Budgets are all about choosing priorities. And here’s one choice: chained CPI? Or eliminate the tax break for investment income?
When I looked at the numbers this morning, I was stunned.
Chained CPI is a way of recalculating – and permanently lowering – everyone’s Social Security benefits. It has been a top Republican priority for years. The White House Budget Director estimates that changing to chained CPI would save the federal government $150 billion over the next decade.
And how much does the federal government spend on tax breaks on investment income? According to Congress’ Joint Committee on Taxation, tax breaks on investment income will cost $161 billion this fiscal year alone.
Go back and read that again.
Tax breaks on investment income cost the federal government more – in just one year – than chained CPI would save over an entire decade.
Budgets are all about choices. For many American families, the choices are between food and heat, medicine or mortgage? For Congress, as it debates this budget, the choices are about who pays – and who benefits.
I’m still stunned. One year of treating investment income as if it was wage income would pay for ten years of the Republicans’ proposed cuts to Social Security benefits.
I’m still at a loss for words. It is morally wrong, that this choice is even being considered.
Tax Credits or Spending? Labels, but in Congress, Fighting Words
The New York Times has a story about Washington lobbyists’ effectiveness in convincing Congress to pass tax breaks that benefit the wealthy.
Just one of those tax breaks – capital gains and dividends – costs an estimated $161 billion a year. That would pay not just for the Sequester cuts, but also for all the additional cuts that House Budget Committee Chairman Paul Ryan wants to make in next year’s federal budget.
No surprise, the top 1% get 75% of the benefit of that particular tax break. (The bottom 60% of taxpayers get only 1% of the benefit.)
Another way to look at it? The amount the 1% gets from the unearned income tax break – just in a single year – would pay for 10 years of Paul Ryan’s cuts to Medicare.
Read the story here. Dig into the graphic here.
If you haven’t already, read Sunday’s post about corporate tax breaks.
Wondering why you should take the time to learn about this? The next few budget battles are going to come down to questions of revenue versus cuts, and corporate welfare versus Social Security and Medicare. Basically, it’s going to be a question of whose interests our government will serve: the people who can afford to hire lobbyists? Or the very tired and distracted middle class?
The House GOP is still marching to the same drummer they have been following since 2001. Nothing much is going to change in Washington, unless we the people work to change it.