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Avoiding the Fiscal Cliff: A Fair and Balanced Solution

Updated on December 10, 2012
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In less the 1 month, the United States Federal Government will go over the dubbed “fiscal cliff.” The Fiscal Cliff is a series of automatic spending cuts and tax increases that Republicans and Democrats both agreed to during the past debt ceiling debates. The parties came together in voting for the fiscal cliff, not because it was good policy, or the right solution, but rather because they couldn't agree on a sensible solution. The idea was that sending the US over the fiscal cliff would be too irresponsible and that avoiding it would be motivation for both parties to come together on a solution.

This brings us to today, the US Congress in nowhere close to coming to an agreement. Each Party has staked out its positions, and they are showing no sign of compromise either way. We have a President who, instead of taking charge after his reelection, is sending his Treasury Secretary to do the negotiating while the President hits the campaign trail, something he is much better at then actually negotiating. We have Democrats holding hostage 98% of the US population because they want the rich to pay more to help close the budget deficit. We have the Republicans holding 98% of the US population hostage because they don’t want small business to pay more and stop hiring. After an election season that saw no change in political control, that could be interpreted as a mandate from the American people, both parties seemed more inclined to staking out campaign positions for the 2014 midterms then actually doing their jobs and working for the American people. Our founding fathers would be sickened at level of partisanship. They overcame much tougher issues then we face today. For the good of the Country, the Democrats and Republicans need to come together to not only restore faith in the US Governmental system, but to keep the US a viable nation.

In the short-term, the Republicans have the most to lose. No matter whose fault it is, going over the fiscal cliff will benefit the Democrats elections in the short term. Come the first payday after Jan 1, 2013, the American middle class will notice an obvious shortage in their paychecks. When they call their HR office to report a problem, they will learn that there is no problem; this is just their new tax rate. Suddenly their spending power is decreased; they can’t afford to pay those credit card bills from the holidays. They purchase less, which forces employers to cut help, which snowballs into another recession. Unfortunately for Republicans, if this happens, the Democrats and the US mainstream media will be in position to further paint the Republican Party as the party of the rich and out of touch with most American families. It will be said that the GOP's refusal to stop protecting the rich has led to this crisis that affects all Americans, but particular those in the middle and lower income brackets. If this happens the GOP can kiss goodbye control of the US House in 2014, along with any hope of taking the Senate. In 2016, anger from the American people will still be spewing and again, like 2008, the Democrats will sweep all three branches of the Legislative process.

In the long-term, the Democrats have more to lose. If the GOP gives them everything they want, their out-of-control spending habits and government regulations will further cripple America. Our credit rating will be decreased again. We will see at least 4 more years of 1 trillion dollar deficits that will ultimately lead to Greece like economic collapse and one can only question, what country would be big enough to bail us out? Our allies in Europe are already strained with the burden of bailing our counties like Greece; they couldn't even begin to handle our debt. If we go over the fiscal cliff and go into another recession, like stated above, in the short-term, this benefits Democrats, but after another 4-8 years in power, they will be out of Republicans to blame and our Country will not only still be in a crisis, but we will have trillions of new debt to handle in future budgets, all of which can be blamed on the Democrats. The bottom line is, in either scenario, the American people lose, and that just can’t happen.

Our Country was founded on the principles of compromise for a better future for all. Every major hurdle our founding fathers faced, with the exception of one, was handled during the US Constitution negotiations. These compromises led to the framework that built the greatest Nation this world has ever seen. The one thing they didn't deal with almost broke the Nation into two different counties, rendering it obsolete. Our leaders need to deal with it now, make the tough decisions and concessions instead of putting it off for future elected leaders to deal with.

The biggest issues on avoiding the fiscal cliff are fiscal sanity and revenues. Almost every American agrees that we can’t continue to have these trillion dollar deficits, especially if they aren't helping our economy. Likewise, most Americans believe that cutting everything is a bad idea and need some sort of revenue increase to balance out the budget. To avoid the fiscal cliff, and have a fair and balanced solution, the best answer to the fiscal cliff is a deal that cuts federal government spending, and increases revenue to balance out the budget. For that to happen, the following needs to occur.

TAX REFORM

Like it or not, the Democrats control 2/3 of the legislative making body of the US government, and a majority of Americans support raising taxes on the wealthy. Republicans will need to give here to force the ball into the democrat’s hands to see if they are “serious” about compromise as well.

  • The Republicans should move forward with a plain that raises taxes on the top 0.25% of income earners. By limiting the tax increases from the top 1% to just the top 0.25% saves nearly all small businesses, and wealthy individual business men like doctors, who play vital parts in our everyday lives from being hit with this tax increase.The average post-tax income for the individuals in the bottom 75% of the top 1% is between 200K and 350K, with a high around 3M. After you get into the top 0.25% of earners, who get into people making more the 3M per year and upward to the obscene amounts made by wealthy CEOs, athletes, and entertainers. These are the people that the Democrats actually want to go after.
  • The 2nd thing Republicans should present is ending loopholes. Companies like GE who made profits in the billions should have to pay their fair share of taxes on that amount. Closing other loopholes, like deducting business expense related to moving jobs overseas should also be at the top of the list.
  • 3rd and finally, the Republicans should push hard for implementation of the Romney plan of limiting deductions, while lowering some of the tax brackets. This will help stimulate the economy further and also increase the tax revenues paid by the wealthy and corporations without actually raising their tax brackets.

BUDGET CUTS


US spending is out of control. President Obama himself called Bush’s 500B dollar deficits irresponsible and immoral, but he has presided over four straight Trillion (with a T) dollar deficits. Republicans should not agree to any deal that does not include serious spending cuts.

