By: Joanna Wilson
The Occupy Wall Street protestors are calling for higher taxes for the top 1 percent of earners in the country, but to solve the nations’ financial problems, 100 percent of Americans will have to pay.
Terrance Grieb, a University of Idaho professor of finance, said the first step back to economic stability is a balanced national budget, which would grow jobs and increase the health of the middle classes.
“I think that means that people in the middle class are going to have to give up their home mortgage interest deductions,” Grieb said. “You bring in new revenues and you also cut spending to balance the budget.”
The problem lies in deciding what to cut, Grieb said. Cutting medical and welfare safety nets could leave people without anywhere to go. Cutting education would damage the best option for the middle class to improve their station in life.
“There are cuts that can be made, and they will be painful,” Grieb said.
Grieb said taxes will need to be raised along with spending cuts to balance the budget.
“It’s got to be a combination of both of those. Now, as part of that, could we be raising taxes on corporations and the wealthy? Yeah, I think we probably could,” he said.
Grieb said the current tax code requires corporations to pay 35 percent, one of the highest rates among developed countries, but after loopholes and tax credits, most pay between 10 and 20 percent. But if the code was simplified and the leaks stopped, corporate taxes could still be cut.
“What we’ve got is this tax code that’s 2-feet thick,” Grieb said.
Grieb said even conservative hero Ronald Reagan raised taxes.
“How did we defeat Russia and win the Cold War? Star Wars – the nuclear race,” Grieb said. “We spent Russia into the ground. We spent so much on defense. That’s how we brought down the Berlin Wall. Then he realized he had to raise taxes to pay for it.”
Shelly Bennett, owner of Palouse Commercial Real Estate at 103 E. Second St., said the politicians on both sides of the aisle are to blame for the soaring deficit.
“They voted us into debt beyond anybody’s stretch of the imagination,” Bennett said. “We can’t continue. Everybody has to pay. They said 14 months from now, this country’s bankrupt.”
Many of the Occupy protesters are calling for radical taxes to shift the wealth held by the 1 percent to help the middle classes.
Jon Kimberling, owner of Kimberling Insurance Agency, at 205 S. Main St., said if the 1 percent were eliminated, entrepreneurs would lose an incentive to continue to develop new technologies.
“You think about the Bill Gates’ and the Steve Jobs,’” Kimberling said. “The innovation they’ve brought. They are deserving of what they’ve earned for that.”
Bennett said the housing bubble, which has further damaged the economy, was caused by relaxed lending regulations to move people out of poverty and into homes.
“I do a notary service, so I’m running around the county, and I’m notarizing documents from lenders that are all online lenders,” Bennett said.
She would go into double-wide homes strewn with beer bottles and people flopped on the floor, she said.
“You could look at them and say ‘they’re not gonna pay,’” Bennett said. “So they’re getting money against something they own because we’ve inflated it, and I bet they never made a payment.”
Everything was too loose, she said.
“Everything was ridiculous,” Bennett said. “So we have to pay the piper as a country. Everybody has to pay. Needs to pay higher taxes. Everybody needs tighter regulations.”
Borrowers should have 10 to 20 percent down, and Fannie Mae and Freddie Mac should be shut down, Bennett said.
“Asking for their student loans to be waved because of the housing bubble popping and they don’t have jobs – there’s no money,” Bennett said. “You can’t. There’s no money. The country’s broke. So they can’t spend their way out of the problem.”