Posts Tagged ‘taxes’

Real Debate Over Spending is Needed

March 11, 2009

Today, President Obama signed the $410 billion “Omnibus Spending Bill” which will fund our government for the rest of 2009.  In case you didn’t know (I didn’t until I looked it up) omnibus means that it is multiple budgets and programs all rolled into one big bill.  So, rather than medicare going in as its own item, it is tied with social security, education, and all other government programs.

The big debate today was about the 8,000 or so earmarks that totaled around $8 billion.  Earmarks get a bad rap because they go directly to wasteful pet projects of our representatives.  This money though, had already been allocated and was going to be spent anyway.  The only difference is who was going to spend it – Congressmen or government bureaucrats.

These earmarks are a symptom of the wasteful government spending, not the beginning and end of it.  We need to look at the real problem, which is massive government spending in first place.  We need to be debating the other $402 billion, and the record $1.45 trillion budget deficit for 2009 alone!  Everyone wants to reform earmarks.  Why not get rid of them altogether?

We need to realize that government (not just ours but any) has no source of income.  They need to create it, which comes in the forms of taxes, fees, and tariffs.  These massive budget deficits will either be paid for by raising taxes on us, or on our children and grandchildren.

We need to open up the debate and stop bickering about 2% of the spending of the entire government.  What happened to Obama’s “line by line” speech about the budget?  Do you think he read the 1,100 page spending bill line for line?  In a time when we need to start to save and practice sound economic principles, our leaders are throwing around billions of dollars like it’s nothing.  We’ve become so desensitized to huge, hundred billion dollar figures that we don’t even look at it twice.

We need to start over.   Just scrap the every government program and eliminate all taxes and start from scratch.  Only fund what is truly necessary and efficient, and then tax to only make up that amount.  We would all have more money and better run programs.  We can’t keep reforming and patching up broken government departments.  It’s beyond repair.

We need real debate and new ideas.  We need to open up the arguments that are off-limits in the media.  The debate right now is too narrow and they have us all focused on $8 billion, instead of on the other $402 billion.

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Obama’s Self-Serving Budget

February 26, 2009

I read somewhere once, this theory:

“If you took all the money in the world and gave an equal amount to each person, within a decade, the same people would end up with all the money again.”

Then, today, I read about Obama’s budget proposal, where he wants to increase taxes on people earning more than $100,000 a year, while giving 80% of the population an $800 a year tax break.  I really do not understand Obama and other socialist(or “progressive”) thinkers where $66 a month is going to change things.  It’s mostly a symbolic, self-serving gesture by Obama, where he wants to take from the rich and give to the poor.

The funny thing, though, is that those receiving the $66 (me included) will probably spend the money and not save it.  Then they will have goods they don’t need, but the money will be transferred back to those that own the stores or make the products.  It will go right back into the hands of the wealthy.

How about a real change in the tax policy?  How about we cut taxes across the board by half?  If you make $40,000, you would pay $10,000 in taxes now, but would pay only $5,000 a year if we cut taxes.  What do you think will help more?  Obama’s 800 bucks or five grand in your pocket?

That’s the problem with Obama’s thinking.  Rather than letting us keep more of our hard earned money, he would rather give us a nominal tax cut and call it “change.”

I know, you’re probably saying, “If we cut taxes by half, how will the government make money to fund all our programs?”

This tax cut would have to come with an even bigger spending cut.  In 2007, our government spent about $2.7 trillion and took in about $2.4 trillion in taxes and fees.  So, if we cut taxes in half, you could say we would have about $1.2 trillion to spend.  Our spending on our military empire totals about $600 billion, and social security and medicare costs almost $1.2 trillion.  You can do the math that if we end our empire and bring our troops home, and stop or cut some of the welfare programs, we could easily balance the budget.

The point of this post though, is that Obama’s goals are for his own devices only, and not for the good of the American people.  He says he wants to cut taxes, but the cuts aren’t enough to make a difference.  All he really wants to do is shift the tax burden around, but not really bring any change or hope to the government.  It’s all a sham, and everyone is falling for it, hook, line and sinker.

