Did You Pay Your Taxes?

Playing Politics With Our Money

Yesterday was the official filing deadline for paying your FIC, a day many Americans find glee in. I know, I know... What the heck am I talking about? This year it is estimated that 45% of the work force in this nation won't pay one red cent in income taxes. In fact, may of those people will receive back more than was deducted from their pay checks to cover any taxes if they were due. It happens. Then there are the rest of us.

Carney (Gibbs Lite), Obama's press secretary, told the assembled journalists yesterday that the 45% of those exempt from paying taxes, in fact, do pay taxes. Mixing apples and oranges always seems to be the plan out of The Whine House. Of course they do. Our government wants to try to tax anything that moves and isn't nailed down. But the other 55% who do pay their share of the income taxes collected also have to pay those same taxes that those who don't are paying. DUH! There must be some logic there, but I fail to see it.

Along with the filing date this particular year came some unhappy news from the S & P folks that our credit rating, though not downgraded from a AAA rating, was tagged with a negative rating. The IMF just issued a stern warning to this administration which whistled right by them. The Chinese, who Obama seems to admire, issued a warning recently too that our deficit is making them uncomfortable. They buy a lot of our debt ya know. All these things combined in a short period of time should trigger the government's brain that we are in deep - too deep.

So the answer, or a large part of it anyway, in some circles (Obama's in particular) seems to be to raise taxes once again. Economists know that doing that throws a wet blanket on an economy. That's the ticket we need right now. Right? The recession is over and Obama rode to the rescue, according to Obama anyway. Right? I'm hearing that if gas prices continue to spike upwards we're going to do the old double dip routine and that I do believe to be true. The world runs on oil whether Obama likes that or not. Back to taxes.

Many reports on this issue came out on Tax Day this year and there seems to be a consensus,by economists anyway, that raising taxes isn't the panacea to solving our debt crisis. It sounds good politically when you're Obama out there campaigning away trying to stir up his base of free loaders in his continuation of class warfare, but it just doesn't wash as sound economic policy for this nation. So here's some data to examine.

One study, done by a non-partisan group, finds that in order for Obama's present budget proposal to even come close to balancing it would require taxes to be raised by 150%. That's probably a good thing right? Unless it happens to be yours that are being raised by 150% too huh? Under the present system (read above) to try to balance this using taxes alone it would have to more than double on everyone, including the middle class. But hasn't Obama promised not to ever increase taxes on the middle class? Yes he has, along with a lot of other broken promises he has so far made.

This is all about tiers - not TEARS - but tiers, though tears might be more appropriate. The top tier already pays the largest percentage collected. So we raise their taxes and collect billions more from them, along the way stifling the prospects of future job creation, and a small dent is made in the deficit, not the national deficit but the present budget deficit.. Without making the spending cuts necessary, the stuff rolls down hill to the lower tiers. That's including us stuck here in the middle. Now understand that what I am talking about here is to try to keep up with current spending levels, not including all this additional investment that Obama eluded to in his budget speech that was really a campaign speech.

Looking at IRS data for 2008, you will find that the top 5% of earners ($160K and up) paid 59% of the FIC collected. Those between $33K and $160K, the middle class, contributed an additional 39% of the total paid. These are facts, not Obamaisms. The bottom tier contributed the remainder of the chump change that was collected. Factoring in the estimated 45% of those who pay no taxes might illustrate the unfairness involved here. But then again, according to Carney, they do pay taxes. Yes, the same taxes that the upper tiers also have to pay you blooming idiot.

It's a pretty much agreed upon fact that tax hikes won't have a significant impact on reducing the federal budget deficit. Another economist has estimated that every swinging Richard, and Jane, working in America would have to pony up 60% of what they earn in order to reach the balance point in Obama's proposed budget. Give that some serious thought about what is being proposed by this administration. That is "to balance" the budget without making any headway on reducing the federal deficit. So that's acceptable to you? Run your household like that and we'll see you in bankruptcy court before too long. You can't continually spend more than you make. Life just doesn't work that way and most people are aware of that.

Projections to economists are their bread and butter so lets look at one. If taxes are the answer, using our tiers again, the top moves from 35% to 88%, the middle slides up from 25% to 63% and the lower moves up from 10% to 25%. The ones who pay no taxes move from 0% to 0%. That's just to cover current spending. How comfortable are you with that happening?

