After a few days reflection, I guess that's how I feel about the 'deal' reached by Congress to avoid the fiscal cliff. Although, you can only really use the term 'deal' in the same manner that your doctor tells you 'this won't hurt if you just bend over and relax'.
Truthfully...even as a tea party wannabe libertarian, I'm not mad at the Republicans for agreeing to increase taxes on folks making more than 400K(single)/450K(married). Heck...I wouldn't have been mad at them for increasing taxes on people making greater than 200K, or even 100K. Finally...I would go out on a limb and say I wouldn't care about them increasing the tax rate on every American out there, IF...IF they had made spending cuts equal to the tax increases.
I've said before that this hole is too big to fix through spending cuts alone. It's also too big to fix from jacking up tax rates on 'the rich'...or all Americans. It's going to take a combination of spending cuts and tax increases, maybe even something outside the box like a national sales tax, to make progress. And yeah...it's going to be painful...for everyone. There is no way around it. We, as Americans, let it happen, often times cheering when the money was directed to things that WE approved of, while cursing the 'other guy' the next Legislative district over.
In the end, we didn't avoid the 'fiscal cliff', Congress just put the car in neutral so we are coasting towards two months down the road. We got some tax increases, but no real cuts...and the increases don't do anything to stop the debt problem. I've seen that they are projecting somewhere around 600 Billion in new tax revenue, over a 10 year period. That number sounds huge....but in reality, if we had that $600 Billion RIGHT NOW, it would still only decrease the amount of new debt, for this year alone, but 50%. It would do nothing to effect the balance of our outstanding debt.
Maybe, this is for the best. With this 'solution' allowing for tax increases, perhaps when the new Congress struggles to find someway to kick this problem further down the road in a few months, some automatic spending cuts can kick in, and we'll actually see the debt numbers go down...
No, no no no NO! We pay plenty enough tax already. We are already looking at GENERATIONS of repayment, no matter what happens to the tax situation. New taxes will only serve to prolong the time required to repay all this crap, by increasing the time required to have an economy CAPABLE of repaying all this crap. I enjoy your blog, but for pete's sake, does EVERYONE sip the KoolAid on occasion? You seem to have a very good grasp on the state of affairs in this wonderful country of ours; it surprised me to see you say "more tax!"
ReplyDeleteI guess my problem is that I don't see us HAVING generations to pay it back. I think we need to make some kind of immediate progress against the debt, and to do that, we will need more tax revenue. I'm also somewhat pessiimistic about the long term health of the economy even without the stresses of new taxes.
ReplyDeleteWhat would make me REALLY happy is seeing the Republicans pass some kind of resolution(non-binding of course, but at least DO something) saying they are okay with any tax increases that are matched by an equal amount of spending cuts.
I'll tell you the one increase in this whole 'deal' I'm not happy with, and that was the OASID tax rate going up...specically because I am soon to be in my late 30's, and I know that I am never going to see that extra 2% come back to me. I'd much rather keep getting it myself to invest than flushing it down the broken social security toilet.
P.S....glad you enjoy swinging by, sorry if my attitude on this leaves a sour taste in your mouth. I just think the increasing debt is the biggest threat this country faces, and would love to see REAL progress on it sometime in my life...
ReplyDeleteNo Sir, no bad taste, I just think the math is incontrovertible. Even if you cut spending by 50%, the $16T IS MORE MONEY THAN CURRENTLY EXISTS ON THE FACE OF THE EARTH. Combined with the dead solid fact that taxes slow growth, ANY tax increase WILL delay the repayment of that debt. The tax increases just put in place will raise, what, $330B over 10 years, according to the CBO? Remember, to raise tax revenues, we should increase the number of people actually PAYING the tax, and increase the amount they make & pay tax on. Tax increases always, every single time, decrease the revenue collected from that tax. Oh yeah, you think the rich will actually PAY the effing FG? Why would they do that when they can give it to charity, or otherwise loop-hole it?
ReplyDeleteWell, see, when I am in charge, we'll get a flat tax with no loopholes. I am with you on getting MORE people to pay taxes. I have a brother-in-law....4 kids, he works construction sometimes. He's a good guy but I'm getting tired of hearing his hippy common law wife talk about how they come out with a positive income tax balance because of all the child tax credits he gets. NO ONE should pay nothing...
ReplyDeleteYou get my vote! Thanks again for your blog.
ReplyDelete