Raise Taxes

Barack Obama Says That What America Really Needs Is Lots More Debt

ObamacareWhen it comes to taking a chainsaw to the future of America, nobody seems more eager than Barack Obama.  Despite the fact that the U.S. national debt is on pace to approximately double during his eight years in the White House, he has just proposed a budget that would take government spending to crazy new heights.  When Barack Obama took the oath of office, the U.S. national debt was 10.6 trillion dollars.  Today, it has surpassed the 18 trillion dollar mark.  And even though we are being told that “deficits are going down”, the truth is that the U.S. national debt increased by more than a trillion dollars in fiscal 2014.  But that isn’t good enough for Obama.  He says that we need to come out of this period of “mindless austerity” and steal money from our children and our grandchildren even faster.  In addition, Obama wants to raise taxes again.  His budget calls for 2 trillion dollars in tax increases over the next decade.  He always touts these tax increases as “tax hikes on the rich”, but somehow they almost always seem to end up hitting the middle class too.  But whether or not Congress ever adopts Obama’s new budget is not really the issue.  The reality of the matter is that the “tax and spend Democrats” and the “tax and spend Republicans” are both responsible for getting us into this mess.  Future generations of Americans are already facing the largest mountain of debt in the history of the planet, and both parties want to make this mountain of debt even higher.  The only disagreement is about how fast it should happen.  It is a national disgrace, but most Americans have come to accept this as “normal”.  If our children and our grandchildren get the opportunity, they will curse us for what we have done to them.

All debt destroys.

All debt enslaves.

And when you are talking about an 18 trillion dollar debt, you are talking about an amount of money that is almost unimaginable.

If our national debt was reduced to a stack of one dollar bills, it would circle our planet at the equator 45 times.

How could we have done such a thing?

Thomas Jefferson once said that “the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”  He correctly understood that government debt is stealing.  We are financially raping our children, our grandchildren and all future generations of Americans.  It is an incredibly wicked thing to do.

But instead of men like Thomas Jefferson running our country, we have men like Barack Obama running it.

And to Barack Obama, running up a trillion dollars of debt a year is “mindless austerity”…

“I want to work with Congress to replace mindless austerity with smart investments that strengthen America,” Obama said in a speech at the Department of Homeland Security. “I’m not going to accept a budget that locks in sequestration going forward. It would be bad for our security, and bad for our growth.”

Yes, if we steal money from future generations it will artificially inflate our current standard of living and make our economy look temporarily better than it should be.

But it is morally wrong to do this, and our current crop of politicians have no intentions of ever bringing the debt party to an end.

Even with the ridiculously optimistic economic assumptions that are used in Obama’s new budget, the federal budget is never projected to balance within the next decade.  Instead, Obama’s budget projects that the national debt will rise from 18.1 trillion dollars right now to 26.2 trillion dollars in 2025.

Of course it would greatly help if the federal government actually spent our money wisely.  But instead, the feds often waste our hard-earned tax dollars in some of the most bizarre ways imaginable.  The following is just one example…

The U.S. federal government has prompted controversy after spending over $33,000 on a study to find out whether same-sex couples live closer to tobacco shops than heterosexuals.

The large sum was spent on a study by the National Institutes of Health entitled, ‘Relationship Between Tobacco Retailer Density and Sexual Minority Couples.’

Thanks to this kind of insane spending, our debt is completely and totally out of control.

While Barack Obama has been in the White House, the U.S. national debt has increased by $84,266 per full-time private sector worker.  Anyone that believes that this kind of debt accumulation is sustainable is absolutely delusional.

The only reason why our house of cards has not completely collapsed already is because the rest of the world has been willing to lend us gigantic piles of money at artificially low interest rates.

In December, the average rate of interest on the government’s marketable debt was 2.013 percent.  But in the past, interest rates have been much higher than that.  For example, in January 2000 the average rate of interest on the government’s marketable debt was 6.620 percent.  If we returned to that level today, we would be paying well over a trillion dollars a year just in interest on the national debt.

And the issue isn’t just the more than one trillion dollars in new debt that we are accumulating every 12 months.

