Tax breaks for millionaires and billionaires

As a possible US debt crisis looms, Democrats and Republicans seem to be talking past each other - lobbing rhetorical fireworks, particularly over what President Obama calls "tax breaks for millionaires and billionaires."

Eliminating unfair tax breaks for the wealthy versus raising taxes in a way that’s damaging to economic recovery.

When it comes to defining the terms of federal budgeting and deficit reduction, it’s almost as if Democrats and Republicans are speaking different languages or using different mathematical models. And in their regular Saturday radio addresses, that pattern continued.

President Obama repeated his recent mantra:

“Nothing can be off limits, including spending in the tax code, particularly the loopholes that benefit very few individuals and corporations,” Obama said.

“Now, it would be nice if we could keep every tax break, but we can’t afford them,” he continued. “Because if we choose to keep those tax breaks for millionaires and billionaires, or for hedge fund managers and corporate jet owners, or for oil and gas companies pulling in huge profits without our help - then we’ll have to make even deeper cuts somewhere else. We’ve got to say to a student, ‘You don’t get a college scholarship.’ We have to say to a medical researcher, ‘You can’t do that cancer research.’ We might have to tell seniors, ‘You have to pay more for Medicare.’”

Speaking for the Republican side, and without addressing the presidential scolding regarding “millionaires and billionaires” that began at Obama’s press conference this week, Sen. Dan Coats of Indiana said, “Unfortunately, the President’s economic plan of spending and borrowing has failed.”

“It’s time to acknowledge that more government and higher taxes is not the answer to our problem,” Coats said.

As a model for government efficiency and economic recovery, Coats cites the work of Indiana’s Governor Mitch Daniels, who faced a $200 million deficit when he took office.

“While other states increased spending and raised taxes, Indiana reduced spending, cut taxes and paid down its debts,” Coats said. “The spend less, borrow less and tax less model in Indiana has resulted in balanced budgets, job creation, and a triple-A credit rating. In contrast, the spend more, borrow more and tax more approach of the President has resulted in fewer jobs, higher debt and a threatened downgrade from credit agencies.”

Obama calls his approach to deficit reduction - which includes raising taxes for some corporations and wealthy individuals - “balanced.” For Republicans in the House and Senate, “balance” means amending the US Constitution to require a balanced budget, which is the way things operate in most states. And any increases in taxes, even for hedge fund managers, corporate jets, and oil companies making record profits? Forget it.

With an eye to the August 2 deadline looming over a possible debt crisis, the Senate has canceled its July 4 break and will be back at work next Tuesday. Meanwhile, the rhetorical fireworks continue.

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