  • Entitlement reform should be at the heart of this debate. While important, entitlements have grown too big and too many people depend on them. This system of entitlements is bankrupting America and we need serious reform to keep programs like Medicare and Social Security alive and viable in a fashion that doesn't further strain the US budget. While serious form is not likely before the fiscal cliff, cuts to the programs and a framework for restructuring these programs in 2013 is needed. The President offered 200B in cuts, it’s a start, and the Republicans should take it.
  • No more Stimulus money. President Obama and President Bush both have spent billions upon billions in economic stimulus money and none of it was really help the US economy. That doesn't even include the billions of special funding and tax breaks given to green energy companies by President Obama. If further proof is need that stimulus money doesn't work, nearly all 30+ of these companies have not only failed to hire more workers, but most haven’t even made a profit and are in bankruptcy. Stimulus is generally a waste of taxpayer money.
  • Across the board cuts. The US government wastes a lot of money. Just look at the General Services Administration spending scandal. Cuts can be made in nearly all federal departments. From the Dept. of Defense to cuts in the USDA, to cuts in the Dept. of Commerce, Dept. of Urban Development, and Dept. of Energy. With the exception to cuts in the dept. of education, the national park service and the Dept. of Veteran Affairs, all government agencies and programs should be able to be eligible for budget cuts from 2-10%, consolidated or eliminated altogether. Picking which ones will be stuff, buts that’s why we elected these people, to make tough choices.
  • Every businessman knows the most costly, yet most manageable expense is labor. Voting for pay cuts and pay freezes across the federal employment landscape will help solve the budget deficit gap. It won’t be huge and will largely be symbolic, but it’s definitely a place to start. Pay cuts should start at the top. In order for these cuts to be taken seriously and without the employee and union revolts that were seen in Madison, WI, the US House and Senate should vote for a 10% pay cut, and a 7% increase in what they pay for their federal benefits. From these all federal employees’ salaries (except Military pay) should be cut by 6-8% or at least frozen at current levels and all new employees should have their starting salaries cut 6-8% from current levels. All federal employees (except Military) should also pay 3-5% more for their benefits. Today over 455,000 federal employees make over $100,000 per year, putting them near the top of the income earning list. The executive branch has 1,877,990 civilian full time employees and nearly that much in part-time help. Add it all up and that’s at least a few million dollars saved right there.


We Need More of This
We Need More of This

OTHER REFORMS

  • President Obama asked for complete authority to increase the debt ceiling whenever he or any future President wants to. While this will prevent future debt ceiling fights in congress, it throws out any and all spending accountability and is a huge power grab. There are checks and balances in place for a reason and nothing could deteriorate this nation’s fiscal condition faster than giving any President a credit card with no limit. No matter what, the Republicans should reject any plan that gives President Obama or any future President that sort of power.
  • Extend the unemployment benefits. While costly, Republicans should vote to extend all unemployment benefits by an additional 9 months. If that is too hard to swallow, Republicans should agree to do so, only if it’s extended at 15% discounted rate for those who have been on it for 12 months or more. All new unemployment claims should be paid out at full value.
  • Have policy that creates jobs! Mitt Romney nailed it when he stated the best way to increase revenues is to increase is to have more people pay taxes. Currently, for various reasons, 47% of Americans don’t pay income tax. By creating more jobs, more people will be able to pay taxes and tax revenue increases naturally. Enacting policy that gives tax breaks to companies that increase their work force by a certain % and keep it at those levels for at least 18 months would help increase employment. Cutting some (not all) government regulations and red tape for opening new businesses, primarily for factories, off-shore-drilling, and coal mines/plants should also be a Republican priority. This will not only create new business income and more jobs (thus more tax revenue), but will also lead to a decrease in cost of goods, especially energy costs, which leads to more spending money for the everyday consumer, which leads to people getting off unemployment and savings for the government.
  • Letting the Social Security Tax breaks expire. Both parties basically agree on this, and it needs to happen. While it was nice for a year or two, it really didn't rouse the economy and further increased the burden which social security is on our budget.

    The above solution is fair and balanced. Getting all this done is no easy task. Some of the things presented here make me cringe. But in taking a cue from our founding fathers, a spirit of cooperation is needed and compromise leads to everyone being a winner. No one, not the Democrats, not President Obama, not the Republicans, and especially not the US people can afford to go over the “fiscal cliff.”

    The American people are fed up with the stalemate in Congress. The election is over, it is time to get to work. This, both parties will have to cringe, republicans on tax hikes, democrats on entitlement reforms, but if both parties come together, this could do down in history as one of Americas greatest compromises, one that ensured America would last, for generations to come.

Do You Think our Elected Leaders will reach a Deal to Avoid Going Over the Fiscal Cliff?

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    • Conservative Lady profile image

      Sheila 4 years ago from Surprise Arizona - formerly resided in Washington State

      I heard yesterday that Obama presented an outrageous plan to the Republicans and they laughed and rightly so. Then today the Republicans sent back a reasonable deal with tax reform and spending cuts. Obama refused to look at it. You cannot deal with somone who refuses to even look at your suggested plans. Very informative hub. Voted Up and shared.

    • point2make profile image

      point2make 4 years ago

      An excellent and well thought out hub Jmiller17....well done. Your ideas for a solution to the fiscal problems is innovative and structurally sound. The real scary part is that you have come up with an outline for a plan that could really work while the politicians are not even prepared to sit down and discuss any plan that does not, in the end, give one party or the other a political advantage. You put this nation first and they put their party and own selfish motivations above the country's needs. It is a frightening time for our country and these "criminals" in Washington are in charge. What's even more maddening is "we" put them there. Lord helps us in the days to come.

    • ib radmasters profile image

      ib radmasters 4 years ago from Southern California

      Jmiller

      While all you say is true, these are not the real problems. These are problems caused by the real problem, and that is the voters blind loyalty to their parties.

      For at least the last one hundred years there has been no change in the blind loyal party voter. They continue to vote for their party regardless of the failure of their party's elected officials.

      We don't need a tax reform we need a government reform. The structure of our government may have worked with 13 states and a few million people, but today with 50 states and over 300 million people it has failed.

      The size of the federal government was never meant to be this big. Not only has the number of agencies and employees have increased, but the scope of the government has also increased.

      The result is that the States are no longer to focus of taking care of the people as described in the 10th Amendment.

      The two party system has only moved the country to the left or the right, and hardly ever forward, while occasionally backwards.

      The SS, Medicare and now Obamacare shouldn't have ever been instituted and run by the government. These are TAXES that provide revenue, and the government, both parties, never tried to make it pay out the benefits. The FERS, Federal Employee Retirement Fund is a real pension and it is not run by the government. That is the kind of system that should have been run for the SS.

      As for Medicare, there are inherent problems in the system, as it has been plagued by Fraud early on in its lifespan. This fraud continues today, and yet Obamacare is siphoning money from it to pay Obama.

      It is not fair or reasonable for someone to be forced to pay into the SS and Medicare for their entire wage earning life, and that includes after getting retirement benefits.

      The government and not the people receiving the benefits from SS and Medicare caused its impending insolvency. The government should then feel the pain, and not the people.

      The government should start with getting rid of FERS, and FEHB and replacing it with whatever is available in the private sector. There is no reason why the taxpayers have to pay for these benefits.

      The voters are also responsible for not using the election to force both parties to have declared their plan to tackle the fiscal cliff. That is the voters should have made it clear that they wanted the candidates to agree to solving the fiscal cliff. Instead they reelected Obama who failed at meeting his 2008 election promises.