So if everyone's taxes were more than doubled and you still haven't solved the basic problem, what is really being proposed? I call it smoke and mirrors. You call it what you care to call it. So what's the problem, FP, you ask? Spending is the problem. You can't spend more than you make. You can't print money to cover it because it becomes worthless paper. After a while toilet paper may be worth more than our dollar bills are.

Draconian cuts in spending will be necessary to slay this monster. Whole useless departments in the federal bureaucracy may have to be axed. The federal bureaucracy may have to be cut by 50%. Won't you miss em? Then I read recently some partisan nitwit writing about Grandma having to eat dog food if Paul Ryans' budget proposal is adopted. Does Grandma have a family? Aren't we capable of taking care of ourselves and our own? Why is it the federal government's responsibility to feed Grandma?

The Snake Oil Salesman-In-Chief is at it again so stay on your toes. It isn't at all about what he says, just watch what he does or doesn't do. The Gallup poll also released Monday found that 57% of Americans say that their tax amount was fair. They also went on to add that they think they are still too high. Most of us learn to run our households using a balanced budget approach at a minimum. It's high time that The Great Thinkers on The Hill wake up to reality. We're sinking and the faster they spend, the quicker we sink.

Have a nice day and as always,

The Frog

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Comments 43 comments

Hmrjmr1 profile image

Hmrjmr1 5 years ago from Georgia, USA

FP - You Nailed this one up and awesome lad. Smoke and mirrors won't hide the smell, BS will always smell the same.


Sunnie Day 5 years ago

Good Morning Frog,

"Another economist has estimated that every swinging Richard, and Jane, working in America would have to pony up 60% of what they earn in order to reach the balance point"

That's crazy isn't it? You wonder if it is cheaper for a two income family to actually bite the bullet and one stay home if possible. Are they really getting ahead by both working?

Thanks,

Sunnie


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Hmrjmr1 - The stench of business is usual in DC is permeating the air. That was one of the messages this last election sent to the idiots, but they again failed to get the message. Come on 2012.

Sunnie - Crazy? No dear, I call it a federal government that is out of control.


breakfastpop profile image

breakfastpop 5 years ago

Great job. These clowns in Washington don't think in terms of real money, you know, the kind that is in their bank account, pay check or 401 K. It's our money they are playing with and that makes all the difference in the world. Our government is a bloated redundant tiger that must be put on a diet and tamed. Voted up useful and awesome.


partisan patriot 5 years ago

Froggy

Raising taxes won't begin to close the gap on the deficit but it will make the Obama, Lenin and Trotsky Bolshevik's feel so much better.

That's what Socialism is all about spread the misery around!


Old Poolman profile image

Old Poolman 5 years ago from Rural Arizona

Up and everything but funny, because it is not funny. This and many other things about our current government are out of control. I hope and pray we can get it under control while it can still be repaired.


Carpefriggingdiem profile image

Carpefriggingdiem 5 years ago

I paid on time. Frigging jackasses that run this country. Makes me frigging sick. I already raised my kids. Now I have to support some more. What the hell is going on with that?

Had a Census Bureau person call the other day---after I found out what I had to pay in taxes. They have sent multiple surveys to me to fill out. They want to know something about "college graduates." They have called here three times. The woman on the phone said she knew that I had refused to give the information in the past, but wanted me to reconsider. So I asked if I would get paid. "No." I asked if I cooperated would the government balance it's budget. "I can't promise you that." So I asked why they needed the information. "So we can do a better job of distributing funds." Well, that one really pissed me off. I told her to take me off their calling list, that I was filing a complaint with the DO NOT CALL people and I couldn't give a flying flip about giving money away---other than the fact that I thought it was stupid---and by the way, how long have you been making these annoying calls? Have you been hired with Stimulus money to pretend like you have a life and a real job? Don't call me anymore, you assholes, you are lucky I pay my taxes at all.

I'm a little tense about this issue of taxes, don't ya know.


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

BPOP - As I'm fond of saying, "It's always easy to spend other people's money."

partisan - While they're raising they can reach into the 45% people's pockets too. WHOOPS! There went those votes time?

Carpe - I can hardly tell you're tense. The Census people calling now makes very little sense. You sure it wasn't DHS?


T4HOTA profile image

T4HOTA 5 years ago

Another interesting and useful hub, FP.


dahoglund profile image

dahoglund 5 years ago from Wisconsin Rapids

The people should be taxed only enough to pay necessary expenses to run the government. It should be the responsibility of the government to keep taht as low as possible.


