The Fiscal Cliff and the Forty Seven Percent
As our economy is hurtling towards disaster once again, there seems to be plenty of people that want to raise taxes but just not on themselves.
Mitt Romney's now infamous quote that 47% were “dependent on government” is not exactly true. Let's be clear. 47% don't pay federal taxes or they receive more money back from taxes then they put in.
A large part of the 47% getting government “handouts” or entitlements are those that receive social security and don't pay federal taxes. Those people I have no problem with. I also don't have a problem for families in that 47% that are in the lowest tax brackets that truly can't afford to pay federal taxes.
What I have trouble comprehending is that almost half the tax payers in the United States can't afford to pay at least $100.00 in federal taxes.
I'm a republican who is open to raising the tax rate on the top wage earners but only if there is a flat tax across the board for everyone.
I want to cite two examples how punishing just the top wage earners have gotten out of hand. The first example is the cash strapped state of California.
Top wage earners in this state could face a marginal income tax rate of just under 52 percent if tax rates rise because of the passage of proposition 30 in November by voters in that states. Proposition 30 effectively already raised the rates of anyone making over $250,000
. Incidentally a $250,000 annual income in the state of California doesn’t go as far as in most states. Over half your income to the government?
My other related hubs
- Raising The Retirement Age Should Not Be An Option
Why the retirement age should not be rasied and how other countries choose a retirement age. Social security is also taking in more money now then it pays out.
- A Unique Method To Fix Social Security
Ho to fix social security to a modified privatization plan with greater benefits for the individual and little cost to the government.
- Why this is America's Future: Lower Wages, Fewer Hours, and Less Benefits
Reasons why America will have lower wages, benefits and hours slashed while companies reap profits. Looking at three companies, Walmart, Caterpillar, and 7-11
If over 50% of your income being taken by the government sounds outrageous consider the next example which takes place outside the United States.
France has now initiated a mind blowing “temporary” 75% tax rate on the top wage earners.
Where will this taxation stop on the wealthy without more revenue from other tax brackets? Is 35% as it stands now enough? Maybe 40%? Not enough? Let's make it 45%.
I don't want to play political games because I see blame on both political parties. That being said, I wonder just how many voters that voted democrat realize that republicans wanted no new taxes on anyone at any tax bracket.
I think that is a tad too unrealistic but so is the democratic push to just tax the wealthy. As I said when I started this article everyone doesn’t mind raising taxes on someone else, just not on themselves.
Personally I believe if the democrats could, they would tax everyone. Of course the republicans can't consider that idea as they are already branded as the party of the rich riding on the backs of the middle class.
An idea of how taxation through a one party democratic power has run amok only needs to look no farther then Chicago. The amount of “special taxes” in the downtown area would make your head spin. Chicago also has boosted the sales tax to 10.25.
USA Today has rated Chicago the most expensive city to do business in the United States. All this while city pensions are underfunded by $26.8 BILLION.
I'm saving the Chicago mess for my next article.
I know I don't have all the answers but I believe the first step would be a flat tax rate. There are those that want to see capital gains taxed at a higher rate. I don't agree with that. They are taxed at a lower rate because if you invest $10,000 dollars in a company and the company goes bust you lose the whole $10,000 of which you can only write off $3,000 in losses against your other income. I base this on the average individual investor.
I see the lower tax rate on capital gains as a reward for investing in the economy and the risk you take in doing so.
I would like to see loopholes closed such as giving tax breaks to oil companies that are making record profits.
Do people realize that we give $65 million in aid to China annually? Of course that is a tiny fraction of our annual budget but why pay this economic powerhouse anything?
I believe there are hundreds, if not thousands, of wasteful expenditures such as these examples which would add up to a significant revenue savings if we can eliminated them.
I also believe that we could drastically reduce our military in Europe. The cold war is long over and I think Europe can defend itself from any threat (and from each other).
The problem is politicians to get elected and to stay elected won't make the hard choices that need to be done. Can we blame them? We the voters are the one's that put them in office after all when they promise of doing more for us without charging us more. I cringe to imagine the state of our economy decades down the road.
Of course I will be 50 next year so I suppose things won't get too bad in my lifetime. I guess I can hand the debt we are creating to my kids and their generation and if they get lucky they can do the same to their kids and the next generation. So come to think of it, why should we even care?