When I am faced with a problem, I prefer to address it right away. I do not like issues hanging over my head for a prolonged period of time when I know they can be solved quickly and easily. Congress, on the other hand, prefers not to solve problems. Even though our country faces the greatest financial crisis in a generation, Congress voted yet again to spend money we do not have. As we approach the so-called "fiscal cliff", they chose the easy path rather than creating a permanent solution.
If our country went over "the fiscal cliff" most Americans would not be adversely affected. Yes, there would be a small increase at the high end of the tax scale. Most Americans do not earn enough to be affected by the tax increase. The average family income is approximately $51,000 and a single person's income is $27,000. People in these brackets would not be affected by the tax. The tax is aimed at the middle class and is not an unreasonable increase. In fact, the "new" taxes are not a tax increase at all. Rather they are a result of the expiry of the temporary Bush tax cuts.
For those who say going over the "fiscal cliff" would result in large-scale unemployment and an economic collapse I say baloney! A 3 percent increase in taxes will not cause an economic disaster. Yes, some families may have to cut a few luxury items from their budget. They may have to buy a few generic brands instead of name brand products at the grocery store. Unlike Congress, the American public understands that they can't spend more than they make and will trim their family budgets a bit as a result of the tax increase. In my opinion, Americans understand political rhetoric and they know that the "fiscal cliff" was created by politicians to hoodwink the public.
The so-called solution passed this week is just pushing the crisis off for couple of months. Excessive government spending has not been addressed nor will it be. Politicians and bureaucrats will continue to shovel money out the window to fund their pet projects and more unnecessary pork to their constituents. They will continue to meet behind closed doors, as they have in the past, to deliver favors to their benefactors that will ensure their reelection. If the "fiscal cliff" means that 400,000 federal government jobs will be lost, then so be it! Our government has become a monster that devours everything in its path. It feeds on small business and the working class so that our elected officials can dole out financial benefits to their friends and their cronies. The president and Congress are in a battle to destroy the middle class job creators that our nation requires to ensure financial solvency. Most Americans can support themselves if government just gets out of the way and lets them work. Most Americans do not need government handouts to feed their families. With no need for handouts, then there is no need for the current batch of elected officials. For politicians, handouts mean reelection.
The so-called solution to the fiscal cliff is just political spin and hogwash! Spending has not been addressed, nor will it be. The country is heading to bankruptcy faster than greased lightning. The debt ceiling ($16.394 trillion) was reached New Years Eve. The government will use a few tricks to pay their bills for the next month or so, but then the Administration must again go hat in hand to Congress for an increase in the debt ceiling. There will be some bickering and some fist shaking but before the government runs out of money, Congress will increase the debt ceiling and give the president the money he wishes to squander.
Congress should not increase the debt limit. Our elected representatives should draw a line in the sand and should force the government to live within its means. Congress should not be able to spend more money then they collect in taxes. This means the president should create a balanced budget and present it to Congress for approval. If projected tax revenues cannot fund government operations, then government programs and jobs will need to be cut until cash inflows meet or exceed cash outflows. The federal government should live within its means, cut services and downsize or eliminate departments. We the people have to live within our means. If we can do it then the federal government should be forced to do it as well.
The Budget and Accounting Act of 1921 requires that the president submit a budget to Congress by the first Monday in February. It is high time the president got to work on his budget so it can be presented to Congress and the American people by the legal deadline. As always, Congress will reject some of the items in the budget and add in other items that the president did not want. At the end of the budgetary process we will have a plan for the government that starts October 1, 2013 and runs through to September 30, 2014. Large corporations and small businesses will know what their tax burden will be and can prepare their business plans accordingly.
The president and Congress must also stop vilifying the rich. I came to this country as an immigrant because I knew if I worked hard and invested carefully I could succeed. No other country offers their citizens the prosperity that the United States of America provides. By vilifying the rich, Congress is telling people not to succeed! If you do succeed, the government will tax away your earnings and give them to the sloths who choose to sit at home watching Oprah Winfrey on TV rather than working for a living.
If Congress needs to raise capital, then let them raise taxes across the board. The tax burden should be on all Americans not just a select few. Taxing only the rich will result in capital moving overseas. When France increased taxes on the rich to 75%, some of the rich moved to Belgium, a country with far lower taxes. In the past few years, the number of Americans leaving the United States to live in Bermuda and the Bahamas has increased significantly. This trend will continue to increase as long as the government continues to confiscate wealth through excessive taxation.
Instead of tax increases, we need incentives to encourage the middle and upper classes to invest in America. We should reward the rich with tax credits for investing in American businesses, creating jobs, and reducing unemployment. As the unemployed return to the workforce, their payroll taxes will provide strong cash flow to the Treasury. Government can use the increased tax collections to fund operations and pay down the national debt.
Let's put Americans back to work again! As Americans prosper so too will the government. We don't need tax increases. We need jobs. It is time the president and Congress work for the American people instead of confiscating the fruits of our labors through excessive taxation.
© 2013 Gordon Smith - All Rights Reserved