Countywide : County Issue Tax Increases

Saying that “more Americans must contribute today so that all Americans can do better tomorrow,” President Clinton has asked Congress to attack the federal deficit with a

broad range of tax increases on personal and corporate income, Social Security benefits, and energy. Are these tax increases justified?

Jim Damooei, Economics professor Cal Lutheran University The answer is, to a great extent, yes. A big proportion of the budget deficit is what we call a structural deficit, which does not go away as you recover from the business downturn. The structural deficit in the United States is as high as 67% of the entire budget deficit. Increasing taxes doesn’t always offer a solution because it has a negative impact on production, unless it’s geared to bring a positive impact to investment. That would be more like a package of tax incentives and tax increases at the same time. The more important part of the solution is to cut expenses. I don’t agree with across-the-board reductions. They should be targeted where we can cut expenses without creating a great deal of social and economic problems. Part of Clinton’s plan is that Americans must sacrifice today to have prosperity tomorrow. I can subscribe to that because what you are really talking about is that this increasing trend in the deficit puts pressure on long-term interest rates. This pressure is definitely not good for the economy, because higher interest rates will crowd out the recovery and put downward pressure on the economy.

Bill McAleer, Chairman and chief executive officer Ventura County National Bank Not when we had the option of a balanced budget amendment. The long-sought-after balanced budget amendment would have stopped any spending beyond present income levels. Future increases in income could have been part deficit reduction and part increases to the federal budget. Asking for a tax increase during a recovery period is unrealistic. Additionally, a tax increase with a deficit in the same year is not reasonable. Under his plan, we don’t stop running a deficit for several years. We merely reduce the deficit from a higher number to a less-high number. Whereas a balanced budget amendment would solve the problem now. . . . Why in the world don’t we stop them from spending today, instead of taxing the public and hoping it all works out three of four years from now? It’s like carrying a pail of water to a house fire. In Ventura County, the thing that we have to realize is that we don’t have to wait for Clinton or for (Gov. Pete) Wilson or for (Assembly Speaker) Willie Brown. We can better control our own economy locally with local city and county action.

Maxine Culp, Ventura County assemblywoman California Senior Legislature I think the country’s in the kind of shape now that we really need to do something. I agree with (Clinton) that we all have to make some sacrifices, as long as it doesn’t impact the low-income and middle-income people that usually get squeezed too much. I’m willing to do my part. I think most seniors want to save what we have for our children and grandchildren and our younger people. As long as it doesn’t mean too many of us having to join the ranks of the bag ladies, I would be willing to sacrifice some of my Social Security. Social Security never was meant to be a total income for people, but somewhere along the line the message has gotten distorted. If people are getting a lot more than they really need, maybe they could give up a few dollars for the sake of the country. I still believe that Social Security should be a separate fund and that it shouldn’t be rifled all the time. If that is kept in mind, then as long as seniors know that when they get to retirement age they are going to have something there, they will probably be willing to pay a little more tax.

Michael Saliba, Executive director Ventura County Taxpayers Assn. President Clinton has lost credibility by reversing his campaign pledge to lower taxes on the middle class. No tax increases are justified until there is a freeze on all new government expenses and programs, and all existing nonessential government programs are cut. During a time of deficits and shortfalls of funds, government needs to first cut expenses at all levels and eliminate all nonessential programs before taxpayers are further asked to sacrifice. President Clinton has reversed this process by asking for more taxes before guaranteeing cutting programs. Government at all levels must become more entrepreneurial and bottom-line-focused. . . . Every government program must be subject to a cost-benefit analysis. Each must have a sunset provision and be eliminated unless its renewal can be justified. Clinton now is starting to raise taxes just as the economy is starting to pull out on its own. To put in tax increases, at a time just before that recovery, sends the wrong signal to the economic markets.

Jerry Foy, President, Communication Workers of America Local 9575, Camarillo The tax increases are justified only if they accomplish the means they set out to accomplish: to lower the national deficit to a point where it’s controllable. I believe it is the time for someone at the top leadership of the country to take the bull by the horns and say, “Look, if we’re going to continue to have the quality of life in this country that we enjoy, sacrifices are going to have to be made.” Over the last 12 years, the standard of living in this country has slipped tremendously. The middle class has suffered through this thing since the beginning of income taxes. We’ve footed the whole bill, or at least a large portion of the bill. To further place (burdens) on the middle-income earner is something I don’t necessarily agree with. But if we’ll reduce the deficit and bring the national debt under control, I’m for it. I’m glad to see him take the leadership role in (stimulating jobs). As the good-paying jobs in the U. S. continue to be shipped offshore or reduced to lower-paying jobs due to consolidations and layoffs, the government has to step in to jump-start this economy.