Charles Jaco has written opinion and commentary pieces for dozens of magazines and newspapers. Each week, read and comment on a fresh on-line version. The discussion page enables you to share your view points world wide. If you would like to make a comment go to the " Join the discussion" link below. If you would like to view past editorials visit the Editorial Archive. Editorial 03/02/01 note: for links to information resources on the new Bush era, go to NewsBoom DEBT AND TAXES Just Like Your Family's Budget Only Different Oliver Wendell Holmes said, "Taxes are the price we pay for living in a civlized society." One suspects the words of the former chief justice may be sandblasted off the Treasury Department building any day now. The President wants a $1.3 trillion tax cut spead over a decade. Some Congressional Republicans want it hiked to $2.2 trillion. The Democrats suggest nibbling around the edges, proposing a mere $900 billion in tax relief. As tax time approaches, groups like Citizens for Tax Justice send out flurries of faxes to talk shows reminding right-wing hosts to remind their audiences about the omnipotent and abusive IRS. Being as greedy as the next guy, I'd love tax cuts. I'd love not paying any taxes at all, right up until the point the Social Security system collapsed, gaping sinkholes opened along the interstates, and our F-18's ran out of gas. But the roughly 40 per-cent of my paycheck that vanishes twice a month pays for all that, plus finding for schools, Medicare, basic genetic research, and military pay raises. True, my taxes also pay for Jesse Helms' salary, Bill Clinton's pension, and the new White House Office of Supernatural-Based Initiatives, but you take the bad with the good. Since journalism tends to be about as stable as the uranium atom, we make a habit of paying down our family debts as quickly as possible, just in case my bosses ever decide it's time for me to explore new career opportunities. It's odd, then, when the President trots out Joe and Mary Smith of Anytown, Nebraska and tells them his tax cut gives them $2,000 in tax cuts a year. The political spin, as always, is keep it simple so families can understand it. The corrolary is, the partial truth is easier to swallow that the whole truth. I'm assuming my next three novels will be best-sellers. Sop I'm assuming that over the next ten years, I'll have several million dollars in extra cash coming in. So this is a swell time to take all that extra money and remodel the house.The credit card bills can wait. My accountant assures me these are sensible, conservative projections, just like the Congressional Budget Office's projections of a $5.6 trillion dollar surplus through 2010. Ten years ago, the CBO was projecting annual deficits out as far as the eye could see. According to their projections, we should be about $500 million in the hole every year by now. They were wrong. We're running a surplus, which admittedly may not last long if the tax-hackers or the pork-barrel spenders get their way. But we still have a load of debt. The national debt clock, available on a number of web sites, keeps turning like the odometer on my 1986 coupe. Every man, woman, and munchkin in these United States has a share of roughly $20,000 of the debt. The Greenspan boys at the Fed estimate that if we started writing checks now to pay off the national Mastercard account, we could be out from under it in eight years. Some of the debt would require pre-payment penalties. What would you do? Every financial counsellor I know preaches paying off your debt first. Put the Discover and Amex in a drawer and starting zeroing out those accounts. That's what we should be doing here. If the surplus continues after the debt's paid, then start rebating the money to taxpayers asap. Like Greenspan noted, it doesn't help to have excessive private capital in the government's hands. But until the debt's paid off, it's irresponsible to be using money for either tax cuts or big new spending programs. The tax-cutters arguments sooner or later go back to the evils of the confiscatory IRS, a nice story if it were only true. The IRS budget has been hacked about 20 per-cent over the past few years. Almost no one with an income over $400,000 a year is audited any more. Instead, the IRS--under rules pushed by the GOP Congress--spends about 40 per-cent of its time auditing people on the lowest rungs of the economic ladder, people who use the Earned Income Tax Credit. The IRS has given up hunting for elephants in favor of bagging squirrels. Here's a realistic suggestion. I don't totally like it and neither will the professional tax-haters, but it might work. Take the surplus that's in-hand at the end of the fiscal year. Take eighty per-cent of it and pay off the debt. Put ten per-cent in an escrow fund. Cut rebate checks to taxpayers with the other ten per-cent. Repeat as needed. That way we lower the debt, which should lower interest rates, put a bit aside for a rainy day, and give the Smiths and Jonses a few bucks. The kitchen remodeling can wait until the Visa bill's at zero. Join the Discussion

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