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

dahoglund - BINGO!


Carpefriggingdiem profile image

Carpefriggingdiem 5 years ago

Froggie, it was, in fact, the jackasses from the Census Bureau calling me. I don't know why they are doing it, except that it's likely that it's just another frigging way for the feds to spend money and employ people who otherwise would be unemployable. The Census Bureau kept sending me written forms to fill out. I never did. They finally had to send somebody to my house. It was a short conversation. Here's my name. This is how old I am. This is my wife. Here's how old she is. Nobody else lives here. That's all you need to know. Goodbye.


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Carpe - Take a good read for a broader view of what we are facing. Good analysis here. Thanks!

http://hubpages.com/hub/Lets-Regress


Ghost32 5 years ago

Solid Hub as always, Frog.

Uh-oh. Rhyming bug got me again...trying to hold it off...NOOOOO!!!!

This ain't psychology so let's regress

Get rid of the invasive I.R.S.

Slash that spending with a double-edged sword

Cut out czars and even Obama's personal hoard

GAAAH-H-H!

Okay, choked that compulsive rhyming sucker bug back into submission...for the nonce.

Up and Awesome.


The Frog Princess profile image

The Frog Princess 5 years ago from Florence area of the Great Pee Dee of South Carolina

Taxes done and once again not a pretty site. More money for the govtment to blow!


poorconservative1 profile image

poorconservative1 5 years ago

To be honest, I don't always understand the numbers. 38% this or 45% that. But I'll tell you a number that I do understand. Have you had a look at the debt clock. Just the debt alone is costing us $58,000 dollars a second. I don't see how taxing a few millionaires is going to fix that. We've got to get this spending under control.

Thanks

Chuck


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Chuck - I post it often so lets take a look from just a few seconds ago.

http://www.usdebtclock.org/

Makes me dizzy if I sit there and watch it too long.

Here's the newest http://hubpages.com/politics/What-Its-Not-About

The Frog


joer4x4 profile image

joer4x4 5 years ago from Philadelphia, PA

The numbers also show balancing the budget is impossible with 100% taxation.

Nice job.


Old Poolman profile image

Old Poolman 5 years ago from Rural Arizona

New EZ tax form:

How much did you make?_____________

Send it in!


Texasbeta 5 years ago

By whom is it "agreed upon" that tax increases will not affect the debt? Taxes are at their lowest point since Eisenhower. Over 47% of the country doesn't pay taxes. The top 2% pay on average 17% in personal income tax despite their levied 38% tax bracket. Corporations that are transnational pay an average of 2% in corporate taxes. Our revenue from taxes when adjusted to inflation are at their lowest point in 60 years. There isn't enough revenue, and THAT is agreed upon by almost everyone...everyone that isn't an ideologue or being paid by the Koch brothers that is.


34th Bomb Group profile image

34th Bomb Group 5 years ago from Western New York State

WELL DONE, your Royal Frogness. I pledge to spend more time here now that the "in the bag" pols & LEO's in this pit of a County have decided my ex is NOT a "threat to himself or others." B.S. a/k/a CYA.

Lovely to see your Royal Frog Son on the blog. I think we must TELL him (he's only a kid, after all) (but a darn smart one!)he MUST note his parentage in his name. (Well - maybe he doesn't want that, people may pre-judge him.)

GO AGGIES!!!!

F.Y.I. - I DID, finally, return my Census form. I didn't want some undesirable person showing up at my door.

To those questions they have no authority to demand an answer I replied: NONE OF YOUR BUSINESS!!!

I think they got the message as they did NOT send an ACORN hire here to clear up any miscommunication. Ha!


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

joer - You get it, some people don't. Thanks.

Texasbeta - Read the words on the bottle cap. It's all about excessive spending, not taxes. Try reading the article.

34th - You're the best dear heart.


Stu From VT 5 years ago

Up, Useful, Awesome, and Beatutiful! As usual, a great post from you.

You are absolutely right that taxes are only part of the equation. A fully tax based solution wouldn't work, as the economy would grind to a halt. We also need major entitlement reform, as well as very serious cuts to the federal operating budget. Unless we put EVERYTHING on the table, we are going to end up with NOTHING.

While the RSC proposal (the best so far) was more than our esteemed Congress could stomach, I was encouraged by the fact that the House vetted Ryan's plan. My fears are that:

(1) The Senate and the President won't support it.

