Why are America’s
budget problems out of control?
The American Congress
has re-elections every two years and thus its composition changes every two
years. A new Congress is eager to approve new laws which are fueled by the
12'000 active lobbyist in Washington, DC, working towards their own goals and
their own interests. Once a law is passed offering benefits or tax credits for
a certain cause or product e.g. subsidizing cotton or energy; that federal
expenditure remains in force moving forward until Congress cancels the law.
Unfortunately, such cancellations of subsidies do not happen but more are added
every year. Expenses go up every year almost unnoticed.
Income is reduced
because of the constant effort to lower taxes. Profits from large companies enlarged
from loopholes and exceptions created in their favor through lobbying. Small
and medium size companies bear the burden.
Did you know that between 2008 and 2010, up to 30 large corporations
spent more money on Lobbying in Washington than they paid in income taxes?[1]
An increase in
subsidies and a decrease in tax income create a gap and build a structural
deficit. Cyclical changes influence the deficit like heavy waves however they
do not solve the problem to reduce the deficit.
[1] Zaid Jilani, “Between 2008 And 2010, 30 Big Corporations Spent More
Lobbying Washington Than They Paid In Income Taxes,” Think Progress Economy, December 7, 2011
No comments:
Post a Comment