Sunday, December 23, 2012

Why Pretend -- Let the Tax Cuts Expire

If there is no appetite for reforming entitlements, then our future is massive tax increases and a stagnant and depressed economy.  Why not start this process now?  The track that we are on will eventually lead to the kind of top tax rates that we see in Europe -- 70 percent in France, for example.  And even those rates won't improve the national debt situation.

The truth is that the Democrats plan is to continue to raise tax rates by pretending that somehow tax revenues can catch up with entitlement spending.  But there are no tax rates or revenues that can match the entitlement explosion.  Our national debt will be a multiple of GDP within a few years and is probably already unpayable at any level of tax revenues.

It's time to let the public get a taste of their future -- high taxes, massive bureaucracy, a crushing of the private sector, high and permanent unemployment, and diminished employment and income prospects for younger generations.  Within a dozen years, we will begin to back away from spending for the elderly -- not because we want to -- but because there is simply no money available to maintain these programs at existing benefit levels.

The problem we have is that a majority of Americans think all of this stuff is affordable.  That's why entitlement reform is "off the table."

So, let taxes rise.  Among Democrats, only Harold Dean seems to be aware of the arithmetic.  He has made it clear that he supports letting all of the tax cuts expire.  It's rare that I agree with Dean, but, on this one, I agree.

The public needs to get a taste of the future regime that they have voted for.  If the entitlements are "off the table," then lets put the reality of the future on the table now before it is too late.  Perhaps four years of economic stagnation, smothering regulations and high taxes will be enough of a taste of our future to bring our citizenry to its senses.

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