First and foremost, it is crucial to point out that the results of the recent mid-term elections of 2010, including the swing of most independents to a conservative bent, were due to an uprising of the people of this country who are fed up with the current tax-and-spend mind-set of our elected officials in Washington. The hard working producers of this country understand that you can’t run a household, or a successful business for that matter, without sound fiscal policy and a balanced budget. They also understand that it is ludicrous to think that you could run our country in a different fashion and they made that very clear at the polls. The American People are looking for true leaders who can balance our current budget, decrease and eliminate unnecessary and wasteful spending, and further reduce the amount of money that the Government confiscates from the working class each year.
In Regards to Extending the Current Tax Rates
Those who are in favor of extending the current tax rates for everyone are basing that position on sound economic policy that serves to both continue to fuel the economy and create jobs. While they understand that the middle class can well use the $3 Trillion that they will keep in their pockets to spend and generate economic growth during these sluggish economic times, they also understand that the small businesses that account for 50% of existing jobs and between 65% - 88% of new jobs in this country (depending on which set of government statistics you look at), can well use the $700 Billion that they will continue to have available to invest in their businesses and hire additional workers as the economy continues on its slow road to recovery. But please, do not expect this extension to create a bunch of jobs either – it isn’t a “cut” as the Democrats would have you believe, but simply an extension of the current rates. Any significant job growth would come only if rates were actually cut, thus freeing up additional capital to businesses over and above what they have available today.
Those who are in favor of extending current tax rates for single earners under $200,000 and families under $250,000, but who are for increasing tax rates on those over $250,000 are quick to point out that leaving the current rates in place for the wealthy will “cost” us $700 Billion over the next 10 years. This argument has 2 glaring deficiencies that need to be addressed very clearly.
The first is that they are calling this a “tax-cut” for the wealthy, when in fact it’s not a cut at all, but simply an extension of the current rates that have been in place for over 7 years. In order for it to “cost” us anything, one has to assume that our elected officials in Washington are already planning to spend an additional $700 Billion over the next 10 years, over and above what they are currently spending – as this revenue is not figured into the current year’s budget.
The second is that if they are so concerned about what extending the current rates for the wealthy is going to “cost” us, where is the concern over what extending the current rates for those under $250,000 is going to “cost” us? Using the same calculation method they use when vilifying the extension of current rates for the wealthy, an extension of the current rates for those under $250,000 will “cost” us $3 Trillion over the next 10 years. That is more than 4 times what they are claiming it will “cost” us to extend current rates for the investors and job creators in this country but you don’t hear any of them complaining about that do you?
In my opinion this issue should be brought to the floor as an individual bill and should face an up or down vote based on its merits alone. If the Democrats want to go on the record as voting for a tax increase on the investors and job producers I say let them.
In regards to the Estate Tax – Most people are under the impression that this tax only affects the very wealthy like Bill Gates or Warren Buffet, but the truth of the matter is that if the current rate of 0% increases to 55% for all assets over $1 Million, it could mean peril for a large number of small businesses and family farms.
The reason is that most small businesses have equipment and buildings and land -- and the estate tax is levied on all those assets. These businesses aren't just sitting on a pile of cash. It might mean that to pay the tax, they're going to have to sell those assets off. So to comply with this tax they may have to actually sell part of their business. The estate tax essentially guts the business that their family has built up over many generations.
Family farms are even more vulnerable in some respects. They too have equipment, buildings and vehicles, but most importantly - they have land and that paints a misleading picture. It looks like you're worth a lot of money on paper, but you're not rich, you don't have money in the bank, all your money is tied up in your business.
When a family member dies, the government wants estate taxes and they want that payment in cash. If you don't have the cash, you have to sell part of your business, you have to sell some of your animals, or you have to sell part of your land, none of which is a good option as we look to small businesses as the key to our economic recovery and future job creation.