(2) Ryan's plan is really only a start (it addresses the entitlement crisis, and a little under half of the operating deficit, but doesn't get us the surpluses we need to liquidate the official debt).

A full solution would be to take Ryan's plan as a beginning, and then in "round two" goose up the operating cuts by 150%, plus add about $1 trillion per year in extra taxes. So far, no serious proposal submitted addresses taxes at all.

The tax increases can't be via the FIT, as it would depress business investment and jobs, and likely lead to lower revenue. As I've mentioned many times, the FIT and FICA need to be eliminated, and replaced with a national sales tax or VAT. This way the tax base is broadened, so we can collect more revenues without imposing an onerous tax rate.


34th Bomb Group profile image

34th Bomb Group 5 years ago from Western New York State

I'm saying what Stu said. He's far more eloquent than I.


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

34th - Wait a minute here. I can't believe I heard that coming from the mouth of an attorney. LMAO!


Stu From VT 5 years ago

Hey Frog,

If VT can have one conservative, why can't there be one conservative attorney? :)

Stoo


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Stu - the 34th is one of my long time pals. She's the best!


Stu From VT 5 years ago

Frog - 34th and I are now followers!


LRCBlogger profile image

LRCBlogger 5 years ago

Frogmaster, your tax assumptions are generally correct but they are based on the US spending at the current rate. Both Obama's and the Republican plans call for deep cuts to spending. There will most likely have to be some type of mixture between spending cuts and raising taxes. This is not my opinion but the popular opinion among economists. Obama's plan is to put the tax burden on the rich (which he views as those families making 250k and more). A simpler solution would be to reform the tax code so that everyone is contributing except those below the poverty line.

The Republican plan is to have no new taxes but have much deeper spending cuts and end programs they call 'entitlements.'

I'm with the economist on this one, collect more revenue and cut spending at the same time. However, my view is to collect more revenue by reforming the tax code and cleaning up tax loopholes.


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

LRC - Your definition of deep cuts and mine may be quite different. Neither party is going even close to deep enough.


Old Poolman profile image

Old Poolman 5 years ago from Rural Arizona

LRC, I could not have said it better myself.


LRCBlogger profile image

LRCBlogger 5 years ago

Thanks Poolman!

Frogger, I see your point. So both parties are targeting the number 4 trillion over 10 years in deficit reduction. Based on our current spend rates, this is about a 11% Cut per year in spending. While that is significant, I can agree that others might not call this a 'deep cut.'


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Lets start by dismantling the Department of Education, the Department of Energy, HUD and Commerce. We can then begin to get serious.

The Frog


joer4x4 profile image

joer4x4 5 years ago from Philadelphia, PA

From what I see happening everyday here and abroad, it seems to me the economists have a good track record of being wrong over the years.

The only thing that happens with taxation is government grows and that's not good. Government produces nothing but legislation and debt. This current government is good at it.

My previous post was "The numbers also show balancing the budget is impossible with 100% taxation". That means if all of everyone's money is taken - it is not enough to cover the budget, that is what government is spending now. PS - there is no budget as there was none in 2010.

The economist aren't telling you that are they? Their solution is obviously wrong because taxation won't cut it.

All one needs to do is visit the FED and IRS sites and look at the numbers and do some simple math. These figures do not include earmarks or cost of current legislation. You don't need an economist.

You can collect all the revenue you want but you won't collect enough. There is not that much money out there and that's why they keep printing it. Hence inflation is now creeping in.


Stu From VT 5 years ago

LRCBlogger,

Frog is right. The proposals coming from the parties are junk. And Obama's latest spending cut plan, though significant in magnitude, is just a political ploy to placate centrists; he'd never alienate his liberal base by actually trying to push it through Congress and sign it. The House rejected the RSC plan, which though the most aggressive plan proposed so far, does not even generate surpluses to pay off the official debt. The House did vet the Ryan bill, but it would be a miracle if the Senate passed it, and Obama has sworn he won't sign it.

You are right that we need both spending cuts and tax increases. But the magnitudes necessary to resolve the entitlement cost crisis and pay off the official debt are more than either party can stomach.

