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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,