      The country is now in a divide by zero computation, and if you don't know what that means, please google it. Now you personally.

      ---

      Entitlement reform should be at the heart of this debate. While important, entitlements have grown too big and too many people depend on them. This system of entitlements is bankrupting America and we need serious reform to keep programs like Medicare and Social Security alive and viable in a fashion that doesn't further strain the US budget. While serious form is not likely before the fiscal cliff, cuts to the programs and a framework for restructuring these programs in 2013 is needed. The President offered 200B in cuts, it’s a start, and the Republicans should take it.

      ------

      The SS and Medicare shouldn't be touched, the people didn't do anything to make them take the fall.

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      Jmiller17 4 years ago from Marietta, Georgia

      @conservative lady. Thank you very much for your support and for sharing this hub. I appreciate it. Obama did propose a simply outrageous plan, and thankfully the republicans laughed at it. I hope they figure something out, but I doubt it.

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      Jmiller17 4 years ago from Marietta, Georgia

      @point2make thank you for your complements and for believing my suggestions would work. Personally, i'd rather see more spending cuts then anything, but I realize that we have to give a little to get anything. I hope in 2014 we elected a new bunch on both sides, but unfortunately I doubt that will happen. Thanks again

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      Jmiller17 4 years ago from Marietta, Georgia

      @ ib radmasters I totally agree with you on what our "real" problems are. People too often vote as you said, blindly for one party and never investigate the ideas and platforms and settle for the status quo. This is why George Washington warned against political parties in his farewell speech and his worst nightmares in how Washington works has come true. We DO need a government reform, but sadly, that is going to take a lot of time and it will take some event to put a bunch of people over the edge for this to happen. Problem is, the government doesn't fear it people, and why should they when we keep electing them when they haven't done a darn thing,

      I strongly agree that the Federal Gov was never meant to be this big, or this powerful and agree that there are many wasteful programs that need to be cut across the board.

      I disagree with your stands on medicare and social security. While the people on them aren't to blame for having the programs we face today, i guarantee the uproar would be felt from coast to coast if we tried to take them away. People don't deserve these programs. Our founding fathers wouldn't have wanted these programs. Since FDR, we have created a culture of "dependence" in the US, and SS and Medicare are apart of this. When this Country was formed, it wasn't the governments job to take care of people, make sure they had retirement money or healthcare. Neighbors helped Neighbors, communities helped communities. SS and Medicare, while now ingrained in our culture, should go through massive reforms and cuts, and should not be such a financial burden to the US government. These reforms should affect current or nearly beneficiaries, but future generations should expect a different type of system.

      Thank you for your comments. I appreciate them.

    • billd01603 profile image

      billd01603 4 years ago from Worcester

      Very interesting and detailed Hub on this very important issue. Thanks

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      Very thoughtful hub, JMiller, and I suspect if a solution is reached, it will probably be along the lines of what you suggest. There is no doubt in my mind that there will be a tax rate increase, but will it be the 4.6% Obama and the Democrats want ... probably not, although I do support the idea myself. The bottom line is the final deal needs to raise about $140 billion in revenues per year coupled with about $300 billion/yr in spending cuts.

      As a retired career employee of DoD, I have to say you have a fairly distorted idea of what it is like to be a gov't worker. When I retired, I was just about to break the $100,000 mark, but that was after 21 years of service and working in the highest reaches of the AF and DoD. My position would have been equivalent to the highest level in any big corporation save for the CEO, CFO, COO, CIO, and a few vice presidents. Most of the contractors I worked with made as much or more than I did with fewer years of service for their company. Further, I was typical for those making in the salary range.

      A 2012 CBO study backs me up on this. It found that if you have some college or less, you CAN earn more working for the federal gov't (between 10 and 21% more). If you have a bachelor or master's degree, it is about the same between federal and private sector. BUT, if you have a professional or doctorate degree, you will earn 21% LESS.

      I have a hard time paying attention to any argument about gov't waste until it is compared to private waste. Having a single number out there is worthless except in making hyperbolic statements. Now, if you say that gov't, on average, is 20% more wasteful than the privage sector, that is a statistic I can appreciate, other than that, zll you are proving is that you know how blow smoke somewhere.

      Finally, you said - "When this Country was formed, it wasn't the governments job to take care of people, ...". - you also say the founding fathers, meaning the subset who wrote the Constitution, wouldn't want social security or Medicare. How do you know this to be true? I know such an attitude is not explicit, or even implicit in the Constitution itself; in fact just the opposite is true when you consider words such as Tranquility, "general Welfare", "Persuit of Happiness", and Liberty.

      So your insight must have come from the writings of people like George Washington, John Adams, and Thomas Jefferson. If so, can you give me some examples?

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      Jmiller17 4 years ago from Marietta, Georgia

      @ My Esoteric

      Thank you for your response and feedback. I appreciate it. I thank you for your insight on what it is like to be a government worker. I did not take into account the years of service one works before achieving their pay grade and I am glad you brought that to my attention. I still believe that average federal worker, counting their benefits and work schedule has a better overall compensation package then the average private sector employee. For those working who have little or no college, the pay as you said is 21% more. People with Professional or Doctorate Degrees are not usually seeking employment in the federal government, and I would argue they make of a minor minor sliver of the overall government workforce. So, yes they make less, but it doesn't off set the over payments to the rest of the workforce. The average federal employee has either a 4 year degree or little or no college. Overall then, on average, government employees would make more than their private sector counterparts.

      My own personal experience with working for the government came at the state level. I had applied for a job for an administrative role in the University Hospital System. No College Required, stating pay, $58,500 before benefits. Compared to the private sector job I was in, this state job had much less responsibility, and no college required, yet played $14,000 more per year. This job was not worth that much and I will argue that a lot of the jobs in the executive branch especially are not worth what they pay. I will say that jobs in Defense should pay more as National Security is important. I will grant you that government at all levels needs to offer competitive pay to gain the best workers in order to increase efficiency, and we should especially look to increase the wages for positions that require a doctorate or professional degree.

