So the MBTA, crippled by the additional debt assigned to it from the Big Dig, is now proposing significant service cuts as a partial solution to their chronic deficits. Public transit serves a public good, yet it is almost never profitable on its own. Should a public service be run like a business? Thousands of people depend on the MBTA for access to jobs and shopping, many more use it for tourism. What would be the impact to Boston if day trippers couldn't take the train into the city?
This is an ancient kabuki in government services. Drastic cuts are proposed, something happens to prevent it. The MBTA has made some strides over the last few years in curbing expenses. They still have capital costs that are high, given all the obligations the state has placed on them. Here in Salem they're obligated to build a garage facility (and there's another one going up in Beverly), but due to their financial issues the Salem garage is being chopped from 800-900 spaces to around 500 - barely more than the parking lot it replaces. Hingham got a $50 million tunnel because residents were so opposed to a grade crossing - that money would have built the entire garage here.
There's also a legal agreement to expand the Green Line into Somerville, and plenty of other obligations. The money's not there to fund it. So what's the solution?
My take is this (and I proposed something similar back in my pre-politician days): Currently we have a portion of sales tax revenue dedicated to the MBTA. It's obviously not enough. We also have a decaying road system, and only small sections of roadway that are tolled (the Tobin Bridge and Mass. Pike/harbor tunnels are the only tolled roads in Massachusetts - Route 93 isn't tolled at all). We have increasing road usage, so to me the obvious choice is to freeze tolls where they are (I think tolls are discriminatory - why should some roads be tolled and others not at all?), and increase gas taxes by an appropriate amount to compensate. Compared to some of the other states in the area (CT, NY, ME), we have one of the lower gas taxes around. They've been at current levels for a long time. I'd support raising gas taxes in Massachusetts by at least 15-20 cents per gallon, with the revenue split between the highway system and the MBTA. Gas taxes are a far more fair revenue raiser than tolls - the more you use the roads the more gas you consume.
This also gives you a further incentive to drive more economical cars as well - the less gas you use the lower your costs are. And a 20 cent raise would generate (based on numbers I looked up from last year) approximately $50 million per month - or $600 million dollars per year. That goes a long way towards solving the MBTA's woes and helping to repair our crumbling highway infrastructure. If we can also begin the process of eliminating tolls, so much the better.
Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Saturday, January 21, 2012
Monday, May 23, 2011
Fixing the deficit (for grown-ups)
Just as a follow-up, I re-did the New York Times' "You Fix the Budget" interactive puzzle this morning, just to re-remind myself of how to be responsible. Here are my choices: I have a couple of other ideas that would likely take care of the rest of the long-term issue as well.
Domestic Programs/Foreign Aid
- Cut foreign aid in half
- Eliminate farm subsidies
- Reduce the number of contractors
This first batch of cuts isn't huge, but it sets a tone. Virtually no industry in this country should be subsidized, we don't need to spend a lot of money bribing other nations, and we also shouldn't employ contractors to do what we can do with employees. I'd like to make some other cuts here that aren't listed as options, too.
Military
- Reduce nuclear arsenal and space spending
- Reduce military to pre-Iraq War size, reduce European and Asian troops
- Reduce Navy and Air Force fleets
- Cancel or delay weapons programs
- Reduce noncombat military compensation and overhead
- Cut troops in Iraq and Afghanistan to 30,000 by 2013
These seem like enormous cuts, but it's time to get out of our entanglements overseas. We have by far the biggest, most powerful, and most expensive military on Earth. We don't need that much. And we've effectively eliminated Al-Qaeda as a major threat, we don't need to worry nearly so much about the remaining Taliban.
Health Care
- Enact medical malpractice reform
- Increase Medicare eligibility age to 68
Malpractice reform is a good idea in general and that area of law is abuse-prone. It won't make a big difference by itself but conservatives want it badly and it's good to give it to them. Barring single-payer insurance, we should up the Medicare eligibility as long as the present system still stands.
