Raise the Debt Ceiling

It's all up to Boehner and Obama. The right answer is in the middle: a lot of spending cuts and a few "tax increases." In other words everyone will have to accept some burdens he will not especially like.

Obama mus appease the far left by getting as many "tax increases" as he can, and Boehner must appease the tea party by getting as few "tax increases" as he can. On spending cuts, their commitments to the extremes force them in the opposite direction. When the compromise is finally achieved, both men will get a lot of criticism from the extremes.

The debt ceiling increase is being held hostage to both issues because it requires a commitment to reduce the debt, and the way to do that is to decrease the annual deficit so that we pay down the debt faster than we borrow.

I put "tax increases" in quotation marks because neither closing some loopholes for large corporations and extremely wealthy individuals nor eliminating federal subsidies for oil companies with multi-billion dollar profits constitutes a tax increase.

To appease the extremists, Boehner and Obama are going to play hardball right up to the last second. That is pretty scary for all of us in the mushy middle.

Taxes, Taxes, Taxes

The Democrats tell me, "Tax the rich people."

The Republicans tell me, "No new taxes."

It would seem there is no middle ground, no compromise. But I believe that there is a middle ground. I just look at the facts and "loosen" the definition of 'new taxes.'

First, some facts, quoted from Bruce Bartlett at NYTimes.com:

• 46 per cent of tax filers pay no federal income taxes.
• 78,000 households with incomes of $211,000 to $533,000 will pay no income taxes this year.
• 24,000 filers with incomes of $533,000 to $2.2 million will also pay zero.
• 3,000 filers with incomes of over $2.2 million will also pay zero.
• Many households with incomes under the median income could, by foregoing some luxuries, afford to pay a small tax.
• Finally, I read elsewhere that 67% of American Corporations pay no federal taxes--I am sure that not all of those are without profit of some kind.

Let's make it clear: I do not feel the need to extract tax from a household that does not make, or barely makes, sufficient income to house and feed themselves and transport themselves to work. Likewise, I do not believe that a business that lost money, or did not make a net profit before taxes, should be forced to pay. But the folks who are paying their taxes are paying as much as 25%, or more, of their income, and so probably should most of those 105,000 filers who plan to pay none.
I said I want to 'loosen' a definition. By that I mean I do not accept the position of some conservatives that the elimination of an existing tax credit, loophole, or federal subsidy constitutes a new tax. We should be able to eliminate loopholes. A company that makes a multi-million dollar profit after taxes does not need loopholes, tax credits or subsidies to stay in business.
So, as I see it, the middle ground is to close as many as possible loopholes in the code, and eliminate tax credits and federal subsides for businesses that can make a profit without them.
There are 105,00 households and many corporations out there that need to step up and pay their fair share of the federal taxes that are already part of the law. It probably is not enough to balance the budget, but it would help significantly. Our legislative and executive branches of government need to look at it this way, and act accordingly.