      You try to compare government waste to private sector waste, but you can’t. It’s like comparing apples to grilled asparagus. It’s not even in the same category. First, private sector money is earned. The companies have to convince a customer or investor to give them money. No one has to fund or buy products from private sector companies. It’s voluntary. The government makes its income in a forced way; we are all forced to fund the government so they should be more careful with our money. If a private sector company deceives its investors or shareholders, the SEC punishes them and often jail time is given in major fraud cases. The government overspends on things every year, they haven’t passed a budget in 4 years (which is a very important thing in terms of financial responsibility), and we have a deficit in the billions which no private company could withstand for very long. I believe the government is very wasteful and no I do not have a number, but that fact is, since its our money, and technically the Government exists to serve “we the people,” they should have more fiscal common sense then they do. GSA overspent millions of taxpayer money. Congressional leaders vote for pork packages all the time (remember the bridge to no where???). Fiscal decisions like they wouldn’t fly in the private sector. Do private sector companies make mistakes? Yes! But when they do, there are consequences. They could go out of business. There is a major difference between the private sector and government and you can’t compare them.

      As to your last statement, as requested I have examples that validate my argument and nullify yours. The writers of the Constitution warned against that taking the terms that you mentioned literally, especially the “general welfare” clause and if you did, it was a major mis-interpretation of the Constitution. As you stated, these views were not implicit or explicit in the actual writing of the Constitution itself, but you have to look at the attitudes and meaning behind the words and look at the founding fathers intentions themselves.

      I have many examples, but I have narrowed it down to a few. I picked several from Thomas Jefferson, the writer of the Declaration of Independence, and a couple from James Madison, the Father of the US Constitution. I think these two men knew more than most what principles and values America was founded on, and what the role of government should actually be. I tossed in a couple more from other great founding fathers as good measure.

      "To take from one because it is thought that his own industry and that of his father’s has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association—the guarantee to every one of a free exercise of his industry and the fruits acquired by it."

      ― Thomas Jefferson

      I think myself that we have more machinery of government than is necessary, too many parasites living on the labor of the industrious.

      ― Thomas Jefferson (if he thought this back then, he be horrified now)

      (My personal favorite) -- “Charity is no part of the legislative duty of the government.”

      ― James Madison

      The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.

      ― Thomas Jefferson

      “A wise and frugal government… shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”

      — Thomas Jefferson, First Inaugural Address, March 4, 1801

      (My 2nd favorite) “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.”

      — James Madison in a letter to James Robertson

      If Congress can employ money indefinitely to the general welfare… The powers of Congress would subvert the very foundation, the very nature of the limited government established by the people of America.

      — Alexander Hamilton

      I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I traveled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.

      — Benjamin Franklin

      “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.”

      ― James Madison

      (technically, this quote is out of context, but when you read it in its entirety, even tho James Madison wanted grant federal aid and redistribute income around for a certain situation, he, the father of the Constitution could not find a passage that allowed it.)

      Bottom line, no, the Founding Fathers did not see welfare or taking care of the poor as a duty of the US Federal Government. They made this quite clear. It may not be explicitly written in the Constitution, but how they expected and wanted it to be interpreted was made very clear by them. I believe this evidence backs up my stance on SS and Medicare as a Unconstitutional extension of the federal government. Families are supposed to take care of each other. Neighbors and towns are supposed to take care of their own. The states can even take care of their own, if it is the wishes of the people they govern. But at a federal level, welfare is not supposed to be a duty or responsibility of the Federal Government. To argue the "pursuit of happiness" and "for the general welfare" gives the gov this power to employ these domestic programs is to twist the words and meanings of the founding fathers.

    • ib radmasters profile image

      ib radmasters 4 years ago from Southern California

      J Miller

      Thanks for the detailed reply to my comments.

      Passing Obamacare was an extension of SS and Medicare and it adds another budget problem.

      My point on the SS and Medicare is that these TAXES were created by the government and forced upon the people, and it should be the government that suffers for its insolvency, not the mandated wage earners.

      You didn't mention anything about the benefits, and pensions received by the government employees that also are burdens on the taxpayer.

      The size and scope of the federal government needs to be severely reduced. Pay cuts and n9t pay raises should be imposed on the government workers as they are in the private sector.

      Tagging should no longer be allowed when passing bills. That is how a lot of money gets spent under the covers of the bill title.

      Also it makes no sense to include government spending in the GDP, as it is only a sign of government growth.

      Last, we keep on hearing about discrimination this and discrimination that, but no one cares when it is the wealthy who are discriminated against by the government. Specifically, there should be only one tax bracket, and the Internal Revenue Code should be severely reduced as only the wealthy can effectively make use of it.

      Thanks

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      Great response JMiller, I will need to take in pieces. As to gov't pay, you might read the CBO report and refute its conclusion that there is no substantial difference between the private and public sector.

      You are quite right that as a percentage of federal workers, the professional/doctorate types is smallish, but, they are not insignificant. Further the power they wield in gov't multiplies their numbers. For example, many of the senior, non-political appointee, staff in the Office of Secretary of defense hold doctorates; when I was there, my boss did as did his boss as did his boss, but the Sec Def, the next lever up, did not. Several of my peers in the organization I worked also had doctorates. All of these people either made serious decisions or had great influence of these decisions in regards to both DoD operation policies and allocation of resouces. When you move down into the more technical staff of the Services, many doctorate level people are there as well. Virtually all of the professional staff at all of the research laboratories in and out of DoD hold professional/doctorates. In fact, the percentage of these degreed people,7%, is greater than that in the private sector, 3%.

      Looking at it from another direction, my step-daughter has worked for the Florida State attorney general's office for 15 years and is part of the administrative staff responsible for all purchases for the entire office. She has had a raise in five years and earns a whopping $35,000/yr.

      My wife, was a GS-12 with the Department of Agriculture. She was responsible for all aspects of servicing single family rural development loans for the entire state of Florida; this included total responsibitlity for all foreclosures except the parts that absolutely required a lawyer. In the process she managed those who serviced loans in a dozen or so local offices scattered around the State, keeping the trained and all of their work up to snuff. What do you think what position somebody in the private sector working for a comparable major financial institution might hold who had those responsibilities? She wasn't even a manager, just a staffer earning between $60K and $78K depending on length of service. Then there are those in the area offices below her doing similar things, just on a smaller scale, they would be GS-5 to GS-9s, that translates to $27K to $54K/yr. Is that the kind of overpayment you are suggesting federal workers get for the job they perform?

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      Your discussion on waste seem a bit "non-sequiter" to me in that you start talking about one thing, i.e., wasting money, and end up talking about something else, e.g., sources of revunue, the budget process (save the pork), etc.

      Waste is waste, regardless of who does it or where the money comes from. Except for "pork" which is probably unique to the gov't budget process and can, to some, maybe many instances be considered true waste (such as forcing DoD to build more airplanes than it needs), all other waste is identical between the public and private sector and is caused basically by the same thing; piss-poor management and control systems. Your example of GSA is perfect, somebody wasn't watching were they should have been, somebody didn't follow proper rules in planing for and authorizing those trips then auditing them later. All the processes and procedures were in place to stop that from happening, but it takes responsible management to make it happen.

