A few days ago, one of my favorite readers sent me a script of the following video that I have attached below, which I read and was quite interested about.
http://www.youtube.com/watch?v=FAtJaJf1mUI
Its Ben Stein, our favorite professor, clear eyes, and game show host ever squaring off against Laura Ingraham who was filling in for Bill O'Rielly.
I got pissed at both and here's why. Lauara Ingraham, or FoxNews's stance rather, is that spending cuts are the key to lowering the deficit and no tax increases are necessary. In raising taxes, you will stymie economic growth and consumer spending and that it's only in lowering taxes that will get people to spend again and increase economic conditions. Ben Stein goes on a tear at how the statistical data for this is hogwash...no...lets say crap and that those who are preaching this, while they may or may not be correct are simply pulling it out their A$$es. I've personally looked at the statistical and historical data he mentions and he is in fact correct. Moreover, he stresses that while he doesn't want to see taxes raised, he feels its the only way to lower the deficit enough, that budget cuts simply won't be enough. Again, I agree with Ben.
If you follow the stock market at all, you may have noticed that as we pulled out of the financial crisis, many companies increased their reported earnings by slashing costs and expenses, in turn increasing their net income. This was wonderful for a few quarters as analysts saw the belt tightening as the only ray of hope in a dismally clouded world. However, as time passed, this was not enough to protect stock values. At the end of the day, investors wanted to see revenue growth as the catalyst to better bottom lines. The top line shows the health of the business. The same is true for the government. No matter how much they slash, they can't cut enough to save us from an increasing deficit. Over several posts, I've talked about the drain entitlements are on this country. You can't just throw them in the trash overnight, people (the majority being seniors) depend on these services. Additionally, we've also discussed social demographics and how that can effect the economic state. With the baby boomers entering retirement, you are going to see another even larger strain on entitlements and social welfare programs. As a result, the government HAS to increase its revenue. Even if you cut spending and balance the budget today, you still need additional revenue to then pay off most of the...well...um....$14.5 TRILLION in debt and the $114 TRILLION in unfunded liabilities related to entitlements. To increase the top line, the government could sell federal lands and buildings (Yellowstone is overrated), supply arms to growing third world countries (because everyone wanted to play soldier as a kid) or they could RAISE TAXES.
Now I strongly believe that before you can raise taxes on hard working individuals, you have to have a HUGE show of good faith by balancing your budget, by making the tough choices, by sacrificing political ends to do the right things for the nation. This entire blog has been devoted to showing the need for prioritizing and finding a happy budget. The government needs to do this before I'd be happy to contribute a little more for the good of the nation.
On the flip side, what kills me is how everyone in favor of raising taxes thinks they need to target the wealthy. This is where I disagree with Ben Stein.
Per http://www.taxfoundation.org/news/show/250.html "The top-earning 5 percent of taxpayers (AGI over $159,619), however, still paid far more than the bottom 95 percent. The top 5 percent earned 34.7 percent of the nation's adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes." The richest 5% of America may make 34.7% of the wealth but pay almost 60% of the taxes. AND YOU WANT TO TAX THEM MORE? Where goes the incentive of working hard, going to school, saving, entrepreneurship, business ownership? Everyone keeps saying how the rich need to pay more, that tax loopholes need to be closed for big business. Why is no one asking "Why doesn't everyone pay a fair share?"
As Shakespeare's Shylock from The Merchant of Venice notes "If you prick us, do we not bleed?
If you tickle us, do we not laugh? If you poison us,
do we not die? And if you wrong us, shall we not revenge?
If we are like you in the rest, we will resemble you in that." (Yes, I know this is the famous monologue of a persecuted Jew, but stay with me here)
So why is it that 50% pay NOTHING in taxes in this country? http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1 You answer me that and we can talk taxing the rich. Because I contend that these people drive the same roads, go to the same schools, drink the same water, are protected by the same military and actually consume more in entitlement spending. So how is it that nearly 75 MILLION tax returns pay $0. I'm not talking about having more withheld over the year from your paycheck and getting a refund, I'm talking about not being charged a dime. Actually, getting money for nothing. Not a refund, just a check to live.
The wealth gap "fairness" was SUPPOSED to be addressed by make our tax system progressive. That means, you make more, you pay a higher rate, you get taxed at a higher tax bracket. You make less, they take a smaller cut. But you were still supposed to pay SOMETHING. You were still supposed to have skin in the game, be a contributing member of society, a "net positive". But now that's changed. Now almost 50% of taxpayers pay nothing. But we still talk about taxing the "rich" their fair share. They can afford it. I'm not even in that group and I think its a bunch of BS.
You talk to me about THOSE inequities, closing THOSE loopholes and then we can talk about raising taxes my friends.
Sincerely,
Coco
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