Opinion
Securing Our Future Responsibly
By Charlie Crist
TALLAHASSEE -- Last year I supported Senator John McCain for president. Despite these efforts, the American public chose Barack Obama as the person they wanted in the White House to confront the worst financial market turmoil since the Great Depression and the worst recession in a generation. Regardless of whom they voted for on November 4, he is our President and every patriotic American should hope he succeeds in ending the economic problems that now beset our country.
Soon after his inauguration, the President signed legislation aimed at stimulating economic growth. Many good and decent people opposed this measure, and some even offered proposals to reduce the tax burden and the proposed spending that I would have preferred to see enacted. But the case for doing something to help the economy was overwhelming, and I was glad the President and Congress were able to pass a bill
But let there be no doubt, I am a fiscal conservative. Since I took office two years ago, we have cut state spending by $7 billion, lowered property taxes by an estimated $25 billion over five years and created innovative no-cost solutions like the Florida Discount Drug Card and Cover Florida Health Care Plan. In fact, the CATO Institute has recognized our state as the most fiscally conservative in the nation. And while we have taken these prudent steps, tough decisions lie ahead. As we make those decisions, we must also remember that our first priority is to the people we serve and to our responsibility to spend their money wisely while continuing to lessen their tax burden.
While I supported the stimulus plan, I oppose the President’s budget proposals, in particular his willingness to increase the top tax rate on personal income from 35 to 39.6 percent. Just as I supported the President publicly regarding the stimulus, I am publicly asking him to withdraw these tax increase proposals, considering the structural damage higher tax rates will do to the long-term growth potential of our nation’s economy.
In addition, the President's plan will severely increase our national debt. Even with the increase in federal revenues resulting from higher taxes and planned military widhdrawal from Iraq, the smallest annual deficit we will see in the next ten years is $533 billion in 2013. At the rate projected in the President's budget, the national debt will increase by $3.7 trillion by 2014. To put this in perspective, two years ago, before we started to hit the current crisis, the annual budget deficit was $162 billion.
History has demonstrated that deficit spending can be effective in times of economic crisis and war. In addressing the current crisis, the stimulus package would have increased the national debt by less than two percent in 2009. However, the additional expenditures in the proposed budget adds to that burden, taking the total annual increase in our indebtedness this year to more than 17 percent. Creating deficits greater than $533 billion per year for a period of 10 years while simultaneously raising taxes is both contrary to responsible economic recovery and ultimately unsustainable.
The destructive power of a program dependent on increasing taxes begins with the disincentive Americans will be given to work, save, and invest. As rates approach 40 percent or higher, what incentive is there to pursue greater productivity and innovation when nearly half of the benefit of such individual successes are captured by the federal government to pay its debts?
The personal incentive of income as a result of hard work is a cornerstone of American prosperity and must be protected.
The genius of the conservative approach to American capitalism has been to harness natural productive ambition by respecting property rights, honoring enforceable contracts, and pursuing relatively low tax rates that sustain the will to work. A budget that commits to raising tax rates during a deep recession and threatens – through higher spending – to raise marginal tax rates to the highest level in more than a decade will undermine every individual’s ability to harness these tried and true economic principles. The result would be an inability of our economy to right itself and slower increases in the living standards for all Americans across the entire income spectrum.
There is a better way. Rather than starting down the path of higher tax rates, I recommend the Congress and Administration re-double its efforts to reduce government spending. Give the President line-item veto power. Create a bipartisan task force to restructure government for a new generation of challenges. Eliminate duplicative functions across government. Modernize entitlements. Get health markets right. Combined with the anticipated return of the economy’s health, reduced spending will first help stabilize the national debt and create opportunities to reduce the burden being placed on future generations.
Charlie Crist is governor of Florida
Photo: Charlie Crist/FrontPageFlorida.com photo(c)