As I have discussed previously, the U.S. government has more than seven trillion dollars of debt that must be “rolled over” each year.  In other words, the federal government must issue more than seven trillion dollars of new debt just to pay off old debts that are coming due.

If something were to happen which would cause the rest of the planet to either be unwilling or unable to lend us trillions of dollars at ridiculously low interest rates all of a sudden, the game would be over.

We were handed the keys to the greatest and most prosperous economy in the history of the planet, and our greed has totally wrecked it.

We were wealthy beyond imagination, but that was never good enough for us.  We always had to have more.

And now we are hurtling toward financial oblivion, and we have a man in the White House that wants us to go into debt even faster.

 

All Of This Whining About The Fiscal Cliff Is Pathetic

The fiscal cliff is coming!  Run for the hills!  There have been endless stories in the mainstream media about the “fiscal cliff” that our country is facing if the Democrats and the Republicans can’t come to some sort of an agreement.  If there is no agreement, taxes will go up and government spending will be reduced by a very small amount.  And yes, that would likely push the U.S. economy into another recession, although there are many that would argue that we are already in a recession right now.  In any event, there is a tremendous amount of distress out there about the fact that something might interrupt the debt-fueled prosperity that we have all been enjoying.  You can almost hear them now: “No! Please don’t cut government spending! Please don’t raise taxes! Please keep stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day so that we can continue this economic illusion that feels so very good.”  The American people want the government to give everything to everybody, but they definitely do not want to pay for it.  They want a big government that showers them with government checks and government benefits, but they don’t want to cough up the ridiculous amount of money that it would take to fund such a government.  So we just keep ripping off our kids and our grandkids.  What we are doing to future generations is not just immoral, it is criminal.  If they get the chance, someday they will look back and curse us for destroying their futures and destroying their country.  So why do we continue to do this to them?  Because we are greedy and selfish and we are absolutely desperate to maintain the massively overinflated standard of living that we have been enjoying.  We have lived way above our means for so long that we don’t even know what “normal” is supposed to be anymore.

But nobody can spend far more money than they bring in forever.  At some point an adjustment comes, and our adjustment is going to be exceedingly painful.

Right now, the overwhelming consensus in the United States seems to be that we should put off any economic pain for as long as possible.  The American people don’t want significant cuts to government spending and they don’t want taxes to be raised to pay for the spending that we are already doing.

But if the Republicans and the Democrats don’t agree to a deal soon, we are going to see taxes raised substantially and government spending cut by a little bit.  A recent CBS News article did a good job of describing exactly what this “fiscal cliff” that we are facing actually is…

There are two parts to the so-called fiscal cliff. The first is the scheduled expiration of the tax cuts enacted in 2001 and 2003 under President George W. Bush, the payroll tax holiday enacted under President Obama, and a host of other tax breaks. The second is $1.2 trillion in automatic spending cuts to defense and domestic programs that are looming due to a 2011 deal that resulted from House Republicans’ reluctance to raise the debt limit.

Now, it’s true that if lawmakers fail to work out any sort of deal, there will be severe long-term consequences for the economy: According to the Tax Policy Center, going off the “cliff” would affect 88 percent of U.S. taxpayers, with their taxes rising by an average of $3,500 a year. Many economists, as well as the nonpartisan Congressional Budget Office, say the combination of spending cuts and tax hikes that are set to take effect would tip the economy into a new recession.

Please keep in mind that the “$1.2 trillion in automatic spending cuts” is not for a single year.  When you break it down, the cuts to spending would be somewhere around 100 billion dollars a year.  And a lot of those “cuts” are actually spending increases that would be cancelled.  So those spending cuts would not really put much of a dent in our yearly budget deficits at all.

The tax increases would be more significant.  Middle class families would be paying thousands of dollars more per year in taxes.  These tax increases would raise some more revenue for the federal government, but they would also do significant damage to the economy in the short-term.

Do you know what they call a combination of government spending cuts and tax increases over in Europe?

They call it “austerity”.