More Rhetoric From Obama

February 21, 2009

Tonight, I read on CNN.com that President Obama wants to cut the national deficit in half by the end of his first term in 2013.  This is absolute nonsense, and I have no idea why he would even say something like this.  We are in the middle of one of the most massive government spending programs ever, and he has the gall to say he’s going to be able to actually cut the deficit.  When will we stop buying all the garbage that is coming out of his mouth?

There is no chance Obama will be able to even get the deficit back to what it was when he inherited it from Bush!  How are we going to balance it when we can’t even pay for the trillions of dollars we are printing right now?  He says he’ll do it by raising taxes on those making more than $250,000 a year.  Can our President be any more idealistic and naive?  We aren’t paying for all the stimulus and bailouts right now to begin with!  It’s all borrowed money from China!  In order to cut the deficit, you’re going to need to cut spending!

All I know is right now, all of this Hope and Change sucks.  He talks about urgency and needing to act now, and then when the stimulus package is passed, he says we’ll see our extra $13 a week in April!  Like that’s a tax cut in the first place!  And then he brags about how fast the tax cut happened, when it’s still 2 months away!

Then he wants to spend $275 billion more of taxpayer money to help fight off foreclosures for irresponsible borrowers.  Sure, some people might have lost their jobs and are falling behind on their payments who might need some help.  But I just read statistics where even if rates were cut to 2%, forty percent of these people facing foreclosure still wouldn’t be able to make their payments!

If they are going to give taxpayer money away, they should give it to the people who are current on their mortgage and who can make their payments.  Let them pay off their debt or buy a car or a foreclosed home.  Give the money to people who will be able to do something with it!

I cannot believe that there is not more of an outrage at the actions of our government.  I can guarantee you that over half the population disagrees with all of these bailouts, yet our government shows no signs of stopping.  Why should we all just sit back and watch our hard earned money go to pay some stranger’s mortgage?  At what point is enough going to be enough?  I can see now the “change” Obama was talking about.  It’s going to be the revolt of the American Taxpayer kicking his hypocrite butt out of office.

Source:  CNN

Too Much Stimulus Too Late?

February 8, 2009

There’s been a lot of talk this weekend about Obama’s stimulus plan, which is set to be voted on this week by the US Senate.

While Obama was slow to unveil his plan, and now Congress has delayed the passage, we’ve all gone on with our lives.  We might not be making as many big purchases like cars, plasma TVs or ATVs, but we are still getting by.  The standard of living has been adjusted, but it’s not the end of the world.

The question now is if need such a huge package anymore.

Sure, the jobs picture is bad, but will adding jobs building roads in Montana and filling potholes in the middle of nowhere really “stimulate” the economy?  Will out of work people be willing to move and perform manual labor instead of collecting their unemployment checks?  How can we create jobs when we are still supporting these people on extended unemployment benefits?

What we really need right now is more money in the pockets of individuals and businesses.  All of this stimulus is going to be funded by taxpayer dollars in the first place, so why not put the money back in our pockets?  I’m not talking about the nominal $14 a pay period that has been hyped up either.  Why not cut our taxes in half or more?

This will allow business to invest in employees, new equipment, or shore up their balance sheets.  It will allow consumers to make larger purchases, pay off debts, or spend a little on non-essential items.

Instead, we are going to take the tax dollars of those that are still working, to pay someone minimum wage fixing potholes across the country.  The whole package is a trillion dollar “bridge to nowhere.”

If we want to invest in alternative energy, pull that out and make it it’s own bill.  Don’t co-mingle it with all sorts of ill-advised programs.

We need to start questioning the plans of the flawless new President.  Instead of Hope, Change and Progress, this looks a lot more like Desperation and Socialism.  All of these programs will be funded with our tax dollars, whether we like it or not.  This is taxation without representation, and one of the reasons we rebelled from the British.  As Americans we should be outraged, but instead we are placing faith in the new President because he gives fancy speeches.  Personally, I’d like to have that money in my pocket, not in the hands of bureaucrats building their pet projects.

Does Anyone Pay Taxes?

January 30, 2009

I’m starting to think I’m the only sucker out there paying taxes.  If two of Obama’s cabinet picks, who are supposed to be our leaders, don’t pay taxes, does anyone else?  Is it strange that the working class pays their taxes, but these elite individuals end up owing thousands of dollars?

