Debt Ceiling Crisis Is A Massive Deception Against Public, Expert Argues

Richard D. Wolff, an emeritus professor of economics at the University of Massachusetts Amherst, argues the debt ceiling debate by Democrats and Republicans is actually “a massive deception against the public” since the best way to stave off default is to raise taxes, he argued in an essay for Truthout, on behalf of the Economy for All project of the Independent Media Institute.

Photo Insert: “It is elementary economics to note that if Congress raised more taxes or cut federal spending—or both—there would be no need to borrow and thus no ceiling on borrowing to worry about."

“It is elementary economics to note that if Congress raised more taxes or cut federal spending—or both—there would be no need to borrow and thus no ceiling on borrowing to worry about. The ceiling would become irrelevant or merely symbolic," pointed Wolff.

"Further, if taxes were raised enough and spending cut enough, the existing US national debt could be reduced… The real issue then is that when borrowing approaches any ceiling, the policy choices are these three: raise the ceiling (to borrow more), raise taxes, or cut spending. Of course, combinations of them would also be possible,” Wolff argued.

Wolff said the social security tax could be applied to all wage and salary incomes, not only those of $160,000 or less as is now the case. The social security tax could be applied to nonwage income such as interest dividends, capital gains, and rents.

The corporate profits tax could be raised back to what it was a few decades ago: near or above 50 percent versus the current 37 percent rate.

A property tax could be levied on property that takes the form of stocks and bonds as the current property tax in the US (levied mostly at the local level) includes land, houses, automobiles, and business inventories, while it excludes stocks and bonds.

The richest 10 percent of Americans own roughly 80% of stocks and bonds. The US property tax system is very nice for that 10 percent.

Another is the federal estate tax which a few years ago exempted under $1 million of an estate from the tax, but now exempts over $12 million per person (over $25 million per couple).

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