As ghastly as the overall problem is, the problem can be fixed, but you need a president and Congress that has the guts to say to the people "All I have to offer is blood, sweat, and tears." You can't tell the truth to others when you're lying to yourself. This is government's biggest problem in regard to the fiscal crisis. The only way to really nail this is to elect enough people like Jim DeMint, Ron Paul, Michele Bachmann, Mike Pence, Sharron Angle, Marco Rubio, etc. who have the guts to stare the monster in the eye, and shove the ugly solution down our cowardly little throats:

(1) Phaseout the big federal transfer programs (SS, etc.)

(2) Cut federal payroll expense by 50%.

(3) Boost tax base 50% to get $1 trillion more per year.

We need a POTUS and Congress that are no nonsense fiscal hawks. The above three steps would let us cancel most of the off balance sheet debt, and pay off the official debt over three decades.

Stu


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

"You can't tell the truth to others when you're lying to yourself."

Excellent. Therein lies a major part of the problem Stu.


Stu From VT 5 years ago

Hi Frog,

I think the inertia in Congress in breaking, albeit very slowly. Prior to the 2010 campaign, no candidate would even dare bring up things like radical restructuring of the big federal entitlement programs, making multi-trillion cuts to government spending, or going to the fair tax. Admittedly, only a very few have come out openly for one or more of these, but the fact that they could win elections in spite of this shows that the egg is just starting to crack. Ultimately, the result lies with the people. While there are a few brave and principled people in Congress who will say and do what's right no matter what, most will only face the problem if they know it won't cost them their job. If we the people send that message, we'll get better performance on the budget issues. If not, Congress will almost certainly abdicate to the Federal Reserve and let them print their way through the issue. This will delay the day of reckoning, and substitute hyperinflation for a certain amount of debt reduction. It's sort of like trading one disease for another. Monetizing is just default in disguise; in either case you leave your creditors broke, the dollar tanks, and we have a depression. The only solution is fiscal.

The Ryan and RSC plans address, in part, what we need to do about entitlement and federal cost cuts. The missing leg of the stool is taxes. I've seen no proposal yet to significantly boost the tax base. I know this is the most politically sensitive of the three "legs," but we can't put off discussion of this forever. While major cuts in federal operating costs are necessary, the math just doesn't work unless a portion of those who are paying nothing in taxes contribute their fair share. We are trying to provide federal services to a whole country with only about 50% of adults paying any tax at all. It's not fair, and in all reality, it isn't sustainable. We are going to have to face the fact that aggregate federal revenue must go up, and try to implement it in such a way that nobody is overtaxed. That means broadening the tax base; those who have been getting away with murder via loopholes, shelters, cheating, etc. will hate this, and lobby like hell against those in Congress with the guts to take action. It's really sad, but in the end, we the people are our own worst enemy.

Stu


Stu From VT 5 years ago

Texasbeta,

As usual, you miss the whole point. While you, Frog, and I surely agree that government operating expenses must be cut very deeply, you are totally missing the point on taxes.

Frog's point is that closing the deficit, and raising a surplus to pay off the debt, cannot be accomplished by big hikes in FIT rates. Corporations and the investor class will stop creating jobs, because investment will offer so little after-tax return. As jobs sink, so does government revenue. I.e., preversely, the giant tax hikes lead to LOWER government revenue.

The trick is to broaden the tax BASE, not impose giant tax RATES. 50% of American adults don't pay any tax. Loopholes, shelters, and cheating abound. You need a simple system where everybody pays their fair share. The solution is to tax consumption (which won't deter the investment needed to create jobs), instead of production (profits, wages, and interest). Dump the FIT, and impose a simple flat tax on all end use goods and services. A 20% national sales tax would pull in $1 trillion more than the current FIT and FICA taxes combined. Then, cut government payroll by 50%, and we can pay off the official debt in 30 years. I've done the math. We can do it, but do we have the WILL to do it?

Stu


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Stu - You can kiss Texasbeta goodbye.


Stu From VT 5 years ago

Frog, too bad, he was so easy to beat that it went to my head. I was getting so narcissistic that I was thinking I could, dare I say, make a POTUS run (too bad you can't post pics here; you just have to imagine Obie with his chin out).


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Stu - I think you know how I feel about trolls.

Here's a video of how to deal with them.

http://www.youtube.com/watch?v=9b_ZwJtEC_g


Stu From VT 5 years ago

Nice video, and good advice.


The Frog Prince profile image

The Frog Prince 5 years ago from Arlington, TX Author

Stu - The guy just wants someone to pay attention to him. Maybe using common sense would be a better tactic.

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