Today, it was announced that Tom Daschle, the appointed Health and Human Services head, paid over $125,000 in back taxes right before he was nominated to the position.

That is a LOT of money for someone to just claim that they “didn’t know they had to pay taxes on it.”  In fact, that’s two years worth of my salary.

It’s amazing to me that I got assessed a $68 penalty last year for my wife underpaying her estimated taxes for her 1099 work (about $3,000), but Daschle was able to get away with not paying $125,000 of taxes from 2005 to 2007.  Tim Geithner, our new head of the IRS, got away with not paying over $30,000 in taxes over 5 years.

Does it look like we need a review of the IRS policies?  Why do I get assessed penalties, and these guys get away with not paying taxes for years?  As taxpayers, we should be pissed about this!  How can our leaders cheat and steal and then expect us to be the ones who uphold the moral values of our country?

It just disgusts me that most of us work hard and play by the rules and struggle to get by, while our leaders feel like they’re above the law.  Wouldn’t you or I go to jail for owing $125,000 in taxes?  Why will Daschle just get a slap on his wrist?  The divide between the rulers and the masses is growing larger every day.  Will we ever push back?  Or will we just keep bending over and taking it?

Source:  Reuters

The Taxpayer Revolt

January 27, 2009

This year is going to be tough on everyone.  To make matters worse, this year, the state of California is going to be issuing IOUs instead of refund checks because they are broke. I rely on the money back from the state to offset the money I owe to the IRS.  You think the IRS will take my California IOU?

I know I shouldn’t be loaning the government money all year and expect a refund.  However, my wife works as a 1099 consultant, and normally, I end up owing about $1,000 to the IRS, so it all evens out.  A friend of mine has an accountant and does the same thing, so I don’t think I’m too far off.

So now, instead of a net zero situation or owing $1,000, I’m going to have to put almost $3,000 out of my pocket to the Federal Government, and hope that my IOU from the state gets fulfilled.  That’s exactly the kind of extra burden I need this year.  Thanks a lot, Arnold.

How many people across the country are in the same situation?  How many other people are strapped for cash and now will have to go further into debt to pay off these unexpected taxes?

An even bigger problem with the whole system is that my taxes are going to fund all these bailouts.  Why should I have to be burdened with thousands of dollars of taxes, when it is going to something I do not believe in?  It’s not just me either.  The majority of the population is against the bailouts, yet we all keep having to pay into the system.

At what point are we going to have enough?  It’s one thing to pay taxes that go to your local school or to a state project where you will see the direct benefit of the taxes.  It’s another when your tax dollars were donated to big banks and no one has any idea of where it went.

A main reason of the American Revolution was “no taxation without representation.”  Could this be any more true in the current environment?  The American Public is saying one thing, but the government is acting on its own.  At what point do we say that enough is enough?

It won’t take a whole lot more government intervention to make the current situation a lot worse.  At what point will the American Taxpayer start to revolt?  When will be our Boston Tea Party?  At this point in time, the last thing we need is the government wasting our tax dollars.  They would be much better served staying in our pockets so we can pay off debts or buy more things to support our economy.

Balancing the California Budget

November 7, 2008

I have no idea how we got so far into this mess, but I do know that there is an $11.7 billion hole in the California budget.  The easy answer is that we spent too much money and didn’t make enough to make it balance  However, $11.7 billion is more than ten percent of the $103 billion state budget, so someone did some serious miscalculating.

Today, our Governator, Arnold Schwarzenegger revealed a plan to raise the sales tax by 1.5% and some other new taxes to raise about $4 billion.  In this same plan, he proposes cuts of around $7 billion to state programs.  Now there is an uproar about how we don’t need new taxes and how it’s going to kill our economy.

While I don’t agree with big government and over-taxation, at least Schwarzenegger has put a plan out there to balance the budget.  The state legislature had months to do this and they just sat there bickering and not working anything out.

On top of all this, the voters just approved almost $3 billion in new debt that will be issued as bonds.  So not only are we not meeting the budget now, but we just added to it!  Somewhere along the line, we need to increase taxes to meet this new spending.

