Tax Breaks and Budget Cuts

I saw this link posted on a friend's Facebook wall, and I couldn't not share it. Unless you've been living under a rock, you've heard a lot of talk of balancing budgets and reducing state and national deficits. You probably have some ideas on how to reduce budget deficits, and depending on your political ideology, they involve cutting spending or utilizing taxes. But what is the best course of action?

Well, the folks over at Center for American Progress decided to compare and contrast making spending cuts vs. reducing tax breaks, as seen here. And it's eye-opening. In the chart you'll see large sums of money that could be eliminated from the budget, depending on what gets cut. For example, low-income housing programs cost the nation $8.9 billion, which is the same cost of allowing mortgage interest deductions on vacation homes over ten years. Or how about $2.5 billion, which could be saved by either eliminating Low Income Home Energy Assistance (LIHEAP) grants for poor families, or ending tax breaks for oil companies. And, one last particularly striking figure: $44 billion. That's how much the government would save by cutting all of the programs on Center for American Progress' list vs. the $42 billion which would be saved by not extending Bush era tax cuts for upper tax brackets in fiscal year 2012.

According to this article, "The Federal Treasury loses twice as much revenue due to tax breaks than Congress appropriates on all nonsecurity discretionary spending." And yet, all of the current budget talks have been focused on cutting spending, not eliminating monstrous tax breaks for the elite few. I believe the reason for this is that spending items have a tangible presence on a budget--tax breaks do not. Psychologically, we feel better slashing the dollar signs we see on the surface, rather than looking at the deeper, wider budget picture.

I have a liberal ideology, and I believe government has a place in our lives to do good. Quality programming and services cost money, and I don't take that lightly. But we certainly need to have an intelligent conversation about just that. I believe these budget crises could be resolved if we evaluate our values and prioritize our spending and saving accordingly.