A western approach to deficit reduction
Up here in the Rockies, we have our own perspective on the budget debate in Washington. It’s shaped by our keen awareness of the beauties and dangers of nature; our relationship with a federal government that owns much of the land around us; and our straightforward, Western approach to shared responsibilities and fair dealing.
For example, the so-called “sequester”—the across-the-board cut to federal spending that can seem so abstract in the nation’s capital—raises a very real threat here in rural Colorado: forest fires. Our mountain counties are covered in trees, unfortunately including many of the 3.4 million acres of dead trees statewide killed off by beetle infestations and therefore prime fuel for forest infernos. The sequester reduces funding for clearing deadwood (as well as for forest fire preparedness, prevention, and training), putting us at greater risk of more destructive blazes like last year’s deadly Waldo Canyon and Lower North Fork fires.
The national government is our constant neighbor: huge chunks of each of our counties is federal land. We can’t tax that land, so the federal government compensates us with what’s known as PILT (payments in lieu of taxes). The sequester has cut PILT funding, too, squeezing local spending on everything from roads to schools.
The sequester is bad policy because it’s a product of a bad process: a crazy plan to scare both sides in the budget debate back to the bargaining table that only succeeded in damaging important public investments (along with whatever’s left of Congress’s reputation). That’s not the kind of deal a Westerner would sign onto.
Instead, we try to take a reasoned, balanced approach to problem solving. If the goal is deficit reduction, the sensible plan would be to reduce spending we don’t need while increasing tax revenue, without in either case putting undue burdens on those least able to bear them. The sequester is only the latest in a series of big budget cuts Congress and the President have agreed to over the past two years. Meanwhile, there’s been relatively little attention given to the other side of the equation: tax revenue.
We need revenue not only to pay down public debt, but to maintain important public services. Dan is a certified wildland firefighter on call to fight forest fires anywhere around the country, serving up to two weeks on the line once activated. Such nationwide coordination of firefighting efforts takes nationwide resources.
We also need government to act in strategic partnership with private industry to foster economic growth. Tim is co-director of the Bull Moose Sportsmen’s Alliance, which (along with supporting the 2nd Amendment rights of sportsmen) promotes wildlife conservation. Such conservation efforts, undertaken in large part by the federal government, not only ensure recreational opportunities for hunters and anglers, but are crucial to a wildlife recreation economy worth $3 billion a year to Colorado—$145 billion to the nation as a whole.
The fair and efficient way of raising the taxes we need to reduce debt and pay for these public investments is to end special tax breaks enjoyed only by very wealthy households and multinational corporations.
For example, right now the higher your income, the more valuable your deductions. If you’re a millionaire Hollywood producer with a ski lodge in Aspen, you can write off nearly 40 cents for every dollar of mortgage interest you pay. But if you’re a middle-class homeowner in Breckenridge or Idaho Springs, you can only deduct 28 cents. If we limit deductions to 28 percent for everyone, we can bring in $500 billion over the next decade, according to the joint tax committee of Congress.
We can raise even more money by making sure giant corporations pay their fair share. Government reports reveal that the portion of federal revenue coming from corporate taxes has fallen by three-quarters over the past 60 years, and that in recent years corporations have paid taxes at only about two-thirds of the statutory rate. (In 2011, it was only one-third the stated rate.) Studies co-authored by the respected U.S. Public Interest Research Group consistently find household names like General Electric and Wells Fargo frequently get away with paying no federal taxes at all.
Close the principal loophole that makes offshore corporate tax dodging possible, and the joint tax committee of Congress estimates we’d raise nearly $600 billion over 10 years.
Mountain air is clearer than the swampy environment of Washington. Maybe that’s why the solution to our budget woes is clearer, too: reverse mindless cuts like the sequester that endanger middle-class communities, then bring down the deficit and protect important public investments with thoughtful spending reforms and increased revenue from those who can best provide it. We can only hope that Washington comes to its senses before wildfire season roars to life again here in the West.
Dan Gibbs is a Summit County commissioner and Tim Mauck is a Clear Creek County commissioner.