Nations like Greece and Spain have tried this.  They cut spending and raised taxes in an attempt to reduce government budget deficits.  What happens is that the spending cuts and the tax increases cause a significant economic slowdown and this causes tax revenues to come in much lower than projected.  So then more spending cuts and tax hikes are necessary in order to try to get closer to balancing the budget.  But then tax revenues fall even more.

In the end, both Greece and Spain still have large budget deficits and yet the economies of both nations are suffering through depression-like conditions.  The unemployment rate in both nations is now over 25 percent.  Just check out this chart right here to see how nightmarish austerity has been for the economies of both Greece and Spain.

So that is why everybody is freaking out about the fiscal cliff.  They don’t want to go down the same road of austerity.  They want to keep living in an economic fantasy land where we can borrow our way to “prosperity”.

But it is all a lie.  The lines at the Apple stores, the crazed consumers on Black Friday, the restaurants teeming full with people and the government that thinks that it can take care of everyone from the cradle to the grave and yet keep taxes low.  It is all a giant lie.

And no, please do not think that I am in favor of raising taxes.  I most definitely am not.  I believe that the government brings in more than enough money already.

Personally, I believe that we could have a system that completely eliminates income taxes and that funds the government through tariffs and various other forms of taxation.  It was good enough for the Founding Fathers and it should be good enough for us.  But that is a subject for another article.

Our current system has allowed us to live way beyond our means for an extended period of time, but it is only a matter of time until it all comes crashing down.

In fact, the game is already over.  We have already destroyed the future.  At this point it is only a matter of how long we can keep kicking the can down the road and putting off the pain.

Sadly, what we have done on a national level is simply a reflection of our “buy now, pay later” society.  We have become a nation that is constantly willing to sacrifice the future in order to make the present more pleasant.

Just check out this video.  We have become addicted to a prosperity that we cannot possibly pay for.  But as long as someone will keep lending us the money we will continue to enjoy it.

As I have mentioned previously, the government has spent about 11 dollars for every 7 dollars of revenue that it has actually brought in while Barack Obama has been president.

We print, borrow and spend without giving any thought to what we are doing to the future of this country.  We are shredding confidence in our currency and we are wrecking the greatest economic machine that the world has ever seen.

And all of our politicians and all of our “leaders” prance about as if they are the smartest generation of Americans ever, and they think that they are an “example” for the rest of the world, but if our Founding Fathers were around today they would be absolutely horrified about what they have done to the country that they built.

If you think that the economy is bad now, you just wait.

We are still in the “economic fantasy land” phase where we are enjoying a massively inflated standard of living constructed on a mountain of borrowed fiat currency.  Our economy is being held up by trillions of borrowed dollars, and all of that money makes the U.S. economy appear to be far more prosperous than it actually should be.

When we have to start living closer to what our real standard of living should be things are going to get really bad.

Most Americans simply don’t understand that if the federal government went to a balanced budget tomorrow it would instantly plunge the U.S. economy into a depression.

Just look at Greece and Spain.  The same thing is going to happen to us one way or another.

So enjoy this false prosperity while you still can.  This is about as good as things are going to get, and from here on out it is downhill for America.

Taxed Into Oblivion

In the United States today, we are being taxed into oblivion, yet it is being done so stealthily that most Americans don’t even realize what is happening.  Most people are fixated on federal income tax rates, but the federal income tax is only one of the dozens of different taxes that each of us pay each year.  The politicians have learned that people get really upset when income tax rates are raised, so they have found hundreds of other ways to raise taxes on us.  What most taxpayers in the United States today are facing is “death by a thousand cuts”.  When you add up all forms of taxation from all levels of government, approximately 40 percent of all the income in the country is taken in as taxes by government.  Large numbers of Americans end up paying well over 50 percent of their income in taxes, and many of them don’t even realize that it is happening.  We truly are being taxed into oblivion, and yet the politicians just keep coming back for more.

On all levels, government just keeps growing, and all of this government has got to be paid for somehow.  Politicians have become masters at finding ways to tax us so that we won’t even feel it.  They have an endless hunger to spend more money, and they depend on us to feed that addiction.  Today, the combination of federal government spending, state government spending and local government spending now accounts for a larger share of U.S. GDP than at any other time in our history.

