Start with tax breaks for
the wealthy
By Robert Reich
By Robert Reich
To
watch this video on YouTube: https://www.youtube.com/watch?v=LXaXZmrDvWA
Donald
Trump wants to slash Medicaid, Social Security disability, and food stamps in
order to expand the military and give the rich and corporations big tax
cuts.
There’s
a far better way to help balance the federal budget – cap tax
expenditures.
The
federal government is diverting hundreds of billions of tax dollars every year
to help the wealthiest Americans become even wealthier through tax expenditures
that are the equivalent of government handouts – allowing the wealthy to deduct
or exclude from their taxable incomes large amounts of employer-provided health
care, retirement savings, and mortgage interest.
These
tax expenditures demand reform for three big reasons:
1. First, they are unfair.
Middle and low-income workers don’t get from their employers nearly as much health insurance and retirement income as do corporate executives. Many get none at all. And their mortgages– if they have any– are usually much smaller, because they live in homes that don’t cost as much.
2. Second. these
deductions and exclusions are nonsensical.
Originally, they were put into the tax code to give people financial incentives to get health insurance, to save for retirement, and to buy a home. But the rich don’t need financial incentives to do these things because they’re … rich.
Originally, they were put into the tax code to give people financial incentives to get health insurance, to save for retirement, and to buy a home. But the rich don’t need financial incentives to do these things because they’re … rich.
3. Finally these
deductions and exclusions are hugely expensive.
They cost hundreds of billions of dollars a year– $348 billion in 2015 alone– the lion’s share going to high income families.
They cost hundreds of billions of dollars a year– $348 billion in 2015 alone– the lion’s share going to high income families.
Instead
of wasting these billions on making the wealthy even wealthier, we should be
using these resources to provide better healthcare, retirement security and
affordable housing to low and middle-income households, including households of
color, who are currently losing out.
There’s
no reason why America’s wealthy should be able to deduct or exclude from their
taxable incomes more than, say, $25,000 a year for employer-provided health
care, retirement, and mortgage interest.
Limiting
those deductions and exclusions would be rational, fiscally responsible, and
fair. Unlike Trump and Republican budgets that want to slash Medicaid, Social
Security disability, and food stamps.
ROBERT
B. REICH is Chancellor's Professor of Public Policy at the University of
California at Berkeley and Senior Fellow at the Blum Center for Developing
Economies. He served as Secretary of Labor in the Clinton administration, for which
Time Magazine named him one of the ten most effective cabinet secretaries of
the twentieth century. He has written fourteen books, including the best
sellers "Aftershock", "The Work of Nations,"
and"Beyond Outrage," and, his most recent, "Saving Capitalism."
He is also a founding editor of the American Prospect magazine, chairman of
Common Cause, a member of the American Academy of Arts and Sciences, and
co-creator of the award-winning documentary, INEQUALITY FOR ALL.