Wednesday, December 26, 2012

Trying To Translate Waking Thoughts Into An Evening Post

I've been working days while recuperating from injuries sustained when an inattentive driver hit my motorcycle back in October.

This morning I woke up with several topics to post about, but not enough time to write.

Now, in lieu of sleeping so I can get up and go to work in the morning, I'm trying to reconstruct those thoughts.

One of the topics that came to mind was the concept "If you want more of something, subsidize it; if you want less of something, tax it!" and its application today, where we punish success by taxing income, and subsidize unemployment by paying unemployment benefits for nearly 2 years.

The government declared a 'War On Poverty' the year I was born.  40+ years later we seem to have more people living in poverty than we did then!  Given the success of all of the 'wars on a noun' that have been declared, I'm tempted to demand a 'war on Federalism', but I'm pretty sure the government would screw it up royally and we'd actually end up with LESS Federalism...

Another topic has to do with the pending "fiscal cliff" and the rhetoric regarding tax plans.

There are some very important points that are being overlooked or disguised that people need to keep in  mind.

First, no one's tax rates are being cut.  The cuts were made in 2003, setting new tax rates.  Any increases to tax rates on January 1 are not due to temporary rates expiring - they are due to new rates being set.

Second, increasing taxes on people with incomes in excess of a certain dollar amount will not result in more revenue - it will only result in fewer people with incomes in excess of a certain dollar amount.  Those with the money to do so will use the tax code to their own advantage and will find ways to shelter enough income to get below the magic line.  If the increases are severe enough, some people will leave the country.

Third, any spending cuts that occur will not be cuts in actual spending, but rather will be reductions in planned spending increases....instead of spending 100% more in the next year they'll only spend 90% more, so that's a spending cut!

Last, but certainly no least, the country does not have a revenue problem - we have a SPENDING problem.

I've at least committed the thoughts to the ' I can flesh them out as time permits.

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