I also believe that if we are going to have taxes, they should be at the state and local level.  At least we know what programs our taxes to go towards in the state.  There might be waste and inefficiency, but at least we know they aren’t going to an entirely different part of the country.  

So while people bitch and moan about a 1.5% sales tax increase and a tax on golf green fees, they should be complaining about all the taxes we pay towards the federal government to fund social security, welfare, medicare, two wars, and farm subsidies.  If those programs were better managed, we would be taxed less by the feds and could afford to pay more to the state.

People are always so serious about curbing spending and balancing the budget, but when push comes to shove, they want to keep spending while lowering taxes.  That doesn’t work for our household budgets, why do we think it will work for the government’s?  While the Governator’s plan might not be perfect, it at least it is the rare example of a politician actually trying to make things work.

In This Case, the States Have it Wrong

November 1, 2008

The basic premise of the Constitution of the United States and the founding fathers was a small central government.

If you think about the conditions at the time, this becomes very obvious.  They were being ruled by an all powerful monarchy that was located thousands of miles away.  The colonies were sending taxes back to Britain, but they had no voice in how they were ruled.  The founding fathers wanted a weak central government and strong states.

The opposite of their vision is true now.  Again, we have a strong central government, that in my case on the West Coast, rules from thousands of miles away.  The politicians are so out of touch anyway, that even if you live in Washington DC, you probably feel they are thousands of miles away too.  We pay up to a third of our earnings to a central government that then distributes it as they see fit.  How do they know what’s best for your state?  Or for the city or town you live in?

The problem is that the states and our representatives in Congress keep ceding more and more power to the exectutive branch.  Many of these powers were supposed to be temporary, but “temporary” and “government” are pretty much an oxymoron.

In recent years, we have given the President the power to use the military without Congressional approval, we have accepted the No Child Left Behind Act that dictates to every school in the nation what to teach, we allow the CIA to spy on us by searching our internet and phone records without a warrant, and with the bailout, we now let the government give out mortgages, insure us, and nationalize banks.

So, after all that background, we now we get to the point of my post:  Many states are talking about abolishing their state income taxes.  Massachusetts has an initiative on the ballot, Rhode Island’s governor is talking about it, and if there is any momentum, California won’t be far behind.

Many, “small government” citizens are embracing the elimination of their state’s income tax.  They argue that it will make their governments more efficient.  If these states can function without a penny of Federal tax dollars, then eliminating the state income tax would be fine.  However, I doubt the states can do this.

To me, the idea of less taxes is the right one, however, the execution of this idea is wrong.  What we should be trying to abolish is the FEDERAL income tax.  We need to stop sending the fruits of our labor to a strong central government.  How do you know that your tax money is going to fund projects in your state or neighborhood?

Sure, taxes are basically “legalized plunder” according to Bastiat, but we should accept paying local and state taxes and abhor our taxes going to the central government.

The states need to be organizing against the Federal Government and the Federal income tax.  Only after that tax has been eliminated, should states start eliminating their own income taxes.

If we eliminated the Federal income tax, we would each have between 15-25% more of our paychecks.  Who knows how much of our tax dollars are wasted anyway, going through all the bureaucracies in Washington.  Then, we could actually increase our state or local taxes by 2-5%, which are more efficient and have better oversight.  We would still have almost 20% more of our income.

This would return more power back to the states, and weaken the control of the Federal government.  If states act hastily and eliminate their major source of income, then they will rely more on funds from the Federal government.  This will create even weaker states and a stronger Washington.  We are playing right into their hands.

So, while eliminating taxes and allowing us to keep more of our earnings is a great concept of liberty and freedom, we need to direct it how the founding fathers would want.  We need to first eliminate the Federal income tax and take our powers back from Washington.  Only after the central government has been weakened, can we start to examine the policies of the states.

To Joe the Plumber…

October 18, 2008

Joe, you asked a great question to Barack Obama when he was campaigning in Ohio, and now you’re an instant celebrity.

However, I regret to inform you, that both McCain and Obama want to tax you.  Instead of asking if Obama will tax you more, you should have asked him why both him and McCain want to take your hard earned money in the first place!