      Now, lets take an example from the private sector. How about the $2 billion loss JP Morgan suffered because of that little "screw-up" of somebody not watching the store in their trading department; talk about unecessary waste!

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      Let's talk about your quotes, which I am going to steal, if you don't mind, they are great ones!

      Jefferson - "To take from one because it is thought that his own industry and that of his father’s has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association—the guarantee to every one of a free exercise of his industry and the fruits acquired by it."

      ― ME: Now who can disagree with this? I certainly don't. The key phrase, which I probably read differently than you, is "... because it is thought that his own industry and that of his father’s has acquired too much ...". Here Jefferson is talking in terms of penalizing someone for being too successful, he isn't thinking of somebody paying their "fair" share, whatever "fair" might be. Jefferson was a humanist, among other things, I am about done with a biography on him, his term as Secretary of State is about up; and playing hard-core with the poor isn't coming out in this book. I will let you know more when I am done. However, you get a much better sense of it with another quote you offered.

      Jefferson - “A wise and frugal government… shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”

      - ME: This is straight out of Locke's definition of why gov't exists, to protect the good guy from the bad guy and the gov't has "limited" powers to do that. Locke saw the role of gov't as preparing the way for good people to remain good, which is where I believe the idea of general Welfare comes from. Jefferson is saying the same thing with "... restrain men from injuring one another,...". The question is, how broadly or narrowly did he mean that? Did he mean it such that gov't let's good people starve in the streets through no fault of their own while ideally standing by watching? Somehow I don't think so, but that is the logical conculsion to what you propose isn't it?

      Did Jefferson say "I think myself that we have more machinery of government than is necessary, too many parasites living on the labor of the industrious." before or after he was President? Both Jefferson and especially Madison changed their views on "limited" gov't after having served a term in office.

      As to Madison's "...To take them in a literal and unlimited sense would ...", of course that is true, I would say the same thing myself about anything taken literally and with unlimited meaning. The question is, did Madison mean to take it unliterally and with no meaning at all? Or, is there something in between which Congress and the Supreme Court need to settle on as a reasonable definition given the instant environment the decisions are being make in?

      Time for bed, more later.

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      Good morning.

      - What if I asserted that "provide for the General Welfare" (what ever that means) IS an enumerated Power of Congress, would that modify your arguments any?

      - What if I asked you to consider that virtually all of those who are strick constructionists and believe there is no room for the federal government to do more than regulate interstate Commerce and provide for the national defense are those 1) from the South and 2) believe owning and working other human beings against their will is morally acceptable; while those who take a broader view of "general Welfare" generally come from the North and find slavery morally apprehensible. How does that work into your thinking? It goes toward worldview, of course.

      - What if I offer that at the time most of these quotes were made, the role of the Supreme Court as an actual check on Congress' excesses and the Executive branch was only theory then. Does that idea influence you in any way?

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      Jmiller17 4 years ago from Marietta, Georgia

      @ IB Radmasters

      SS and Medicare are complex issues that are engrained into our culture. In a perfect world, neither would have ever been created. I am not against SS in the sense that it provides a retirement cushion however there is no reason it needs to be as expensive as it is now. I am all for the money taken from me when I worked to be placed in my own private savings account, a forced saving account if you will. The way it currently is, it is too expense and too far in the red to be sustained as it is. I don’t believe we can eliminate these programs. However, I feel that people should not be as reliable on them as they are now.

      Government Benefits are expensive. I personally believe that no federal, state, or local employee should have the right to bargain for higher wages with MY MONEY. These high benefits put more of a strain on a state budget then a federal one, but I do think they can be scaled back; it just wouldn’t really make a dent on the federal budget deficit.

      I totally agree with the no tagging on bills and not including gov spending in GDP.I also strongly agree with tax reform. Look for my hub about it soon (2-3 months). I am a big supporter of the flat tax because it’s fair to everyone.

      thanks

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      Jmiller17 4 years ago from Marietta, Georgia

      @My Esoteric

      Thank you for your response. I appreciate the detail. Likewise I will have to take this in chunks. As to government pay, I believe that it’s more of a strain on state budgets then federal one. I do believe a majority makes a better wage then there position should and more so I look at the value of the benefits they receive when looking at totally compensation, however I will read the CBO report and go from there. I am glad to hear the people making the decisions at the top (with the exception of cabinet heads) have a doctorate education. I also thank you for the insight you provided on this issue.

      I believe you missed the point on my discussion on government waste vs private sector waste. I believe “wasting money,” “source of income,” and “the budget process” are all related. I believe since the government gets its income via a non-voluntary process it should have more oversight with our money. Waste can manifest itself in many forms. Aside from the GSA, in Obama’s stimulus package $300,000 went to study peoples use of malt liquor, another $300,000 was granted to study radioactive rabbit poop, and another $3.4Million went to build tunnels to safely cross the road in Florida. That’s just the tip of the iceberg. In the recently proposed Hurricane Sandy Bill, 20% of the 60B asked for doesn’t even go the Hurricane victims. $150M goes to an Alaskan Fishery for instance. We are allocating our money irresponsibably. Which is a budget problem. We have a huge deficit problem and the Federal Government continues to spend money on needless things. Unlike the private sector, the federal government is not for profit, but maybe it should be (or at least closer). I know waste and mistakes happen in the private sector and JP Morgan is a great example, but when compared to being 16T in debt, a 2 billion dollar mistake doesn’t seem so bad. In fact the Dept of Human Health Services spends 3X that amount in 1 day. I believe overall the Federal Government does not value the money we send them as much as a private company does the money it earns.

      I will offer my feedback to your response on the founding fathers quotes at another time. I need to go through your statements a little more carefully. Till then, Thank you

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      You make great points here. One I accept completely is "I believe since the government gets its income via a non-voluntary process it should have more oversight with our money." - no doubt in my mind about the truth of that.

      As to your examples of waste, I try to never take anything on their face. In this area there are too many examples of stupid sounding expenditures that produce great benefit; in fact folks in the House are starting to take time to highlight some of them to prove the point. Having said that, there are many examples of 'bridges to nowhere' as well. In any case, when given anecdotal evidence, I would have to look into each one to make sure it just isn't a case of picking a bad name.

