got the dates wrong.) This is $104 billion less than the CBO first predicted.
The CBO estimates that for 2014 the ACA will cost $36 billion, $5 billion less than previously calculated. These costs will be offset by higher premiums for the wealthy, Medicare savings (not cuts) and other adjustments. The CBO director has recently reaffirmed his earlier prediction that the ACA will not add to the deficit.
Sen. Crapo is just as misleading on budget deficits as he is on taxes. Crapo objects to the current deficit of $436 billion, down dramatically from $1.546 trillion in the midst of the Great Recession. Obama has brought the annual deficit down from a high of 13.7 percent in April of 2009 to 2.8 percent this month.
The total national debt of $17.5 trillion is huge and troublesome, but historically Republicans have contributed more to this burden than Democrats. Carter-Clinton-Obama ran up the national debt by 142 percent, but Reagan and the two Bushes increased it by 334 percent. (See www.NickGier.com/DebtGOPObamaTables.pdf)
Some might say that the dollar amount of the deficit is more telling than percentage increase. This works only for Reagan, who added about $1 trillion dollars for a largely unnecessary cold war; and 43 for Bush, who initiated most of $1.57 trillion for the disastrous wars in Afghanistan and Iraq. A large portion of the deficit under Obama is due to the reduction of revenue, on the basis of an economy many times larger than the 1980s, from the Great Recession.
Using CBO data, the Center for Budget and Policy Priorities has calculated the long-term effects of various elements of the national debt, assuming the Bush tax cuts are still in place. By 2019 those cuts will amount to $600 billion of the debt burden as opposed to $75 billion for Obama’s programs. We will still be paying $320 billion for the Great Recession (due to lost revenue) and $150 billion for the wars in Iraq and Afghanistan.
Reagan and the Bushes borrowed money at high interest rates to wage a cold war and two hot wars. Obama borrowed at near zero interest and saved the economy. Who will history treat the kindest?
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Seeya 'round town, Moscow, because . . .

"Moscow Cares"
http://www.MoscowCares.com
  
Tom Hansen
Moscow, Idaho
 
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