Personally, I believe that the current rate of 0% should be extended permanently. This is money that was already taxed when it was earned, property that is taxed each year already, or equipment that was taxed when it was purchased. However, in the spirit of bi-partisanship and a focus on fiscal responsibility, I would reluctantly support the compromise initiative to continue the current rate of 0% on the first $5 Million and an increase of the rate to 35% for any amount over that level.
Extension of Unemployment Benefits
I’ll be honest at the outset and just say that I am against any further continuation of Unemployment Benefits on principal alone. There are too many people who get sucked into the entitlement mentality after a prolonged period on any assistance program. There are many people out there today who are physically able to work and fill existing jobs that choose not to simply because in their mind, it “doesn’t pay enough”. I’ll give you an example of what I’m talking about. My neighbor was laid off and was receiving unemployment benefits of $400 per week. After about a year and a half he got a job making $11.00 per hour. I ran into him about a week later and asked if he’d already gotten a day off. He said no, he had quit the job he just started because it was hard work and it wasn’t worth $40 per week compared to sitting home. You see, he had gotten so used to receiving the unemployment benefits that his new zero base-line had become the amount he received each week in benefits. Unemployment is designed to take the place of income that one would receive if employed, although admittedly at a reduced rate. The way I would have looked at it was that the job gave me a raise from $10 per hour (on unemployment) to $11 per hour – a 10% raise (and hardly anyone is getting a raise in the current economic environment).
With that being said, I am also not totally unsympathetic to the unemployed who are truly busting their humps trying to find a decent job in a very difficult economy. Ultimately, I would be open to passing an extension of benefits with the understanding that the money to pay for it would need to come from reduced spending elsewhere in the federal budget. The Democrats passed a Pay-Go resolution stating that any increased spending would need to be paid for before being added to the budget – now is the time to hold their feet to the fire on this issue. We simply can’t afford any more unfunded spending being added to the deficit. We spend too much money on foreign aid to countries who wish us ill will, as well and hundreds and thousands of dollars on wasteful pork-barrel projects here in our own country to not be able to find things to cut in order to pay for an extension if it truly is that important of an issue. Again, I would call for an up-and-down vote based on the merits and deficit-neutral funding.
2% Reduction of Social Security Withholding
I think there can be no question that President Obama let his desire to regain the approval of the American People get in the way of his liberal tax-and-spend policies and the ridiculousness of it is both glaring and insulting to the majority of the American People.
The first question I have to ask is “What the hell is he thinking?!” This is a program that is completely insolvent, the “trust fund” has been raided year after year and replaced with IOU’s for longer than most people can remember, once again we’re talking about increasing the retirement age due to a lack of funds for the program – and he wants to decrease the revenue stream even further?! Like I said – “What the hell is he thinking?!”
This is an insane idea from the word go and can only be explained by assuming that Obama is seeking out approval and hopes to gain it by jumping on the “tax-cut” band-wagon. The problem is that the Social Security wagon has been creaking along on warped, rusted wheels for a long time and the American people are very well aware of it and are probably asking “What the hell is he thinking?!” themselves.
The other thing they have to be asking themselves is “Is he that ignorant of the economic issues that face our country that he doesn’t even know the disastrous financial situation that the Social Security program is in?!” Or, is it that he thinks that the American People are just too ignorant to know how completely insane this idea is. Either way, this one also calls for an independent up-or-down vote based on the merits of the issue on its own.
Earmarks and Pork-Barrel Spending for Special Interests
Again, based on the message of a desire for reduced taxes and reduced spending that was sent in the 2010 mid-term elections, it is clear that the Democrats are once again ignoring the will of the People as they have already begun to tack things on to the package in the Senate in the form of earmarks for special interest groups. This ranges from ethanol subsidies for rural folks, commuter tax breaks for their cousins in the cities and suburbs and wind and solar grants for the environmentalists - all aimed at winning votes, particularly from reluctant Democrats.
Personally, I think that politicians who continue to follow this practice put their re-election bid in jeopardy.
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