      I have personal experience in this area, as well. When I joined the civil service at McClellan AFB in CA, our Air Logistics Base commander led a task force to investigate the $100 hammer and other such extravagant costs that were all over the headlines in 1983. As it turned out, probably 90% or better of the examples put forward of government waste in paying too much for parts was a result of how fixed costs were accounted for. The rest was true overcharging by the contractors, meaning poor monitoring by the gov't.

      My job with the gov't for most of my career was to try to keep the contractors honest and make sure the Air Force paid a fair price for the things it bought; ultimately I ended up as the cost analyst overseeing the Army's Commanche Helicopter program when I did a stint in OSD. That said, there is still plenty of waste going on and I have stories that would make your hair stand on end, and that includes the Commanche, which was ultimately killed after I left for political reasons; one of the stupidist things, in my opinion, the Army did with OSD's acquiesence; it was a well run program and a downright beautiful helicopter.

      As to gov't waste, true waste, in general, there is clearly enough of that going around, but, in the executive branch, it is more a result of a lack of accountability than anything else. As to Congress, I actually approve of the pork-barrel spending process; it is the only way much needed help gets to various communities. Its downfall is the secrecy in which it was done. It was that secrecy that led to the bridge to nowhere and other such waste.

      But, having said all of that, even if you stopped 100% of all wasted in the gov't, do you know how much effect that would have on the debt and deficit? Almost none, it wouldn't be noticable and that is terrible thing to say when we are talking about a couple of billion dollars.

      Let's say waste equals $10 billion a year. Do you know how many of those $300,000 studies of radioactive rabbit poop (which I can actually concieve of being important; not sure about the malt liquor though) it takes to spend $10 billion? Over 30,000, that is lot of unneeded programs, even for the federal gov't. And what are we talking about in terms of deficit reduction needed annually just to get things going in the right direction, $420 billion?

      While there is no question the gov't needs to keep a constant vigil on fraud, waste, and abuse and do much more than what it already is, the reason isn't to help with the deficit. The reason is my quote of you at the top of this comment; the gov't has a duty to the People to keep it at a minimum.

    • ib radmasters profile image

      ib radmasters 4 years ago from Southern California

      J Miller

      Thanks again for the detailed reply.

      While the Flat Tax is an improvement on the current Federal Income Tax it is not as good as a National Sales Tax.

      The Flat Tax is too high at 23%, and it also requires delayed looks at filings by the IRS. It encourages the government to continue spending, and it also requires private information to be divulged by the taxpayer.

      The NST would be set at 15% and it already has a model to run by using the existing sales tax imposed in most states. There would be no reason to keep the IRS at its current size once Income Tax would be abolished. The NST is a simple audit function.

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      My Esoteric 4 years ago from Keystone Heights, FL

      There are a whole lot of pluses for a NST and not too many minuses, so long as certain basic items (wholesome food, medicine, etc) were exempt.

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      Jmiller17 4 years ago from Marietta, Georgia

      @ib radmasters

      Actually i mistyped when I said "flat tax" I am more in favor of a national sales or consumption tax then a true flat income tax, but I am also open to different variations that have a combination of both. (the famous, or imfamous, 999 plan comes to mind)

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      Jmiller17 4 years ago from Marietta, Georgia

      @ My Esoteric

      Let’s talk quotes! – I think we have reached an intersection that has fueled that fire for so many political debates. That intersection is interpretation of the Constitution, and the founding fathers intent. What separates a lot of democrats and republicans is their interpretation of the US Constitution. To go back to the first quote you talked about in your response.

      "To take from one because it is thought that his own industry and that of his father’s has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association—the guarantee to every one of a free exercise of his industry and the fruits acquired by it."

      I agree with you on what you said about the difference between “fair share” and “penalizing” To put this into a more modern context. I have no problem with what Mitt Romney paid in income taxes. Yes, he paid a lower %, but it was the amount that made his contribution fair. Mitt paid about $1,300,000 in federal taxes last year. The average American made around $48,000 total. If you do the math, Mitt paid 26X in taxes, then what the average American made in total income. I believe this is more than fair. Rich people contribute more, much more, even if is at a lower % I am what you would call lower middle class and I have absolutely no problem with this in terms of what I pay in taxes, and what others pay. My interpretation of fair is what the current tax rate is. My problem with what the President wants to do is that he wants the rich to pay more, and my interpretation of his reasoning behind it seems to be more of a “penalty” then to be “fair”. I know he uses the phrase “fair share” all the time, but I don’t agree with it. My reasoning behind this is the a lot of people currently don’t pay any taxes at all. Yes, some deservingly so, but a good chunk of the “47%” are people who really never have, and never will pay taxes. They live off of welfare. By taking from the rich to pay for their lives we are essentially violating what Jeffeson calls the first principle of association. “To spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association—the guarantee to every one of a free exercise of his industry and the fruits acquired by it. I think we are trying to spare people a lifestyle of poverty by taking from people who have earned it. I will reference the Ben Franklin quote here as a better way of dealing with poverty.

      “A wise and frugal government… shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”

      I think this quote exists to say that government exists to regulate the playing field and give everyone equal opportunity, but not promising equal outcomes. The key part of this quote is” and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.” In your response you talk about how broadly one should interpret this, I think you have to look at the context of the all the quotes from all founding fathers. I will reference Madison’s quote here “Charity is no part of the legislative duty of the government.” That quote is clear as day. I take from this that it is not really the federal government’s job to take care of the starving. It sounds cruel, but that’s what he says here.

      To further elaborate on this, these quotes only apply to the federal government. State governments can do what they please for their constituents. That’s how this government was set up, for strong states under a united federal banner. My point is that if California wants a bunch of social welfare programs and high taxes to fund it, let them. That’s what the people voted for. What works in California may not work it Texas. What works in Georgia, might not work in Iowa.

      Every state has a constitution for a reason. The Government closes to the people is the strongest. It’s very easy for Texans or residents of California to oust their elected leaders. Easier then it is for an entire diverse nation to oust people. The founding fathers recognized individual diversity, and that’s why we have states, people tend to live in communities with similar beliefs (with the exception a few swing states). People can more freely remove from office state and local politicians, or move from that state if they don’t agree with its policies. It’s much harder to do such at a national level. In short, welfare programs should exist at the state and local level as a way for the states and local communities to take care of their own. I think this is what the founding fathers had in mind, for this to exist at a state level, and not at the national level.

      I will answer the scenarios who offered at a later time. Have a good holiday.

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      You took the words right out of my mouth in the first paragraph, JMiller; absolutely true.

      Let me ask some questions though on this fair thing:

      1. When you say "taxes", are you talking about income taxes, payroll taxes, or both? You end up with very different results based on which of the three you mean.

