In a July 25th meeting of the Progressive Democrats of America Roundtable in Washington, D.C., Congressman Keith Ellison (D-MN) was discussing fiscal and budgetary shortfalls when he said:
"The bottom line is we're not broke, there's plenty of money, it's just the government doesn't have it."
Though Ellison doesn't appear to be concerned by the ever-increasing debt, many at the Congressional Budget Office (CBO) are, as they have repeatedly warned that unless current policies change, budgetary shortfalls will continue to climb over the next decade. "Such high and rising debt," they contend, "would have serious negative consequences," including:
- Increased federal spending on interest payments;
- Reduced national saving due to higher government spending;
- Smaller capital stock;
- Lower total wages;
- Less flexibility for lawmakers on tax and spending policy; and
- Increased risk of future fiscal crises.
Rep. Ellison has proposed a solution to ensure that the government does recapture some of that money it "doesn't have" at the moment. He introduced H.R. 1579, the Inclusive Prosperity Act of 2013, in order to institute a new tax on certain securities transactions. Ellison contends that this could raise upwards of $300 billion per year.
The Congressman's proposal is a form of transaction tax, which is one of the reform options that NTUF polled our members and associates on during our Milton Friedman Legacy Day event. It was not as popular with the taxpayers we spoke to as the FairTax and Flat Tax, two other options that tap into consumption instead of income.