This editorial will appear in Friday’s print edition.
Railing against taxes is a great American tradition, and Tax Day 2010 was no exception.
But if you listened closely to the tax protests here in Washington and across the country, what you heard was not so much a groundswell of concern over this year’s bill, but the ones coming due.
By and large, Americans are not unhappy about their income tax bill. A poll out this week found that 62 percent of respondents regard the amount they pay as fair.
No wonder: They are, on average, paying less this year than they have in a really long time. A recent analysis by the Urban Institute-Brookings Institution Tax Policy Center found that a median-income family of four will pay 4.6 percent of its income in federal income taxes this year – the second lowest percentage in the last 50 years.
States, despite their desperate grabs for cash to balance their budgets last year, did not gobble up much of the savings. The $173 billion federal tax cut enacted in 2009 was six times larger than the sum of tax hikes states passed.
Taxpayers’ good fortune can’t continue. As the head of the Congressional Budget Office warned this month, the nation’s fiscal path is unsustainable.
The CBO has projected that if President Barack Obama’s proposed budget became law, public debt would grow from its 2009 level of $7.5 trillion to $20.3 trillion by the end of 2020. The country as not seen that much debt, as measured against its gross domestic product, since the close of World War II.
CBO chief Doug Elmendorf told a gathering of reporters that the problem “cannot be solved through minor tinkering.” The country is due for reckoning, and it’s likely to arrive in two forms: higher taxes and tough cuts to entitlement spending.
Congress will have to do more than resist pressure to cave on cost-control measures in the new health care regime. It will have to tackle not just the Medicaid and Medicare money pits, but also a Social Security system that is facing insolvency.
Lawmakers must summon the will to ask more of taxpayers too. The gap between spending and revenue has simply grown too large to allow a one-sided solution.
Pointing fingers won’t get the nation anywhere. Both political parties have had a hand in driving up the debt, and both parties should have a hand in the solution. Obama’s bipartisan federal deficit commission is a good step, but it can’t mandate wiser fiscal policy.
Only voters who recognize that changing our ways will be painful and yet still demand the country stop spending beyond its means can force the issue. The sooner we begin, the less painful it will be.