Beat the Deficit – Tax The Rich versus Cutting Spending: You Decide

The debate in Washington taking place behind closed doors, in the supercomittee, is one that all Americans should be part of. What happened to Obama’s promise for transparency? Instead of the debate regarding whether to cut spending, raise taxes or impose both on the American People taking place in the open forum called Congress, Congress chose this summer to shirk their responsibilities by agreeing to a short term funding of the National Budget in lieu of ordering (possibly politically destructive) spending cuts.

Congress decided to leave the planning to a ‘supercomittee’. A group of representatives of Republicans and Democrats, etc. are debating behind closed doors the future of US fiscal policy. What a sham.

The House and Senate were elected by the People as representatives. For representatives to elect representatives to do the tough decision making behind closed doors is a blatant disregard for Congress’ responsibilities. These Congressmen and Congresswomen absconded the tough job of cutting programs—many with humanitarian causes, by putting the responsibility on the supercomittee allowing them to be dissatisfied and to comment without taking any responsibility for the outcome. When will our elected officials do what is right for America and make tough decisions without regard for their political survival? What happened to honor, patriotism, and knowing and doing what is right: holding Country over Personal Agenda?

Quite frankly, this is a conversation that Americans need to have. How do we address the $15 Trillion deficit? Every year, now that Obama has upped budget deficits to about $1 trillion per year, Americans need to think long and hard about what programs they are willing to see the Feds cut. Some Americans believe that this $1 trillion annual shortfall can be covered by taxing the ‘rich’ their fair share. The message coming out of Washington makes one believe that this is actually possible. (I will address in a later article how this illusion is mathmatically impossible.)

Unfortunately taxing the rich causes additional stagnation in the economy. The job creators in the private sector are less inclined to grow their businesses when taxes rise and future fiscal policy coming out of Washington is unknown and unpredictable. Let’s see what ya’ll have been saying about this issue in the national forum.

When considering whether to address the deficit by cutting spending, raising taxes or a mixture of both,  Gallup found that,

“Americans’ preferences for deficit reduction clearly favor spending cuts to tax increases, but most Americans favor a mix of the two approaches. Twenty percent favor an approach that relies only on spending cuts and 4% favor an approach that uses tax increases alone.” [Gallup Poll – July 7-10, 2011; www.gallup.com]

What is your opinion?

4 responses

    • Jeff, that’s an interesting article. I also enjoyed your comment.

      You know, that reminded me of a weird fact that effects Multi-national companies like GE. Did you know that companies that make money overseas are taxed at the highest corporate tax rate in the World if they were to bring the profits made overseas back into the United States? I find that to be amazing and incredibly foolish on the part of our Congressmen.

      So for every dollar that GE earns overseas, they are taxed by the local government first. Then, if they wanted to bring some of that profit back to the US Economy and grow plants, or conduct R&D in the US, they would have to take those locally taxed profits and subject them to the US Corporate tax rate–which by the way is the highest in the World.

      Instead of subjecting their profits to this obsurd policy, multi-national companies like GE leave their profits in these other countries for investment abroad. Why tax your income twice if you can simply grow your business in the other country where you initially made your income?

      This tax policy is very growth-adverse and the country would benefit greatly from a change in that section of the tax code.

      A final note, when did profits become bad? Why does the contemporary media and liberal Americans vilify Corporations and profits as if they are a bad thing? It is almost as if they see the certain examples of really foul play (like Enron) to be representative of all of Corporate America–when it is not.

      People falsely associate profits with big Wall Street bonuses and compensation packages. This is an accounting error. Any CPA would tell you that ‘profit’ is the amount of income AFTER compensation and bonuses are paid.

      Profit is used by corporations to grow their business by creating new jobs, growing their business/platform, or conducting research and development, etc.

      Profit is a good thing. In fact, it is a great thing. It is how the private sector creates jobs–plain and simple.

      When you tax corporations more you eat into their profit by making margins tighter. It is harder to make that $1 of profit when taxes go up. Corporations are often forced to increases the cost of their product so that they can continue making profit at a rate promissed to investors (stockholders–basically the American taxpayer) and to continue growing the company so that they remain viably competitive in their respective market.

      Hmm. Great comment Jeff. That one really got me thinking.

      Thanks,
      J

    • When will Obama engage in the Deficit Debate in Congress? Or will he continue trying to push his new ‘Jobs Bill’, which includes massive amounts of spending and pork?

What is your opinion?

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