My opinion? Time to get real about revenue and debt

Debra Vogler
·2 min read

Countries and businesses alike need certainty and stability — not fickleness and chaos. Yet that is what we have whenever Congress decides to question the public debt of the United States — something expressly forbidden by the 14th Amendment to the Constitution. The U.S. owes money to members of the Armed Forces, veterans, senior citizens, government workers, companies that do business on behalf of the government, Treasury bondholders, etc. Many companies make long-term plans based on winning government contracts because of legislation that passed Congress in current or past administrations.

The debt ceiling needs to be raised without question per the Constitution, so do it without discussion. Discussions on future spending belong in budget and appropriations negotiations, not in the debit limit bill.

Republicans, including Rep. Ken Calvert, have been saying we need to cut spending back to levels seen in previous years. I say we need sufficient funding to tackle problems occurring in 2023 and beyond. Problems that are left to fester only grow larger with time, an aging demographic and population growth. In their debt ceiling negotiations, Republicans have been trying to cut 47% from the 11% of the non-defense discretionary spending portion of our national budget. The 16 agencies impacted by this targeted approach are all vital to a well-run country, to our national security and to our competitiveness.

Once a clean debt ceiling is passed, budget negotiations should place a greater emphasis on the revenue side of the equation. Some excellent starting points are:

  • eliminate the carried interest loophole;

  • raise the current cap on the level of income at which FICA taxes must be paid;

  • rethink the 2017 tax cut bill (tax cuts that weren’t paid for) that was a gift to the wealthiest people and corporations and added close to $2 trillion to the debt (over 11 years);

  • determine a more fair tax structure on those “crowd and cloud” companies whose business models were made possible by the largesse of American taxpayers whose taxes supported basic R&D over many decades via DARPA, National Labs, etc. (See my 2017 Valley Voice, "Taxpayers should reap gains for ‘funding’ tech research");

  • ensure that private equity companies have to pay the same tax rates as “ordinary” citizens and do not “socialize” their losses or foul-ups when their sketchy business decisions go awry.

This last point should be particularly irksome to any taxpayer who caught The New York Times essay, “Private Equity Is Gutting America — and Getting Away With It," on how a private equity firm led to the downfall of the HCR ManorCare nursing home chain.

Our fiscal problems would be better addressed if we stopped pretending that all tax cuts are good and all spending is bad. Let’s not get a reputation for being a deadbeat — defaulting on our national debt will result in a downgrade in our credit rating and that will be very bad for our economy, taxpayers, investors and citizens.

Debra Vogler of Palm Desert is a journalist/editor/writer who covers the semiconductor manufacturing industry. Email her at debravogler@me.com.

This article originally appeared on Palm Springs Desert Sun: Time to get real about revenue and debt