Taxes and fantasy

Why not try it .... couldn't be worse

Facing a future of higher taxes, fewer jobs, higher prices and more bankruptcies doesn’t pose a very bright future. We are told by those to whom we have entrusted our public business there is absolutely no way out of this mess unless we squeeze just a little more from you. They refer to it as the need for “ALL OF US” to sacrifice. It seems to me that we have been sacrificing all along and they simply have managed our sacrifices to suit their own political agenda.

Let’s take a trip to fantasy land.

Rather than tax businesses and corporations more heavily what would happen if we gave them tax credits for contributions to education? What might happen if they lowered the tax on corporations and businesses substantially so that we would once again be able to compete on the world market? Those things would create jobs but wouldn’t buy votes. Would it be a disaster, or hazardous to our health and welfare if we were to simply make deep cuts in /the number of so-called protective agencies? I don’t think it would, rather it would allow us to pursue our own endeavors more economically and produce wealth. Producing wealth would attract investment and as a result pension plans and personal savings would increase proportionally thereby being a “real” stimulus package.

As we continue our fantasy trip we would see the so-called “entitlement” programs evaporating leaving change in our pockets to pay our bills.The problem there is that it would turn hordes of voters away from incumbents and we certainly can’t allow that. There are so many more things that we could do to trim government down to size, Government should be something we can afford and one that provides the space we need to be industrious and productive.

Now back to reality.

There is no doubt whatsoever that the tax bite is going to be increasing dramatically in the months and the years to come. There is no way that the present tax system will produce enough revenue to pay for the promises that have already been made and new sources of revenue are going to be the rule of the day in Washington and in the state houses across the nation.

The income tax is an extremely regressive tax. The greater the tax bite costs and unemployment rises and this results in reduced revenue to government.. Simply put means that government has to increase the tax rate to have the same income from a smaller pocket book. We will not just feel a pinch from higher income taxes but higher costs and new taxes will strangle our economy even more.

Throughout the summer and prior to the November elections, we’re going to see a flurry and a flourish of activity designed to make a lion look like a sheep. We are experiencing that in spades as this article is being written. A nuclear summit hosted by our president in Washington DC including (Britain and Australia excepted) numerous nations around the world is being heralded as a showpiece by the Obama administration to make the point that he is interested in protecting us from harm. I may be wrong but it seems to me that the atomic bomb had a great deal to do with the formation of the United Nations and has been a centerpiece of their rhetoric for all these years. So what’s new?

Earlier on our fantasy trip I referred to reducing regulatory agencies. That is simply not the case in this administration. On the contrary, approximately 140 new agencies will be added to oversee all aspects of the new, so-called, health bill. That’s certainly is not a cut and regulatory agencies but a dramatic increase.

On the subject of taxes we will hear very little until November and after that Lookout. We will see in this nation a VAT (value added tax) which simply translated means a federal sales tax on every item and on many services that you receive. This tax is also referred to as an “ad valorem” tax meaning that each individual that handles a product or service from inception to delivery pays a tax on the added value and that tax is passed along to the consumer. This is a very common tax in many European nations.

We might say that the VAT might be a good idea if they were to eliminate or reduce corporate and individual income taxes however, you know that is very unlikely. We have reached a point in our history where nearly 50% of our population pays no tax and yet receives a refund on unearned income. You need not be an economist nor a scientist to realize that when one half of our population lives on the labor of the other half and the number of non producers is increasing every day, sooner or later we will reach the point of no return.

We all asked the same question, what can we do. I think there is only one thing we can do and that one thing is reality a long shot. We must vote out many incumbents and be very careful who we select to replace them. This is not as easy as it sounds because incumbents are well aware of the fact that those to whom they have granted all of these perks are not going to be happy if they don’t continue to receive them. We already hear those recipients squealing as a few elected officials who have intestinal fortitude indicated these programs must be cut or drastically reduced. At first glance we might say ignore their squealing however, the reality is that most of them vote and the rest of us don’t.

Consider these questions in November and let’s try to take this country back and once again let those who work and produce the wealth make the rules.