Social Security
- Raise the Social Security retirement age to 68
- Reduce Social Security benefits for those with high incomes
- Tighten eligibility for disability
Again, people live and work longer, so delaying full benefits another year is fine. Cutting benefits a little for high-income people is harmless, and making it more difficult to claim disability is also a win. We've had a lot of creep in disability over the years.
Existing Taxes
- Estate Taxes: President Obama's proposal
- Investment Taxes: Return rates to Clinton-era levels
- Bush Tax Cuts: Allow expiration for income above $250,000 a year
- Payroll tax: Subject some incomes above $106,000 to tax
All reasonable ways to get revenue while still keeping taxes lower than they were early last decade. I'd go further on the payroll tax, though, and apply it to all income instead of the ceiling it'd be targeted for here.
New Taxes
- Eliminate loopholes, but keep taxes slightly higher
- Reduce mortgage deduction and others for high-income households
Yes, I'd "soak the rich" comparatively speaking. Film at 11.
Altogether, my proposal based on the puzzle takes us from a $418 billion expected deficit in 2015 to a $604 billion surplus, and reduces the structural deficit by 2030 from $1.245 trillion to $62 billion. On top of that, I'd propose a massive nationalization of basic health care, with private insurers free to sell supplemental and enhanced coverage on top of that. That would likely clear up the remainder of the long-term deficit and free up money that currently is lost to health care inefficiency.
What's your plan? I know what most of the Salem News commenters would say, and it's not pretty.
Domestic Programs/Foreign Aid
- Cut foreign aid in half
- Eliminate farm subsidies
- Reduce the number of contractors
This first batch of cuts isn't huge, but it sets a tone. Virtually no industry in this country should be subsidized, we don't need to spend a lot of money bribing other nations, and we also shouldn't employ contractors to do what we can do with employees. I'd like to make some other cuts here that aren't listed as options, too.
Military
- Reduce nuclear arsenal and space spending
- Reduce military to pre-Iraq War size, reduce European and Asian troops
- Reduce Navy and Air Force fleets
- Cancel or delay weapons programs
- Reduce noncombat military compensation and overhead
- Cut troops in Iraq and Afghanistan to 30,000 by 2013
These seem like enormous cuts, but it's time to get out of our entanglements overseas. We have by far the biggest, most powerful, and most expensive military on Earth. We don't need that much. And we've effectively eliminated Al-Qaeda as a major threat, we don't need to worry nearly so much about the remaining Taliban.
Health Care
- Enact medical malpractice reform
- Increase Medicare eligibility age to 68
Malpractice reform is a good idea in general and that area of law is abuse-prone. It won't make a big difference by itself but conservatives want it badly and it's good to give it to them. Barring single-payer insurance, we should up the Medicare eligibility as long as the present system still stands.
Social Security
- Raise the Social Security retirement age to 68
- Reduce Social Security benefits for those with high incomes
- Tighten eligibility for disability
Again, people live and work longer, so delaying full benefits another year is fine. Cutting benefits a little for high-income people is harmless, and making it more difficult to claim disability is also a win. We've had a lot of creep in disability over the years.
Existing Taxes
- Estate Taxes: President Obama's proposal
- Investment Taxes: Return rates to Clinton-era levels
- Bush Tax Cuts: Allow expiration for income above $250,000 a year
- Payroll tax: Subject some incomes above $106,000 to tax
All reasonable ways to get revenue while still keeping taxes lower than they were early last decade. I'd go further on the payroll tax, though, and apply it to all income instead of the ceiling it'd be targeted for here.
New Taxes
- Eliminate loopholes, but keep taxes slightly higher
- Reduce mortgage deduction and others for high-income households
Yes, I'd "soak the rich" comparatively speaking. Film at 11.
Altogether, my proposal based on the puzzle takes us from a $418 billion expected deficit in 2015 to a $604 billion surplus, and reduces the structural deficit by 2030 from $1.245 trillion to $62 billion. On top of that, I'd propose a massive nationalization of basic health care, with private insurers free to sell supplemental and enhanced coverage on top of that. That would likely clear up the remainder of the long-term deficit and free up money that currently is lost to health care inefficiency.
What's your plan? I know what most of the Salem News commenters would say, and it's not pretty.
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