Taxes, Loopholes, and the National Debt

Posted on January 15, 2013. Filed under: Politics |

The United States of America is in deep debt. Creeping towards $17 Trillion in debt to be exact. The debt ceiling has been shattered, and it will be some time before the government raises the credit card limit to pay for the additional spending that Congress has already agreed to.

Republicans believe that there is a need for entitlement reform. While there is some reform that needs to be done in the “entitlement” area, that’s not where the heart of the problem is.

The President believes that there is not a spending problem. He believes it is a revenue problem, but his calls for additional revenue, even if he got everything he wanted will still fall well short of the what the government is spending. The smoke and mirrors he presents is that he wants $1.62 trillion in additional revenue, but less well known is that the amount he is calling for is spread out across a 10 year period.

Are we spending too much on entitlements? Do we have too little revenue coming in?

During the campaign, the President kept promising that the income taxes on the middle class would not go up a single dime. The key word is “income”. A lot of people discovered in the last couple of weeks that their taxes went up, as the payroll tax expired. Hey, someone needs to pay for grandma’s social security and medicare. Are we spending too much on grandma?

The heart of the problem is a little bit of both. Let’s take a closer look at the so called “fiscal cliff deal” Hidden in that little gem is an additional $47 billion in spending: an unemployment benefits extension ($30 billion), a farm bill extension ($5 billion), it delays sequestration by 2 months ($24 billion), and a “doc fix” to Medicare ($25 billion), however this “doc fix”  is offset elsewhere. I don’t pretend to understand what the doc fix is all about, so I’m not even going to try. In addition, another $12 billion is offset by a Budget Control Act (of 2011) revenue timing shift. Again, I don’t understand the why’s and wherefore’s, but know it generates a small amount of revenue.

When Hurricane Sandy ran over New York and New Jersey, an emergency relief bill came to the floor that had these items tucked away in it:

  • $28 billion for future “disaster-mitigation” projects.
  • $100 million for the repair of all 265 Head Start centers around the country.
  • $8 million (+) to buy cars and equipment for the Homeland Security and Justice departments.
  • $150 million for the National Oceanic and Atmospheric Administration to dole out to fisheries in Alaska.
  • $2 million for the Smithsonian Institution to repair museum roofs in Washington, D.C.
  • $207 million for the VA Manhattan Medical Center.
  • $41 million to fix up eight military bases along the storm’s path, including Guantanamo Bay, Cuba.
  • $4 million for repairs at Kennedy Space Center in Florida.
  • $3.3 million for the Plum Island Animal Disease Center of New York.
  • $1.1 million to repair national cemeteries.

(I got the above list from because he had it so, well, organized. You should check his blog out sometime)

Some of these were necessary, but money to repair all 265 Head Start centers around the country? Were they all hit by hurricanes? $8 million to buy new cars for the Justice Departments and Homeland Security? You know, Budget Car Rentals and other rental agencies sell off their old cars on the cheap.

$150 million for fisheries in Alaska?

This is the crux of the problem. This particular bill was defeated (causing Chris Christie to almost keel over from apoplectic shock), but a stripped down version of the bill was later passed.

However, EVERY bill that is passed has some form of this pork hidden away in it. We need a President who has the balls to veto this legislation and send it back to Congress to clean the pork out of it before it gets signed. Can’t line item veto, so shitcan the whole thing and start over.

This is why the government has a spending problem. It has to stop!

Because if it doesn’t, the government will start searching for more revenue streams, including a national sales tax (or as Queen Nancy Pelosi called it, a Value Added Tax). The rich will only foot the bill for so long before the we start getting trickle down taxes.

Every law has consequences. Your taxes may go up in another way that you aren’t even aware of  yet. Since Obama has pushed so hard for mileage efficiency in our cars, some genius discovered that the amount of money that is being collected from gas taxes has fallen. They figured that out here in Oregon, and are experimenting with black boxes that track your miles driven, and taxes you based on actual miles driven rather than every time you fill up. The Federal government is going to look into that as well. In fact, it could cause the amount you pay to the Federal government to jump as much as 250%!

That cost would also figure into the amount it costs companies to move freight, particularly foodstuffs, and would be reflected in our food costs.

I say that if they are going to put one of those black boxes in our vehicles, then they need to require bicyclists to have them on their bikes as well. If we have to share the road, then they need to pay for it too.

So while Congress continues to spend our money before we have even had the chance to hear it, they make bi-partisan agreements to give tax deductions to NASCAR  and rum producers in the Caribbean.

The Republicans are now saying “no more tax increases”, but they will cave as they always do. It is a problem of leadership. John Boehner is a wimp, and Mitch McConnell is an idiot. He’s the best Kentucky could find?

Of course, the republicans are still not doing a thing about the BILLIONS of dollars that corporations have stuffed away overseas that they haven’t paid any taxes on.

Close some of the damn loopholes. You can get rid of some, like the Carried Interest deduction. You can cap the Mortgage Interest deduction. Make it so that people who only pay $500 into the system don’t get $5000 back. But that would go against redistribution, wouldn’t it? Make it so that American companies can’t just hide cash overseas without paying taxes on it. Don’t give in to their pleas about letting them bring the cash back to our shores without paying anything.

So called entitlements need to be reformed. Welfare, WIC and food stamps are not entitlements. Social Security and Medicare are. What’s the difference? We pay in to the latter funds.

That is a balanced approach, Mr. President, but it would require leadership to bring both sides together, and leadership in Washington is something that is lacking on both sides of the aisle, from the top down. “My way or the highway” is not negotiation, Mr. President.

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