The solution to the debt problem can be found in the
redefining of the word, entitlement.
From 1953 through today, I paid into the Social Security system. From 1972 to 2002 I was self-employed and
paid both the employer and employee share of FICA tax. Am I not entitled to receive benefits that
result from those payments? The same
can be said for payments into the Medicare fund. Today, opponents of those two programs will claim that I will
actually receive more in benefits than I actually pay in. What they fail to mention is that is true
for virtually every form of insurance.
If your house burns, you will receive far more in insurance
reimbursement than you pay in premiums.
The same is true if you file a claim for car insurance, health
insurance, or die and have your heirs receive your life insurance
benefits. As much as those in
opposition to Social Security and Medicare argue that these programs are
financially unsound they are no different from any other form of insurance and
the only need is to balance the cost of premiums plus the growth of the
investment of undistributed premiums with the costs of anticipated
benefits. However, there is another
form of entitlement that is the real problem facing our country. This is a form of entitlement that is not
paid for by the recipients (unless one considers campaign contributions
payments for entitlements). The amount
of money that will be spent on tax deductions, exclusions, and loopholes will
almost equal the amounts collected in income taxes. Below is the estimate of
tax “expenditures” for 2011 and 2012:
|
TOTAL ESTIMATES OF
TOTAL INCOME TAX EXPENDITURES FOR FISCAL YEARS 2011-2012
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|
|
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(in millions of dollars)
|
|
|
|
|
|
2011
|
2012
|
|
National Defense
|
|
|
$13,250
|
$14,270
|
|
International affairs:
|
|
|
$57,320
|
$54,410
|
|
General science,
space, and technology:
|
|
|
$9,560
|
$9,480
|
|
Energy:
|
|
|
$12,430
|
$9,050
|
|
Natural resources and
environment:
|
|
|
$2,020
|
$2,130
|
|
Agriculture:
|
|
|
$1,020
|
$1,300
|
|
Commerce and housing:
|
|
|
$403,640
|
$425,360
|
|
Transportation:
|
|
|
$4,050
|
$4,130
|
|
Community and regional
development:
|
|
|
$3,080
|
$2,910
|
|
Education, training,
employment, and social services:
|
|
|
$131,478
|
$107,840
|
|
Health:
|
|
|
$163,040
|
$170,650
|
|
Income security:
|
|
|
$134,662
|
$154,358
|
|
Social Security:
|
|
|
$37,760
|
$38,470
|
|
Veterans benefits and
services:
|
|
|
$6,260
|
$7,220
|
|
General purpose fiscal
assistance:
|
|
|
$67,250
|
$62,260
|
|
Interest:
|
|
|
$1,190
|
$1,200
|
|
Addendum: Aid to State and local governments:
|
|
|
$99,770
|
$88,700
|
|
TOTAL LOSS FROM TAX
DEDUCTIONS AND LOOPHOLES
|
|
$1,147,780
|
$1,153,738
|
|
|
|
|
|
|
|
|
ESTIMATES OF REVENUE
|
|
|
|
|
|
Income taxes
|
|
|
$1,600,000
|
$1,800,000
|
|
Social Insurance Tax
|
|
|
$1,000,000
|
$1,000,000
|
|
Ad-Valorem Tax
|
|
|
$1,100,000
|
$1,100,000
|
|
Fees and Charges
|
|
|
$400,000
|
$400,000
|
|
Business and Other
Revenue
|
|
|
$700,000
|
$700,000
|
|
TOTAL ESTIMATES OF
REVENUE
|
|
|
$4,800,000
|
$5,000,000
|
|
|
|
|
|
|
|
TAX LOSS AS PERCENTAGE
OF REVENUE
|
|
|
23.91%
|
23.07%
|
|
TAX LOSS AS PERCENTAGE
OF INCOME TAX RECEIPTS
|
|
71.74%
|
64.10%
|
|
The fastest way to raise revenue is to repeal all of the
above-mentioned “tax expenditures”, allow the Bush tax cuts to expire on the
top two tax brackets, and require that any future tax deductions, exclusions,
or exceptions be offset by tax increases.
For too long a time the wrong people have been on the receiving end of
entitlements and the cost has been a loss of the middle class to show for it.
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