See, this is what’s wrong with the electorate in this country.  The promise of a $1300 a year tax cut, a mere $100 a month is seen as a big issue.  Sure, I could use $100 more a month, but will it really help me get a “leg up” like Obama said?

And why the heck is the Democratic candidate talking about tax cuts in the first place?  Shouldn’t McCain be doing that?  Isn’t that part of the party’s platform?  This is just more proof that the two parties are more or less the same, and as Americans we don’t really have a choice of how our government will be run.

We need to start asking bigger questions.  We are not happy with the status quo.  No one is happy with rising health care costs.  No one is happy with the economic mess we’re in.  No one is happy being taxed to fund all sorts of welfare programs and nation building.

I wish Joe had asked a question like this to Ron Paul, and that the national media had picked up on the response.  Joe and the rest of America needs to know that we don’t have to live with the way things are.  These powers to tax and take the fruits of our labor are not in the Constitution.  And the intent was not to transfer our wealth from one person to another.

So, Joe, it really doesn’t matter who’s going to tax you more.  It matters that they’re still taxing you and you’re too uninformed to question the policies we have in place.

Well, now you know.  So go out and support Ron Paul, a smaller government, lower taxes, and more liberty and freedom.

What the Debate Taught Me

October 16, 2008

Tonight, I managed to watch the third presidential debate live.  I didn’t have to DVR it to watch it later.  This gave me the opportunity to watch it without the bias of reading about it first.

After all the back and forth between Obama and McCain, I realized one thing:  Americans want the Federal Government to do EVERYTHING for them.

There is a sense of entitlement that the government will provide health care, defend them from enemies, create jobs, educate their for their children, provide welfare, and make moral decisions for them.  Of course, all of this comes with lowering taxes.

As Americans, we all agree to the list above.  It is part of our core values.

There is one question we have to ask:  Is the Government the best organization to do this?  I don’t think it is.

How can roughly 700 people in Washington decide what is best for your local elementary school?  How do they decide where to allocate their resources?  Also, since they are spending taxpayer money, they are not going to find the best product for the best price.  If you or I were shopping for health coverage or schooling, we would research and find the best price for whatever fits our needs.  The government has no incentive to do this since they are just spending a pool of money.

So, instead of watching a debate about healthcare and education provided by the Federal Government, we should be debating if the Feds should be involved anyway.  Instead of arguing about a $100 a month tax break, why not argue if the income tax is necessary at all.  Not once did the candidates mention the huge unfunded burdens that Social Security and Medicare are going to become.

I’m not saying that we should abolish the Federal Government.  I just think we need to rethink what it’s role should be.  I also don’t believe in no taxes.  I think that our taxes should be paid locally, and not to a central government.

Imagine, instead of having 6% of your paycheck going to Social Security and Medicare, it could be going to an optional retirement savings account with pre-tax dollars.  Of course, there would need to be a transistion period to help fund those on Social Security, but eventually, the system could be replaced with a much more efficient one.  Your money could be stored in treasury bills or other very safe investments.  Also, since it’s optional, you would be able to stop funding your account if times got tough.

Also, why does part of our income tax go to the Department of Education?  How do politicians and bureaucrats in Washington know what’s best for your local school?  Why not have a tax that goes to schools in your area?  Also, since it will be local, there will be less waste and naturally, more oversight.  I don’t want people sitting there second guessing our local officials, but at least there would be dialogue.  Now, it is a huge Federal department where are schools are just numbers.

Probably the only part of the Federal Government that is really needed is our military.  However, it is not needed in the capacity it is used now.  We need to bring our troops home.  Not just from Iraq, but from all 150 countries they are in.  Part of the troops can be deployed to protect our borders and really make us safer.  Others can be put into reserve status or be retrained for new jobs.  This will save us billions of dollars a year.

While these proposals aren’t really that thought out, it is just a starting point to really think about the role of our government.  Americans have this sense of entitlement for their welfare.  It’s time to take control and start showing some initiative.  We need to use our imaginations and come up with real ideas of change, not just tweak the existing big government mentality we have.

I’m not saying putting these decisions in the hands of local governments will solve all of our problems.  I do think though, that it will help improve efficiency and put our tax dollars to the best use.  Who do you think knows what your community needs more – politicians in Washington?  Or people in your neighborhood?