By Tom Siracuse:
1. States and cities have budget deficits that must be solved by cutting expenditures, i.e. public sector worker wage freezes, layoffs, closing of schools, hospitals and firehouses, cuts in state and municipal workers’ wages, pensions and other benefits, raising tuition at city and state colleges and cuts in Medicaid to the poor.
True, state and municipal budgets are largely spent on public services but this is the function of local government. Other ways of solving these deficits are not to be considered, increase revenue by borrowing or raising taxes. Borrowing only delays the problem so what about raising taxes? The working class and the middle class already pay high taxes while their incomes have stagnated. But the ultra rich have greatly increased their incomes while they have reduced their taxes in the past 30 years. In 1980 the top 10% of income earners accounted for 33% of the nation’s total income. Now they account for almost 50%. The top 1% went from 10% to 20% of the nation’s income. 400 individuals possess more wealth than 50% of all Americans combined! Yet Wisconsin’s Gov. Walker gave tax credits to businesses and health savings accounts that cost the state $117 million, nearly the size of the state’s projected budget deficit. Gov. Cuomo refuses to extend the “millionaires” tax of 7.8% for incomes of $300,000-$500,000 and 8.9% for incomes over $500,000. These income brackets paid up to 15.4% in the 1970’s. Cuomo’s projected state budget deficit of 10 billion would be reduced by 4 billion by this moderate tax alone. The partial restoration of a stock transfer tax of only 1 penny per transfer and a 50% tax on bankers’ bonuses over $50,000 would eliminate the deficit and produce a surplus!
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