      2. What % of Americans do you believe draw some sort of welfare?.

      3. What % of Americans earning more than $100,000 pay no income taxes?

      4. More than $50,000?

      4. Was the tax burden on the rich fair in 1994?

      5. Is it fair that the ratio between the top income level in 1946 and the bottom was about 3 to 1, 4 to 1 in 1960, 6 to 1 in 1980, and now it is something like 9 to 1? (in a society where all income groups benefited equally from economic growth, the ratio would remain relatively constant over time even though in actual dollar difference between the two groups would increase substantially.)

      6. Is it fair for the rich to get things they don't earn simply because they are rich while everybody else must earn everything they get? (Think of the power money buys.)

      7. Is it fair to make the majority of American's standard of living decrease substantially while that of the wealthy won't be affected at all if a tax increase were spread evenly across all income groups?

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      My Esoteric 4 years ago from Keystone Heights, FL

      This quote of yours, JMiller, is key and defines the difference between conservatives and progressives, not communists - "I think this quote exists to say that government exists to regulate the playing field and give everyone equal opportunity, but not promising equal outcomes."

      Progressives couldn't agree more with this statement, I certainly do, while conservatives say the federal gov't, at least, has no business regulating the playing field or about anything else, for that matter.

      No progressive worth his or her salt believes in equality of income (a Gini indes of 0) among all in a society. On the other hand, they absolutely believe it is the federal gov't's role to make sure the rich and powerful don't take advantage of the weak and distitute; in other words to make sure the playing field is kept level relative to a person's motivation and talents;conservatives don't believe this, they are more into the "survival of the fittess" mode, think of a pack of jackles going after a giraffe. A giraffe could handle one jackle, but not a pack of them.

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      My Esoteric 4 years ago from Keystone Heights, FL

      I agree with your assessment where you mention California, with this caveat: the federal gov't has a responsibility to the nation, just is each state has a responsibility to its citizens. In my view, it is the role of the federal gov't to set a reasonable minimum standard of living which all states must meet, e.g., no slavery, minimal education standards to meet the needs of national security, baseline poverty levels, etc., but, all states may exceed the minimums if they so choose.

      Believe it or not, it is the conservatives who have violated that last thought. One example is not letting some states exceed the EPA standards for emmission control.

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      Jmiller17 4 years ago from Marietta, Georgia

      @ My Esoteric

      Going way back to the proposed scenarios.

      - What if I asserted that "provide for the General Welfare" (what ever that means) IS an enumerated Power of Congress, would that modify your arguments any?

      If it were an enumerated power, the interpretation is still left wide open. The keyword in my take on it is “general.” What is general welfare? What is General? This type of wording makes it tough to decipher in this day and age. I think we have the liberal, open definition and the closed conservative definition. I think the intent of the founding fathers was to have a strong state based government. They specially listed what powers the federal government had, and left everything up to the states. This provides a clue to there intent. If they wanted to place a check on something, they would list exactly what they could and couldn’t do. This is what the founding fathers did to the federal government, they explicitly listed the powers leaving the rest to the states. I think, if it were an enumerated power, it could be interpreted that the government’s role would allow it to build roads and bridges (that could also be classified under interstate commerce). I think managing/building power and utilities, and FEMA would be included. I also think running a government that promotes economic growth and development would be the major part of providing for the general welfare of its citizens. I can even envision it being used in part to give some unemployment benefits, however I still think they would be lower then what is provided today. I think that providing for the general welfare is to ensure they people have a government that works for them in terms of allowing them to make the best of themselves. Allowing equal opportunity, but not equal outcomes is the basis of this principle. So in short it doesn’t really modify my comments because the definition of “general welfare” is still open to interpretation.

      - What if I asked you to consider that virtually all of those who are strict constructionists and believe there is no room for the federal government to do more than regulate interstate Commerce and provide for the national defense are those 1) from the South and 2) believe owning and working other human beings against their will is morally acceptable; while those who take a broader view of "general Welfare" generally come from the North and find slavery morally apprehensive. How does that work into your thinking? It goes toward worldview, of course.

      I just watch the movie Lincoln so this topic is fresh in my mind. According to the movie, Lincoln was unsure if what he did in terms of freeing the slaves was constitutional. He was in a pickle. He did it because he can take property from waring nations by law, but by classifying it as such he called the south another country (which he said it wasn’t) and he called slaves property (which was the reason for freeing them in the first place). My take on this is that the south was fighting to protect their Constitutional Right. I don’t agree with it, but they had the right to. Just like the Westboro church has the fight to picket funerals, just like the KKK has the right to have a parade. Sometimes people use their rights in ways we don’t like. Obviously today we know it was morally wrong to own slaves based on the color of their skin, however during the civil war, it was a common and before that time, a widely accepted practice. What is more is that this practice was PROTECTED by the US Constitution. The point is that the founding fathers made the Constitution able to adapt to the changing times, but only through a ratification process. Ratification is a hard process to go through. This was for a reason. If we as a nation decided slavery was unconstitutional, then we had the right to try to pass an amendment, however if that process failed, the majority rules, and we would still have the right to own slaves. We need to respect the entire constitution, not just the parts we like. If we pick in choose, the legality of the entire document is invalidated. To uphold the integrity and power of the US Constitution, he must follow all of its laws, even ones we don’t agree with.

      In this instance, I am not sure if you can make the case that “providing for the general welfare” works to free the slaves. For one, half of the country didn’t consider them to be people in the first place. Two, the founding fathers put into the Constitution that it was legally to own slaves, so obviously they were not looking out for the general welfare of black people. It like gay marriage, It is a polarizing issue, on that is even more complex then slavery because nothing is noted ether way in the US Constitution. This is because in those days, interracial marriage was a sin, gay marriage wasn’t even thought of. Fast forward a couple hundred years and the US Supreme court will decide 2 cases on this issue. It could go either way. Currently in terms of legalizing it, the states are more in favor of prohibiting it then allowing it. Gay Marriage supporters have a 2-30 record when putting it to a vote, including a loss in California. If the Supreme Court says its Constitutional to deny gay marriage, they would have to have a constitutional amendment to make it legal. In 30 years, 90% of the people may favor gay marriage, but it would take an amendment to make it legal. The Constitution is written as is, and we need to read it with the intent of the of the founding fathers in mind. We can change it if we must, but there is a process for that.

      - What if I offer that at the time most of these quotes were made, the role of the Supreme Court as an actual check on Congress' excesses and the Executive branch was only theory then. Does that idea influence you in any way?

