Dear editor,

It is not often that I see an article by a Republican in Congress that makes a valid point (or, for that matter, contains any truth) but Congressman Brad Wenstrup’s article in the May 5 Clermont Sun does make a valid point. The 9 percent of the budget that goes for interest payments on the national debt is excessive. While most economists do not think it is necessary to entirely eliminate the national debt, most would agree that greatly reducing the debt would be beneficial.

The question then becomes how to go about reducing the national debt. One way would be to make corporations pay taxes on the profits that they claim were generated in such tax havens as the Cayman Islands (corporations often have a presence there that consists of a post office box). The IRS estimates that this particular scheme defrauds America of upwards of $350 billion annually.

Another way would be to honor IRS requests to hire more accountants. The IRS has been making these requests of Congress since the days of Dennis Hastert and Tom Delay, but the Republicans have always blocked funding for this purpose. Being understaffed makes it almost impossible for the IRS to do a thorough job when General Electric, which has over 1000 tax lawyers and files over a million pages annually, files its taxes.

Another way to reduce the national debt would be to tax stock dividends at the same rate that earned income is taxed (stock dividends are taxed at a specially-privileged lower rate than the paychecks of working Americans). This was actually done the last time the tax code was reformed (in 1987) but has been changed since then.

Another possible way to reduce the debt would be to close many of the loopholes that have been added to the tax code since it was last reformed in 1987. Some of these tax breaks are specifically aimed at the wealthy, and average citizens cannot avail themselves of these breaks because they don’t own the assets needed to get the write-offs. Many of these loopholes benefit corporations. Over the past three decades there have been years when several of America’s largest corporations have reported huge profits and paid no federal taxes, and in some cases made huge profits and received rebates. Billionaire investor Warren Buffett famously stated that there is something wrong with a tax code that allows him to pay a lower effective tax rate than his secretary.

Another possible way to reduce the national debt would be to make hedge fund managers pay the ordinary rate on their income instead of the 15 percent that George Bush Jr.’s tax commissioner ruled that they could get away with. Last year, the richest hedge fund manager on Wall Street made $4.2 billion, and 24 of them made more than $1 billion.

In addition to his concern about the national debt, Congressman Wenstrup writes of his concern for the stability of Social Security. One way to put Social Security on a stronger financial footing would be to eliminate the cap on the Social Security Tax (income over $106,000 is not taxed for Social Security).

These ideas for dealing with the national debt are not new. In fact, these ideas have been around for several years. Strangely enough, the Republicans have not acted on any of them.

Paul Schwietering