Political candidates seem intent on making the public believe that there is a free lunch, and the number of people who believe them is astonishing. Voters punish candidates who insist on telling the truth about the non-existence of a world with no taxes, and reward liars with the power to ruin them for generations to come.
In fact, the words "tax increase" have such a negative connotation that few candidates dare utter them. In 2002, a popular governor in Alabama lost a bid to balance the state budget by increasing taxes because large numbers of people whose taxes would have decreased were convinced to vote against a tax plan that would have increased taxes for their wealthier brethren. In effect, someone induced these citizens to vote against their own interests.
Both candidates for president want to lower taxes. Obama wants to lower the tax burden on the poorest 80 per cent of American workers by about $900 and raise it on the other 20 per cent. McCain wants to lower taxes too; his plan would shave an average of $200 off most people's tax bill.
While everyone supports lower taxes, almost no one cares to discuss the result of lower taxes-lower government revenues, which result in tough decisions later. McCain's plan, according to a report by the Brookings Institution, ultimately could result in a deficit that completely cancels any economic benefit stemming from increasing the money available for investment. The report estimates the shortfall at $7 trillion (that's a seven followed by 12 zeros) over ten years. Obama's plan would result in a loss of $2.6 trillion.
Why worry about such deficits? The government makes up its shortfalls in revenue in much the same way anyone else makes up the difference when they overspend their budget; it borrows. And like the rest of us, when the government borrows, it pays interest, lots of it.
Think of the federal budget as a pie that lawmakers cut up and pass around every year. The size of every piece determines the size of every other piece. Right now, paying interest on the national debt consumes a little over 14 per cent of the budget. If the deficit grows, the part of the budget dedicated to interest payments also grows. If half of the budget goes to interest payments, every other kind of expenditure will shrink. If we then decrease the overall size of the pie itself, the problems get bigger.
McCain has characterized Obama as a tax-and-spend Democrat who wants to redistribute wealth. The truth is more nearly that Obama wants to redistribute taxing to those who can better afford it. Those who believe that rich people should not carry the burden of paying for government will vote for McCain.
In the end, the tax man cometh. Neither candidate can change that fact of life. The IRS gets its share before you get yours. The important question to ask is "What will the government use the money for?"
No one will give you something for nothing. It's up to you to get what you pay for.
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Comments: 78
Your article is Featured in the Triple Name Club.
Need to grow the economy with business and exports.
For example, lets say that Sally went to Harvard to become a neurosurgeon. She had to take out student loans to pay for her education. Sally will have to work years before she will be able to repay those loans (and mind you, they will be hefty), because she will have to work as an intern, and then as a resident and then hopefully get on somewhere as an attending physician before she will start making any type of money. Prior to that time, she will be making less than you would think a doctor would be making. Now roll forward a few years. Sally has become a world class neurosurgeon and people are clamoring for her services. She donates part of her time working for Doctors without Borders, and makes well over $1 million a year. She also donates to other worthy charities and pays her taxes on time every year.
Are you telling me that it is morally right for her to pay more than her fair share in taxes just because she makes a good living? I don't think so.
I love it when rich people say, "only in America" and then try to get out of supporting the country that made it possible for them to acquire their wealth.
Jesus advocated looking out for the poor and those in need. Maybe he was really crucified for being too socialist with the bread and fishes and healing people without asking for their HMO card.
Anyone who knows the Robinhood story already knows that the money he was taking was not from the rich, it was from the corrupt. The money was stolen from the poor, who were taxed into servitude and poverty by a corrupt ruler who imprisoned them, and who were not the legitemate ruler.
Great article and great points after e article. Some people really do not get how this works and unforunately I don't think they ever will. I doubt that there are very many people here on Gather that really benefitted from the extent of the Bush tax cuts. The people that really benefitted are a bit higher up in the income scale I am sure than most of us here on Gather. Crazy thing is some can say "oh no, you're wrong, I benefitted" when in reality if they take a look at the deficit that has come about in the last eight years they have to realize that sooner or later someone has to "pay the piper" for that deficit. A deficit that did not exist under Clinton. In fact just the opposite was happening then.
If anyone that claims that they did benefit greatly from the Bush tax cuts that it means that they did so much better than the Clinton years I would love to see their proof. Plus if there are a few that can prove it I would love to hear their thoughts on how they feel that because they have benifitted so much in the past, how it is all not going to be taken away from them sometime in the future to clear up that deficit. Or maybe it will be their children that it is taken off of, and sometimes I think their mindset is as long as it isn't them, than so what!
All you realy have to do is take a look at that budget up above and realize that almost haf of the money is going to interest and defense and you should see where the real prblem is. I wonder how much of that 25% represents over payments that were given to the Halliburtons of the world for services that we probably could have gotten cheaper and also probably even better!!
