US Budget: Tax breaks vs. Budget Cuts

i often try to avoid getting involved in political discussions, despite being very interested in politics. however, i've been quite impassioned by the recent efforts to balance the widening deficit in the US. i don't, pretend to be an economist—i hated economics class in high school, but even an uneducated person can't help be scratch their head at the obvious correlation between these numbers below.

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Quoted from: http://www.americanprogress.org/

The chart below compares the 10 safety-net programs slated for deep cuts with the cost of the tax breaks that should also be considered for reduction or elimination to bring the budget into balance. The column on the left is a list of safety-net programs that have already been targets of the House leadership’s budget ax. The column on the right is the cost to specified tax breaks (see bottom of page for sources).

Most Americans would be surprised to learn that tax breaks are not on the table during any budget negotiations. In fact, Congress has the Congressional Budget Office prepare an official spending estimate for the cost of all programs or their expansions. Meanwhile, Congress enacts and continues tax breaks without any requirement that the cost of tax breaks be calculated and shared with members before a vote.

That’s why, over the last 16 years, the cost to the Treasury of the mortgage interest tax deduction, for example, doubled from $48 billion in 1995 to nearly $100 billion this year and no one made a peep about getting control of this loss in revenue. The stunning growth in this tax break is unchecked and unquestioned.
This tax break is also increasingly benefiting individuals who don’t need any federal incentives to purchase a home. In 2011 the mortgage interest deduction will help families who purchase a vacation home avoid taxes to the tune of $800 million. Meanwhile, the House Budget Committee chairman’s 2011 budget bill included $730 million in cuts to housing programs for the elderly and disabled.

There are many other examples where the cost of tax breaks are skyrocketing and disproportionately benefiting companies and people who don’t need them (see chart above):

• Congress should rein in the $4.6 billion in tax breaks given to companies who move jobs offshore instead of making cuts to the $4 billion in job-training programs.
• Oil companies get more than $2 billion in tax write-offs for drilling expenses yet Congress is considering cutting the Low Income Home Energy Assistance Program, the $2 billion federal program that helps poor families pay their winter heating bills.
• Large biofuels companies, such as Archer Daniels Midland, benefit from the ethanol tax break that now costs nearly $5 billion a year. And oil companies such as ExxonMobil benefit from more than $9 billion in tax breaks for oil exploration.

You can read the rest of the article at: http://www.americanprogress.org/issues/2011/02/tax_breaks_infographic.html

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it just infuriates me that we continue to take from the poor to give to the rich. i understand the motivation that some businessmen and women have sacrificed and worked hard to get to the top, and be where they are, but the greater majority of business owners that benefit from these tax breaks are not those types of people. the people benefiting most from these tax breaks are the very people who put us into this situation in the first place. the very people who profited hand-over-fist from the housing bubble burst, the economic bail-outs, and economic collapse are the very people continuing to get wealthy while the rest of the country crumbles.

i'm amazed that people don't see how symbiotic the relationship is between companies and consumers. if the rich keep getting richer, and corporations keep hoarding money, where do they think the consumer is going to get any money to buy their stuff? if the poor can't afford to purchase anything, how will the companies continue to operate? if consumer purchasing declines, the demand for products declines, further layoffs happen, which create more poor, and more unconsumers. Eventually, no commerce is happening, and suddenly the cash these companies so covet is useless. meanwhile, hundreds of thousands of people are out of work, trying to survive, and their government is crippled, bankrupt, and unable to help get their citizen back on their feet. cutting the assistance programs for the poor does not help the government, nor does it stimulate activity in the economy. removing, cutting, dissolving these programs does nothing more than further incapacitate the working class, making them more dependent on their low-to-no income thus stopping their ability to be a consumer at all. when there is less cash in the hands of the consumer class, there is less economic growth, despite a government that can boast about being further out of debt.

i don't think the democrats have it right, and i sure as hell don't think the republics have it right. what i do think is that we've got a bunch of morons sitting on their high-seats of power making fucking stupid choices at the expense and detriment of their constituents. while they may be able to show on paper that our government has saved a little money, the economy will collapse around them, their citizen will perish by the thousands from starvation, illness, cold, and crime, but at least 1% of the population will be spared and their yachts, mansions, and plush lifestyles will look nice and shiny.

if america stays on its current path we'll make the slums of India and China look like Beverly Hills.

i've joked about it before, but perhaps now is the time to apply for citizenship and employment outside this dying land.