In the course of the lengthy discussion regarding the national debt and deficits I couldn’t help but wonder if we all understood the accepted definitions of terms. In so many cases the same terms were used in different contexts.
For example; the term “budget cuts”? For you and me, a cut to my budget is spending less in the next cycle than I did in the current cycle. For the government cutting the budget is not spending less, it’s cutting the rate of growth of government spending. You and I would spend less, they would spend more, but supposedly decrease the year over year rate of growth. Where did they learn their math?
How about “tax reform”? Is “tax reform” raising rates or changing structure? Republicans tried to focus on cutting spending to reduce current deficits while Democrats wanted to incorporate “tax reform” into the debate to achieve the desired outcome. They seem to think that if a guy can afford a jet he isn’t paying enough tax. According to Democrats, balancing the budget must include both cuts in spending and tax reform. I could go along with that if “reform” meant addressing the tax code in total rather than just raising the rates higher on the folks who are already paying the lion’s share of the taxes already.
In a perverted way, I’ve been amused about the characterization by the “left” that the country is being screwed by the nation’s high earners because they aren’t paying their fair share of taxes; yet according to the Congressional Budget Office 51% of Americans pay no Federal Income Taxes at all. That is Zero Federal Income Tax paid by 51% of Americans but according to the Democrats in Congress, they’re over taxed.
While the top 5% of American earners pay 40% of the Federal Income Tax collected and the top 15% of American earners pay 75% of the Federal Income Tax but according to Democrats in Congress they aren’t paying their fair share. What am I missing? One side pays no tax but is over taxed and the other side pays all the tax but is not paying their fair share.
I think most Americans agree the Tax Code is too complex to be fair. And “fair” is variable that moves back and forth depending on your personal interests. I suspect that if we were given a choice of keeping the current federal income tax system or dumping it all for a flat tax of maybe 8%, most Americans would opt for a flat tax that treats everyone the same. If you earn $100,000 you pay $8,000; if you earn a million bucks you would pay $80,000 and if you earned $25,000 you would pay $2,000. Everyone would pay based upon what they earned (at the same rate). Everyone pays the same rate but based upon their earnings they pay more or less. That sounds like tax reform.
And finally, this agreement between the parties regarding raising the debt limit; the Democrats didn’t get tax increases, but the Republicans didn’t get any meaningful cuts and the President got an agreement to increase the national debt by 20% over the next 18 months. That is another increase of the debt from $14.2 Trillion to $16.4 trillion by election day in 2012. Then factor in the 12 person committee that will either cut a trillion or so in government spending or cut the Defense budget by another $800 Billion. How could Republicans view any of this as a victory? As far as I can tell, this was another huge giveaway to the Democrats. I am baffled how we let this happen.
No Loss for Words
Only in Government is Cutting Spending Increasing Spending
by Steve DanaIn the course of the lengthy discussion regarding the national debt and deficits I couldn’t help but wonder if we all understood the accepted definitions of terms. In so many cases the same terms were used in different contexts.
For example; the term “budget cuts”? For you and me, a cut to my budget is spending less in the next cycle than I did in the current cycle. For the government cutting the budget is not spending less, it’s cutting the rate of growth of government spending. You and I would spend less, they would spend more, but supposedly decrease the year over year rate of growth. Where did they learn their math?
How about “tax reform”? Is “tax reform” raising rates or changing structure? Republicans tried to focus on cutting spending to reduce current deficits while Democrats wanted to incorporate “tax reform” into the debate to achieve the desired outcome. They seem to think that if a guy can afford a jet he isn’t paying enough tax. According to Democrats, balancing the budget must include both cuts in spending and tax reform. I could go along with that if “reform” meant addressing the tax code in total rather than just raising the rates higher on the folks who are already paying the lion’s share of the taxes already.
In a perverted way, I’ve been amused about the characterization by the “left” that the country is being screwed by the nation’s high earners because they aren’t paying their fair share of taxes; yet according to the Congressional Budget Office 51% of Americans pay no Federal Income Taxes at all. That is Zero Federal Income Tax paid by 51% of Americans but according to the Democrats in Congress, they’re over taxed.
While the top 5% of American earners pay 40% of the Federal Income Tax collected and the top 15% of American earners pay 75% of the Federal Income Tax but according to Democrats in Congress they aren’t paying their fair share. What am I missing? One side pays no tax but is over taxed and the other side pays all the tax but is not paying their fair share.
I think most Americans agree the Tax Code is too complex to be fair. And “fair” is variable that moves back and forth depending on your personal interests. I suspect that if we were given a choice of keeping the current federal income tax system or dumping it all for a flat tax of maybe 8%, most Americans would opt for a flat tax that treats everyone the same. If you earn $100,000 you pay $8,000; if you earn a million bucks you would pay $80,000 and if you earned $25,000 you would pay $2,000. Everyone would pay based upon what they earned (at the same rate). Everyone pays the same rate but based upon their earnings they pay more or less. That sounds like tax reform.
And finally, this agreement between the parties regarding raising the debt limit; the Democrats didn’t get tax increases, but the Republicans didn’t get any meaningful cuts and the President got an agreement to increase the national debt by 20% over the next 18 months. That is another increase of the debt from $14.2 Trillion to $16.4 trillion by election day in 2012. Then factor in the 12 person committee that will either cut a trillion or so in government spending or cut the Defense budget by another $800 Billion. How could Republicans view any of this as a victory? As far as I can tell, this was another huge giveaway to the Democrats. I am baffled how we let this happen.
Posted in Federal Government, Public Budgets | 3 Comments »