I have another approach, which is outlined in Don’t Pay Taxes This Year - Designate Them!
and will be a key plank in my campaign platform.
John Philipp for President
All people I know of wealth pay $0.00 in taxes after paying in occasions $15,000.00 to their accountant.
Thanks for the information Ann
Now, there is a huge Upper Middle and a Huge Lower Middle, further divided into lower-quartile and middle quartile. The actual middle class has disappeared. That is the problem The rulikng class of elitists are Upper Upper and the UPper Middle Income Earners - which is realloy $150 and $200 and $300 K a year and up.
How many of those are on Gather? Not many. Not me. Not many because they are busy and have other things to do.
But the middle class, say - family of four at $50K - the numbers for this demographic are much smaller than either of the lower-middle quartile - those earning all numbers below $50 for a family of 4 - including less thaan $10K for 4 people - and the huge numbers of people- the many many millions of people who are earning $300K for a family of 4, not counting assets.
The lower income and middle income earners pay a MUCH larger percentage of their supposedly spendable income on taxes, compared to the wealthy.
Yes, Republicans spend more, but the Democrats spend more on useless programs designed to turn us into a socialistic state. Democrats believe Americans are too stupid to spend their money well, so give to the government to waste. Is that a good idea? Vote Republican if you work.
That's news to me.
Gather Broadcasting: Have it your way
This takes you in the back door. If you’ve already been, don’t click again.
http://money.cnn.com/2008/06/11/news/economy/candidates_taxproposals_tpc/index.htm?cnn=yes
What about our socialized military, socialized police departments, socialized fire departments. All these agencies protect us and they are not part of the private domain (except Blackwater of course). Medical care should be the same. The medical system provides a service to keep our citizens safe just like the other agencies that protect us. It should be available to everyone.
Tax the hell out of the rich, it couldn't happen to a crappier group of people.
As our old friend Pogo used th say "We have met the enemy and he is us."
In terms of percentage of income, we are overtaxing the poor. There are many taxes other than "income tax." The wealthy get to pay for lawyers and accountants so they can minimize their taxes. The poor get hit everywhere they look. Yet, it is more fair and useful to tax the wealthy. They are the ones that are getting most benefit from the structure provided by that tax income. A great many of the wealthy get there through inheritance, or at least growing up with the advantages of wealth to give them a leg very far up the ladder. Do you have any idea the discipline and effort it takes to be of the working poor, having to take on several jobs none of which give benefits, all of which pay poorly to do the most obnoxious work that no one wants to do? People struggling, and not even making it, living on the streets or in substandard housing, eating from dwindling food pantries or dumpsters or unhealthy fast and cheap foods, freezing for lack of funds to pay for heat, you get the idea, these people are not really benefiting from the great wealth of this nation. I believe the income tax was created for the Civil War, and subsequently brought back to pay for other wars, then for other programs, and so forth. It was not about thieving. It was because people wanted the programs and Congress wanted their votes. In any case, this is the system we are now living with. Fine, do away with all taxes altogether. Then we can look at other ways to do what we all need and want done as society. Probably we could find much better, more efficient methods. The resources that morally belong to all of us, and even more to the Earth itself, are being stripped, wasted, destroyed for a quick profit. That should be paid back. I don't want profiteers exploiting our resources. Economics needs to include the costs to the Earth, the general resources of those living here, the ability of laborers to maintain a healthy life, the ability of those coming up to get useful and comprehensive educations that they have the skills to do well, etc., and so forth. Maybe we could tax the resources directly, or license their use, for enough money to do away with taxes. There could be waives for use which is shown to be for the general good. People could use for profitable enterprise resources that they have helped to produce, or buy or license their use for fair value.
What utter baloney.
Bush, like Reagan and his father before him, has been spreading corporate communism to rob the poor in favor of the rich. Why don't you object to that???
Correction = we the taxpayers pay interest while the corporate elites such as Bechtel and Halliburton are spending the day counting their untaxed profits.
Dear Lord, we thank you that some Democrat taxed and built our international highway system. Without which our interstate commerce would not have been able to boom, and so many of us would not have been able to become massively wealthy.
And we thank you for the tax and fund manufacturing attitude of the Democrats, who steered the financial might of the nation to bring us the guaranteed government contracts that formed a firm foundation under so many of our corporate bottom lines.
And we especially thank you Lord, for the tax cuts, tax breaks and discounts that Democrats gave us during the entrepenurial boom of the most recent years. Finally, we wealthy could write-off those few thousand dollars that we dump into the misadventures of our corporately incompetent friends, acquaintances and family members.
