This morning’s Week in Review had a fascinating section on all of the options on how to fix the deficit. It puts you in charge of the budget, allowing you to mark off all of the ways you would save in order to cut the budget by $1.355 trillion by 2030. If you went to the page online, there was an interactive version.
I instantly thought that this was a great opportunity for me to put my money where my mouth is. You can see my detailed plan at http://t.co/YBebbxQ.
Overall, my plan represented 67% tax increases and 33% budget cuts – can you guess I’m a liberal? Yes, I believe in most of the government’s programs, and I am willing to pay higher taxes for them.
Getting to around $1 trillion was pretty easy:
- Eliminate Earmarks ($14b) – get rid of projects that favor a specific lawmakers’ home states
- Reduce nuclear arsenal and space spending ($38 billion) – the future of warfare is less and less likely to be nuclear
- Reduce navy and air force fleets ($24 billion) – build fewer ships and retire more than were scheduled
- Enact medical malpractice reform ($13 billion) – so much of medical spending is based on trying to avoid getting sued
- Increase the medicare eligibility to age 68 ($56 billion) – We are living longer and healthier
- Reduce social security benefits for those with high incomes ($54 billion) – Higher income people can afford it and are saving anyways
- Use an alternate measure for inflation ($82 billion) – use an updated method of measuring inflation
- Fix estate tax rate at $3.5 million ($45 billion) – That’s still a lot of money to share amongst the kids, tax free
- Raise capital gains rates to 20% ($24 billion) – still much less than income tax rates, and this is an investment vehicle for the wealthy
- Expire bush tax cuts for > $250,000 ($115 billion) – that’s easy, they can afford it, and it certainly hasn’t boosted the economy while it has been in place
- Payroll tax applies over $106,000 ($100 billion) – it’s nice when the extra savings kick in at the end of the year, but it’s a nice bonus. My budgeting is based on the normal payroll taxes
- Eliminate loopholes, but keep taxes slightly higher ($315 billion) – tax rates would still go down, and the loopholes would still go away
- Reduce mortgage-interest deduction by converting to credit ($54 billion) – I benefit from this, but when it comes down to it, it’s not why I own my house. Cutting the deficit was more important.
- Bank tax ($103 billion) – they got us into the financial crisis. They are going to have to help get us out.
Getting the last $355 billion was tougher. It came from two options:
- Raise social security retirement age to 70 ($247 billion) – this is going to sting for many people, but the reality is that we are all living a lot longer and a lot healthier. We need to contribute more to social security to compensate.
- Millionaire’s tax on income above $1 million ($95 billion) – 5.4% on income over $1 million dollars; the millionaires can do more
I left most of the military spending intact. I paired it down for programs that were geared toward global warfare, but we need the troops in Afghanistan and Iraq to protect our security interests And, cutting payrolls and contractors is putting people out of work.
I’m hoping that the New York Times will do more with the data it is collecting. I’d love to see aggregate data about how popular each cut was, and perhaps a breakdown of who cut what by region.
What a great crowdsourcing approach to the deficit.
If only it were so easy to actually get it done.