Editorial

The Obama administration projects annual budget deficits of more than a trillion dollars for at least the next 10 years. When you add that to the deficits racked up in previous years by Republican and Democrats alike, and the interest charges, you get $20 trillion.

In Washington, cutting spending is politically difficult because so much of that spending goes toward entitlement programs -- Social Security, Medicare, food stamps, etc. Couldn't Congress just raise taxes and have the American people cover the annual tab for the services they receive?

No. At least that's the judgment of a liberal think tank.

The Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, said recently that to reduce the annual deficit from the current 9 percent to 3 percent of the country's gross domestic product by 2015, a goal outlined by President Obama, Congress would have to raise taxes by 40 percent. That would push the lowest tax rate from 10 to 14 percent, and the highest from 35 to 48 percent.

If you only raised the taxes of the so-called wealthy families earning $250,000 or more a year, that top rate would have to soar to 77 percent. And you still wouldn't balance the budget.

"We conclude that politically feasible tax increases within the current tax structure cannot generate sufficient revenues to bring federal budget deficits under control," the Tax Policy Center said.

The words "current tax structure" are significant. The progressive income tax with its countless exemptions, deductions and other loopholes, is a mess that makes increases difficult to implement. The Tax Policy Center says 47 percent of U.S. households don't pay any federal income tax. That's why some want something even grander.

Former Federal Reserve Chairman Paul Volcker recently joined others around Washington pushing for passage of a value-added tax. Under the VAT, popular with European governments but not quite so with European consumers, businesses at each stage of production, distribution and sales pay a tax on the incremental value they have added to a product. That tax is added to the price of the product and recouped from the next buyer. The end user pays the whole tax load.

The beauty of the system, from a policy wonk's standpoint at least, is that there is a single rate, which is easier to tinker with than a complex tax code. It could raise huge amounts of money. The downside is everyone pays, even those who currently pay little or no income tax.

A recent survey by Rasmussen Reports found that 66 percent of Americans say they are overtaxed. That suggests that passing a tax everyone must pay would be an uphill push for Congress. For that we are thankful. While we can appreciate the elegance of the VAT, it is a dangerous weapon to put into the hands of a governing class that has an unlimited imagination for coming up with new ways to spend money, but is incapable of eliminating or even cutting programs. Passage of a VAT would be ruinous.

Paying down our mounting debt and addressing the deficits are daunting challenges. They will have huge impacts on our individual and collective fortunes for a generation.

When the nation's farmers and ranchers find their checkbooks out of balance, the first thing they do is cut spending to only what is necessary. It's the fastest way to stanch the flow of red ink. It is not easy at home, and it will not be easy to trim government spending that so many have come to enjoy with so little sacrifice.

Actual government outlays, not just the rate of spending increases, must be reduced. It must be cut at all levels, not just from the marginal fringes of discretionary budgets. There can be no sacred cows.

We sadly concede that increased taxes may be inevitable. But those 66 percent of us who believe we are already overtaxed aren't going to accept that unless first we see real and tangible cuts in spending.