We beseech thee Oh Lord, to help put a stop to the pinching and leeching of our individual vast wealth. Please let the funding of this country's nation building works rest solely and primarily on monies culled from the meagerest. We ask this in your name, as you did place "them" in the position of suffering, while placing "us" in the positions of comfort and leisure.
And for that we thank you.
Amen
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Good Article, Ann. 10
I am so sick and tired of reading about the "typical" characteristics of evil Republicans, especially since they don't apply to me. I donate over 10% of my gross income every year to local charities, and yet I keep reading that Republicans don't care about people. And for the record, I make less than $75K per year, so I don't consider myself rich. I know many liberal Democrats who make exceedingly more than I do, and yet give perhaps $500 a year to charity. I could go on, but I'm steaming too much at the moment and will type something I would regret later.
Ann - I don't believe that's true. I would willingly pay higher taxes, and I've heard many others say that. But, I'd like taxes to be paid more equitably - the mega-rich should pay a much higher percentage of their income on taxes. The poor should spend much, much lower a percentage. Notice that word "percentage".
Along with that, I would overhaul many areas of government to make them more logical and efficient. There is so much redundancy, and waste.....due to processes, due to unrelated growth over time. No Congressman wants to tackle this - it needs to come from the top. And I believe that Obama and some of his advisors will start to tackle some of these areas where money is being wasted.
Is it right for the rich to pay less than their fair share of taxes? No it is not.
What is the fair share of the rich? Pretty hefty. The rich get police, fire, and other protections for considerably more property than the poor possess. In fact, a small percent of the population (1-2%) has most of the property in the U.S.
Government projects like those the Corps of Engineers works on provide benefits mostly for the property of the rich. Who owns the major companies that get bailed out by the government because they are too big and too important to be allowed to fail. Those protections do not exist for the small businessman.
Whobene fits most from Federal and other givernment spending? The rich own most of the companies which get those grants and contracts. The rich pay the lobbiests and the power brokers who seem to control the government and the rich reaqp a huge reward all out of proportion to the investment in controling the government.
If yo ulive in a poor neighborhood what government services do you get? Hardly enough to live on no matter how desperate your situation. (I have a friend on disability from post polio syndrome and he would probably starve to death if not for his friends. He has a PhD and was fired because his body would not allow his brain to control his hands well enough to continue to work. ) If you are poor the government does almost nothing for you. It serves your landlord but not you.
Therefore, do a good job calculating what it would cost a rich person to get the value of all their services that come from government before you decide what would be their "fair share" of taxes and don't forget that the military protects the rich and powerful and not the poor. The poor are going to be at the bottom of the barrel no matter who is in charge.
There is more than one way to skim our taxes and the best way is to do it egally with the help of the government..called subsidy.
Try living on Social Security...no I don't pay taxes on it but then I do pay for Medicare out of the check as well as the so called drug benefit that the Republicans shoved down our throats...heck I have to beg for help with food to live and struggle to buy my meds as it is even with what little help comes from the drug benefit...
And the Republicans want to cut Medicare benefits and privatize Medicare...guess the rich are not rich enough yet!
:O\
I have no idea if the Bush tax cuts provided any benefit to me. About the same point in time I was forced to take a %55 cut in pay. That hurt still does. Considering that I have not been able to even keep up with inflation and we have two kids in college we are seriously getting whacked. On a side note I fill out FAFSA every year and never get any federal help. According to the numbers provided back to me I can afford to spend %55 of my after tax income on tuitiion. NOT.
One of the tax issues that really chokes me is when Warren Buffet has a lower tax burden than his office administrator. That is just wrong and Warrent Buffet agrees.
You forgot to thank God for the Republican creation of the Great Depression, its creation of the Soviet State, the Cold War, and al-Qaeda.
Ron, that statement from Obama put the lie to his entire program. A couple making less that 50K from SS don't pay taxes now. I know I'm one of them.
That pie chart bothers me some - It shows .78% going to Social Security and 15% going to Mecicare. Both of them are not a part of the federal budget. They are self supporting.
I'm living, in vision, in the day and time when the money we send to the military goes for world community inner peace support.
Congress does, the pres can try to influence decisions, but it seems like a rare president who has been able to make any of their promises 'come true'.
i consider their speechifying a verbal wish list - "This is what I WANT to do, America...."
If this is true, then Harvard grad Sally should be able to reduce her tax burden with write-offs for the charity donations.
My 2 favorite TV shows, when I was a kid, were Robin Hood and Zorro. Zorro also "stole" from the rich (corrupt politicians) and gave to the poor. He was Robin Hood with a Spanish accent. I look upon their endeavors as equivalent to chasing after a thief who just stole your wallet. When you catch up with him, tackle him, and take back your wallet, that isn't stealing from him. It's taking back what is rightfully yours.