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If not now, when?

April 12, 2012

Reagan was a little more practical than many in republican leadership today.

Here’s a quick history quiz for you. According to former Republican Senator Alan Simpson of Wyoming, what president raised taxes 11 times while in the office?

You may be surprised to learn the correct answer is Ronald Reagan.

Reagan has become a hero of the Republican Party for his successful presidency. To be fair, he did enact massive tax cuts at the start of his presidency, but when federal revenue failed to increase as much as his administration thought it would, taxes were raised to keep the federal deficit from going completely out of control.

In the 1988 presidential election, George Bush was famous for the quote, “Read my lips: no new taxes.” In 1990, the first president Bush reached a compromise with Congress to raise taxes to help with the federal deficit. Doing this ended up hurting his chances for reelection in 1992 against Bill Clinton.

President Clinton raised taxes during his presidency as well, and along with a Republican-controlled Congress, the former president compromised to limit federal spending. Although each party argues they were the ones who made it happen, this combination helped give us our last federal budget surplus in the 1990s.

With our massive federal deficit now, it is difficult to even bring the idea of a tax increase to the table. Most non-partisan groups that analyze the issue point out there will need to be a combination of major cuts and tax increases.

Could we balance the budget without tax increases? Grover Norquist, who is in charge of the organization Americans for Tax Reforms, believes so. He has gotten most of the Republicans in Congress to sign a no-new taxes pledge. Norquist said his ultimate goal is to trim the size of the federal government in half.

True, this would balance our federal budget. But that means every federal government program would be cut in half — every Social Security check, Medicaid and Medicare benefits, and our military, to name a few.

Most bi-partisan and non-partisan groups believe in a combination of tax increases and spending reductions. The Simpson-Bowles bi-partisan budget commission recommended increasing tax revenue by about $100 billion with a new gasoline tax and the elimination of many tax deductions.

The Peter G. Peterson Foundation believes we need to look at a variety of options. Among them are to allow some of the Bush tax cuts to expire, eliminate some tax credits and deductions, create new consumption taxes, simplify the individual and corporate tax system, and encourage better compliance with the current tax laws.

I can see how raising taxes on the wealthy a little would benefit our country greatly. My family and I attended a weekend of pre- and post-wedding celebrations that, along with the big event itself, likely cost close to six figures in all.

My wife, Kerri, and I were blown away when we arrived at the Sunday brunch at the bride’s parents’ home and learned valet service was provided. We would have been just as happy parking our 2004 Ford Focus and making the short jaunt to the sprawling estate.

As I sat eating my gourmet catered brunch, listening to live music, looking at the multimillion dollar home with not one, but two, Bentleys parked out front, I thought, “I think this family could afford to pay $0.39 on every dollar they earned more than $250,000 instead of the $0.35 they currently do.” Not that I want to punish them or anyone else in this country for being successful, but we are all going to be punished even more — including those who can barely afford to make ends meet — if we don’t start to reign in our national deficit.

With all these options, I would think we could at least debate the idea of increasing revenue, but that appears to not be the case.

Last week, the House of Representatives approved a budget that would lower income tax rates. First, it would cut spending by the federal government drastically. Second, it would lower income tax brackets to two rates, 10 percent and 25 percent. Currently, there are six income tax rates for 10 to 35 percent.

At first glance, it appears this budget would help reduce the federal deficit, but the details are lacking. Most bi-partisan or non-partisan groups believe the new budget would mean no difference in taxes for those who earn $20,000 to $30,000 a year, but would reduce the income tax for those who earn a million dollars a year by around $250,000. I guess we could make room in the front drive for another Bentley.

Meanwhile, a bi-partisan budget based on a lot of the recommendations from the Simpson-Bowles commission gained a total of 38 votes in the House of Representatives … out of 435 voters. Democrats were afraid of cuts to entitlement programs, while many Republicans couldn’t support any new taxes.

Representative Steve LaTourette (R-Ohio) was one of the sponsors and he asked his colleagues a question I’m afraid many of us will soon be asking: “If not now, when?”

The longer we wait for common sense reform, the more difficult it will be.

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