My Point of View: Will citizens accept the responsibility for debt?
Published 10:00 pm Monday, November 6, 2017
My Point of View, By Joseph E. Brown Sr.
Over the next month, Congress is expected to vote on increasing the $20 trillion federal deficit by $1.5 trillion. They are referring to this as tax reform, or tax cuts. At a minimum, any tax reform should be revenue neutral.
I have paid federal and state taxes for the past 52 years since I was 14 years old. As I get older, I am most concerned about the federal deficit, especially as this will negatively impact my children. Regardless of political party control of Congress, the national deficit continues to grow. At some point we need to not only stop adding to the national deficit but we need to pay for the federal programs that we have received as citizens but have not actually paid for them.
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In the past 30 years, we have entered two wars that were not paid for, experienced two federal tax cuts that resulted in increased deficits and had a bailout for the savings and loans and a bailout for the banks that also were not paid for. The net result is that our national debt is now more than $20 trillion.
One of the proposals to pay for the current tax cut is to eliminate the deduction for state and local taxes from the federal tax liability. Research shows that low tax states currently receive the largest amount of federal revenue per capita. Higher tax states currently receive the smallest amount of federal revenue per capita.
My family relocated to Minnesota in 1993. We chose Minnesota due mainly to the quality of life that it provided to each of us. We were proud of the infrastructure, the quality schools, access to health care and the overall quality of its citizens. Minnesota is not a low tax state. Minnesota is not a high tax state. We are pretty much right in the middle when one considers property taxes, state taxes and federal taxes.
If Congress eliminates the state and local tax deduction from the federal tax liability, Minnesota will be punished for taking care of ourselves. We do not ask for federal funds when we have a blizzard. This will result in double taxation, as we will continue to pay our state and local taxes and pay higher federal income taxes due to a larger amount of our income being taxable.
I wonder if our nation would be better off if we simply eliminated federal income taxes and replaced them with a national sales tax or consumption tax. The current federal income tax code is overly complex and unfair. Too many people and corporations do not pay any income taxes due to multiple deductions. A flat consumption tax could be levied on all expenditures that are considered end of sales. One would only pay the consumption tax once an item or service was purchased. A national consumption tax is easy to collect and is universally fair, as everyone pays the same rate.
Lower income citizens would probably pay a smaller amount of consumption tax, while higher income citizens would probably pay a larger amount of consumption tax based on their level of consumption.
Since a national consumption tax is simple, fair, easy to collect and would not allow any deductions, it will probably never be seriously considered by members of Congress.
So, once again, Congress will pass a so-called tax reform bill that will hurt good states such as Minnesota and will result in winners and losers that will result in an increase in the federal national debt. The complex federal tax code will remain complex and full of tax deductions and loopholes.
A year from now, there will be political finger-pointing as both political parties blame each other for the increased national debt. As citizens, we need to point those fingers at ourselves, for we are the ones who have received the benefits of federal programs that we have been unwilling to pay for. Wars, bank bailouts and tax cuts need to be paid for eventually. Will current citizens accept the responsibility, or will we simply kick the can down the road for future generations?
Joseph E. Brown Sr. is the Senate District 27 DFL chairman.