In a July 24 local view, “Debt deal must spare Social Security, not raise taxes,” U.S. Rep. Jaime Herrera Beutler, R-Camas, said one thing she would not do is to raise tax rates to help solve our nation’s budget deficit. Looking at how taxes have affected the national budget in the past is a good way to understand this approach.
In President Reagan’s first term, we cut the tax rate on the wealthiest taxpayers, and the deficit began to increase. This continued through the George H.W. Bush administration.
In President Clinton’s first term, we closed the gap between revenue and spending, and we began to run a surplus so we could start paying down our national debt.
After Clinton left office, taxes on the wealthiest were cut again. This started the deficit spiral anew. In 2008, the George W. Bush administration and Congress used taxes to bail out large banks. This, coupled with the income tax drop caused by the recession, dramatically added to the deficit. In 2009, because of the job stimulus bills and the added income tax it generated, along with some program cuts, the budget gap closed a little.
What this shows is that when we cut taxes on the wealthiest among us, we ended up with budget deficits. I hope Herrera Beutler understands this.