Yes, federal income tax rates were significantly higher 30 or 40 years ago.  But virtually every other tax you can think of has gone way up since then or did not exist back then.

Federal income taxes definitely still hurt, but the reality is that where we really get hit is in all of the other taxes that we pay.  American families pay Social Security taxes, Medicare taxes, state income taxes, sales taxes, property taxes, death taxes, various excise taxes, gasoline taxes, tire taxes, utility taxes, liquor taxes, telephone taxes and cigarette taxes just to name a few.  The truth is that there are dozens and dozens of different taxes that most Americans pay each year, and there are a whole bunch of others that get passed on to us through businesses that we deal with.

Speaking of cigarette taxes, there is legislation in Congress right now that would send taxes on tobacco products absolutely skyrocketing yet again.

I don’t smoke and I never will smoke, but I find the attack on smokers by our politicians to be seriously offensive.  If smoking is legal, then leave them alone.  Don’t tax them into oblivion just because you don’t like what they are doing.

An excerpt from S. 1403 (The IDEA Full Funding Act) is posted below.  You will notice that a portion of this legislation even refers to itself as the “Saving Lives by Lowering Tobacco Use Act”.  They are openly admitting that they want to make tobacco so expensive that people cannot afford to use it….

SEC. 3. TOBACCO TAX INCREASE AND PARITY.

(a) Short Title- This section may be cited as the ‘Saving Lives by Lowering Tobacco Use Act’.

(b) Increase in Excise Tax on Small Cigars and Cigarettes-

(1) SMALL CIGARS- Section 5701(a)(1) of the Internal Revenue Code of 1986 is amended by striking ‘$50.33’ and inserting ‘$100.50’.

(2) CIGARETTES- Section 5701(b) of such Code is amended–

(A) by striking ‘$50.33’ in paragraph (1) and inserting ‘$100.50’, and

(B) by striking ‘$105.69’ in paragraph (2) and inserting ‘$211.04’.

(c) Tax Parity for Pipe Tobacco and Roll-Your-Own Tobacco-

(1) PIPE TOBACCO- Section 5701(f) of the Internal Revenue Code of 1986 is amended by striking ‘$2.8311 cents’ and inserting ‘$49.55’.

(2) ROLL-YOUR-OWN TOBACCO- Section 5701(g) of such Code is amended by striking ‘$24.78’ and inserting ‘$49.55’.

(d) Clarification of Definition of Small Cigars- Paragraphs (1) and (2) of section 5701(a) of the Internal Revenue Code of 1986 are each amended by striking ‘three pounds per thousand’ and inserting ‘four and one-half pounds per thousand’.

(e) Clarification of Definition of Cigarette- Paragraph (2) of section 5702(b) of the Internal Revenue Code of 1986 is amended by inserting before the final period the following: ‘, which includes any roll for smoking containing tobacco that weighs no more than four and a half pounds per thousand, unless it is wrapped in whole tobacco leaf and does not have a cellulose acetate or other cigarette-style filter’.

(f) Tax Parity for Smokeless Tobacco-

(1) IN GENERAL- Section 5701(e) of the Internal Revenue Code of 1986 is amended–

(A) in paragraph (1), by striking ‘$1.51’ and inserting ‘$26.79’;

(B) in paragraph (2), by striking ‘50.33 cents’ and inserting ‘$10.72’; and

(C) by adding at the end the following:

‘(3) SMOKELESS TOBACCO SOLD IN DISCRETE SINGLE-USE UNITS- On discrete single-use units, $100.50 per each 1,000 single-use units.’.

You can view the full text of this legislation right here.  Please notice that some of the tax increases are absolutely mind blowing.  For example, the tax rate on pipe tobacco is going from 2.8311 cents to $49.55.

Now that is a tax increase you can really sink your teeth into.

We are seeing “quiet” tax increases like this happen on every level of government all over the United States.

Of course I haven’t even mentioned all of the fines and fees and “registration” charges that state and local governments are hitting us with.

