The car is hurtling forward. We’ve already missed the exit right. The GPS screen is showing the road we are on coming to an end. We continue with the pedal to the metal. Up ahead, we see the barricade before the cliff. Should we barrel on through or slow down?
We are currently, three weeks from the “fiscal cliff” of which the Lame Stream Media is so fond. On 1 January, 2013, the Bush Tax Cuts end and everyone’s taxes go up. Barack Obama and John Boehner are said to be negotiating a solution. The Progressives want higher taxes (when don’t they) on the top 2% of the people. The Conservatives want spending cuts. The Democrats and the Republicans are somewhere in between.Will there be a solution to the problem at hand?
The Progressives demand higher taxes (they call it revenue to sound better) on those making $200,000 to $250,000 or higher. I use a spread for the starting point, because depending on whom is speaking, it varies. If the government taxed all those with a million or more at a rate of 100%, the resulting “revenue” would fund their spending for about two months, give or take. Of course, they could only do this once! At the current rate of spending, the government is on a pace to add $1.8 trillion to the deficit. The current deficit is $16.3 trillion dollars, which is already a crippling our economy. The administration isn’t asking for a 100% tax on millionaires and billionaires though. They demand an increase to 39.6% to those making $250,000 or more. A substantial portion of our small business owners fall into that category. When January arrives, those owners will be faced with the decision to keep the people they have working or pay those higher taxes. They say the only sure thing is death and taxes, so those owners only have one choice.
When New York state raised the state tax rates, many companies moved to states more “tax friendly”. A year ago, Great Britain raised its tax rate to 50%. At the time, the country had 16,000 millionaires. At the end of the year, the nation had 6,000. The rest moved out of Great Britain. The country is now considering lowering the rate to 45%. Will the millionaires flock back? The French earlier this year, raised their tax rate to 75% on the rich. The populations in Belgium and Switzerland have grown, but I doubt that the “revenue” to the French treasury has. In the election this past November, the voters of California chose to, retroactively, raise taxes on the rich in their state. Everyone knows that California has a massive debt problem and this was sold as the way to help make that up. Companies have been leaving California for several years already because of the high tax rates. Do you think that will stop or accelerate?
The Obama administration ha stated their policies are to raise taxes, initiate another stimulus of $50 Billion and eliminate the debt ceiling. This translates to Tax, Spend and Spend! I’m not sure that this would work if the economy was growing at a rate of five to six per cent. Currently, I believe the rate of growth for the country is a sickly 1.2%. The Obama plan would reduce that rate and the resulting gross domestic product.
The moment of truth is upon us. The car speeds forth! The barricade is in sight. Obama’s plan is to speed through the barricade and over the cliff. There is actually only one idea that will result in the car going over the cliff. Unfortunately, no one is speaking of that idea, even though the House of Representatives was elected to hold that line. The answer to the problem is the stop the spending. The government has a SPENDING PROBLEM, not a revenue problem. We certainly don’t need to tax the 2% to punish for success.
marjarhead1 