      No it doesn’t.

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      Jmiller17 4 years ago from Marietta, Georgia

      @ My Esoteric

      Let me ask some questions though on this fair thing:

      1. When you say "taxes", are you talking about income taxes, payroll taxes, or both? You end up with very different results based on which of the three you mean.

      Income, since that’s what all the fuss is about now anyway

      2. What % of Americans do you believe draw some sort of welfare?

      Between 40-60%, but closer to 50% I am ok with all veteran aid because of their service and sacrifice and SS because its really not their fault they rely on it.

      3. What % of Americans earning more than $100,000 pay no income taxes?

      No idea, but what about GE, who made billions and paid no taxes? Whose CEO was on Obama's Economic Council?

      4. More than $50,000?

      Please elaborate what you are referring to.

      4. Was the tax burden on the rich fair in 1994?

      Sorry, I was 8 then, and I haven’t looked it up.

      5. Is it fair that the ratio between the top income level in 1946 and the bottom was about 3 to 1, 4 to 1 in 1960, 6 to 1 in 1980, and now it is something like 9 to 1? (in a society where all income groups benefited equally from economic growth, the ratio would remain relatively constant over time even though in actual dollar difference between the two groups would increase substantially.)

      I don’t believe the ratio is fair, however I believe we created a society where it easy to be on welfare, and many are content with it and are not striving to get off of it. I worked in retail and I saw this first hand. I also have family that does the same. What is worse, is they teach their children to live like that and the ratio widens with each generation. Your stats basically indicates that starting with the New Deal and all the Welfare programs put in place by Roosevelt that this ratio has become more and more unfair.

      6. Is it fair for the rich to get things they don't earn simply because they are rich while everybody else must earn everything they get? (Think of the power money buys.)

      Fair, no. But it takes two to tango. Someone had to take the money/bribe. Money is tempting. There are many corrupt people that have money, however just because you have money, doesn’t make you corrupt.

      7. Is it fair to make the majority of American's standard of living decrease substantially while that of the wealthy won't be affected at all if a tax increase were spread evenly across all income groups?

      Being rich has its perks. A good quality of life is one of them. If the government was not such a nanny state, we wouldn’t need all of this revenue to fund it. Today’s revenue levels would be enough. If we don’t need to fund them, everyone pays less taxes and the middle class gets to keep most of its money and not worry about the tax burden. What we have today is government taking care of ill-fated people using the money of the rich, who have provided for themselves. That is redistribution, which I disagree with and I would argue the founding fathers also disagree.

      According to the CBO, in 2009, the top 20% funded 67.9% of the Federal Government’s Income Tax revenue the top 1% accounted for 22% all by its self. The rich pay a lot in taxes, their money funds the government. How much more of a % do they need to pay?

      I have Three Qs for you.

      If John Boehner had the votes to pass plan B, do you think it is a fair compromise?

      Do you think the US has a spending problem, or do you think we should have no debt ceiling?

      In 2001, the Democrats were against the Bush Tax Cuts for all Americans. Why oppose it then? Why the change? Is it because it now a tax hike and that makes for bad election cycles?

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      My Esoteric 4 years ago from Keystone Heights, FL

      Three quick answers, they rest will take more time.

      Plan B, as I understood it, locked in the tax cuts for all but those earning more than a million dollars. As nice as it would be to see the conservatives finally agree to some tax hike, it wouldn't solve the problem anywhere near as much as the $250K figure would. As to the reason for any tax hike on the rich, when I think of it, "fair" doesn't actually enter the picture and I think the Dems made a mistake choosing that as a battleground. The way I think of it is that we need the revenue and the wealthy are the only ones in a position to afford it without reducing their standard of living; everyone else would suffer, the wealthy wouldn't.

      If truth be told, there was no need for the Bush tax cuts at any level, we were doing fine without them. I would be in favor of letting the all rise if there had been no near depression. In fact, as I mentioned elsewhere, even if we go over the cliff, I don't think there would be a recession, or if there was, it would be small and short, based solely on the increase in taxes. Partial reasons would be consumer debt, although rising, is still much lower than what it used to be; business is floating in cash waiting for somewhere to invest it, again different than 2008; and the fall in oil prices would offset a little bit the rise in withholding.

      Having said that, if we do go over the cliff, we will face a deep recession if the automatic spending cuts take place, expecially in concert with the rise in taxes.

      Yes, the country has a spending problem that began again in 2001. Prior to that, we had a budget surplus. Since 2009, it is a could a, would a, should a proposition. The gorilla was the biggest recession since 1937 and the gov'ts reaction to it. If Obama had done nothing, as the oposition suggests, then virtually every economist of any tripe agrees, America would have been in its first depression since 1929.

      Given that Obama believes Keynsian ecomics works while Austrian economics doesn't, a trillion dollar stimuls was needed. (History now reveals two trillion was actually needed, but fat chance of that happening.) Add to that the three trillion dollar in debt driven solely from the mechanics of being in a recession; meaning at least that much debt would have accumulated regardless of who was President then the American economy already started out in a four trillion doallar hole. What all of those stats are leading up to is that if you back the four trillion out, I think you will find spending on other gov't programs has decreased from the baseline, not increased as I think you believe has happened.

      I would assert that, take away the impact of the recession, America had a spending problem in the 2000s but not in the 2010s.

      Why oppose the tax hike on the middle class today? Because it will drive more of them into poverty because of the 2008 rescession.

      So much for short, sorry. That said, you have asked great questions and posed provoking thoughts resulting in making mading this one of the most informative hubs in Hubland.

    • ib radmasters profile image

      ib radmasters 4 years ago from Southern California

      The problem is Federal Income Tax

      The solution is to Abolish it.

      As long as it exists it will be a problem.

      It ws most likely the pivotal point in the 2102 presidential election.

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      My Esoteric 4 years ago from Keystone Heights, FL

      I think you are right IB, it didn't seem either side could get much traction on any other issue.

      What my hope is once past this debacle of political in-fighting, regardless of the outcome, they will dust off the various flat tax proposals that have been put forward in the last couple of decades. Then, the argument can center around the size of the exemption before the tax kicks in. Fortunately, in that scenario, there is enough objective data available on what it costs to live at a basic level, to make setting that threshhold easy, setting political posturing aside. After that it is a simple matter of figuring out the appropriate rate.

      Two big fights, however, result from that, as I see it. One is what to do as the economy goes up and down, and two, the gorrilla, what is the spending level going to be that will need to be funded.

      Personally, I like a national sales tax, but that is just a pipedream.

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