Have you gone to renew your car registration lately?  In some states (such as California) the fees have gotten absolutely ridiculous.

Speaking of California, it looks like they are getting ready to target cellphone users once again.

According to USA Today, California is getting ready to seriously jack up the fines for talking on a cellphone while driving….

The state Senate has sent a bill to Gov. Edmund G. Brown Jr. raising the basic fine for a first automotive offense from $20 to $50, the Sacramento Bee reports. For subsequent offenses, the fine would rise from $50 to $100. That’s not the worst of it: by the time state and local assessments are added on, the total for a first offense rises to between $208 to $328. For additional tickets, make that $328 to $528.

Yes, talking on a cellphone while driving is dangerous.  But hitting people with tickets of $300, $400 or even $500 is not about safety.  It is all about revenue generation.

Right now we are seeing an epidemic of speed traps all over the country.  State and local governments are desperate for money, and they see speeders as an easy source of revenue. You can read more about this phenomenon right here.

Speaking of “revenue”, that seems to have become Barack Obama’s new favorite word lately.  He seems absolutely obsessed with raising more money for the federal government.  The Obamacare law was absolutely packed to the gills with new taxes, but now he wants even more.

Yes, it is true that the wealthy are getting away with murder under our current tax system.  I find it highly offensive that many people that make millions of dollars each year are able to find ways to pay much, much smaller percentages of their incomes in taxes than I do.

But raising tax rates isn’t going to solve the problem.  Those that are masters at avoiding taxes are going to continue to do so.  Meanwhile, middle class Americans and small businesses will continue to get bled to death.

Our current tax system is fundamentally broken and needs to be completely thrown out and replaced.

However, no system is going to work until the federal government gets a handle on its spending addiction.

In the past couple of years, spending by the federal government as a share of GDP has been the highest that it has been since World War II.

You would think that there should be plenty of fat to trim, but as the recent debt ceiling deal clearly demonstrated, our politicians do not intend to significantly reduce government spending.

They are just going to keep borrowing, spending and finding more ways to tax us.

All of this nonsense in Washington D.C. is part of the reason why Americans are so displeased with Congress at this point.  According to Gallup, 84 percent of Americans now disapprove of the way Congress is doing its job, which is a brand new all-time high.

The truth is that sending more money to Washington D.C. is not going to “fix” things.

The federal government has multiplied in size over the past several decades, and yet the number of poor people just continues to increase.

Giving the poor more handouts may ease their suffering for a little while, but it is not the solution to their problems.  What they really need are good jobs, but our politicians have very busy setting up unfair trade agreements that allow millions of our jobs to be shipped overseas, and they continue to suffocate businesses in this country with mountains of ridiculous regulations.

No, the people that truly benefit when more money flows to the federal government are the fatcats that live and work around Washington D.C.

The past few decades have been a bonanza for government contractors, lobbyists and lawyers in the D.C. area.

According to the Washington Post, those living in the Washington D.C. metropolitan area now have a higher median household income than anyone else in the country….

Washingtonians now enjoy the highest median household income of any metropolitan area in the country, and five of the top 10 jurisdictions in America — Loudoun, Howard and Fairfax counties, and Falls Church and Fairfax City — are here, census data shows.

The signs of that wealth are on display all over, from the string of luxury boutiques such as Gucci and Tory Burch opening at Tysons Galleria to the $15 cocktails served over artisanal ice at the W Hotel in the District to the ever-larger houses rising off River Road in Potomac.

There is a ton of money in the D.C. area.  I know.  I used to work there.  Approximately one third of the GDP of the region comes from spending by the federal government.  Even during this recent economic downturn, the Washington D.C. region continues to do really, really well.

So, no, raising taxes is not going to fix what ails us.  It would just feed the monster that we have created in Washington.

We are already being taxed into oblivion.  Middle class America can’t take much more of this.

We need to change our entire approach to taxation in this country, because right now our tax system is fundamentally unfair and it is not working.

So what do all of you think about our tax system?  Please feel free to post a comment with your opinion below….