The T Word

Our $10 bill with our first Secretary of the Treasury: Alexander Hamilton

Yes, I said the “T” word. Taxes are not a bad thing: they are a necessary thing.  The Congress and the President are finally talking seriously about debt reduction.  Currently, our national debt is 14.357 Trillion dollars, or more than $47,000 per American.  The President is suggesting reducing that amount by 4 trillion dollars over the next ten years.  He suggests doing so with a mix of spending cuts, tax increases, allowing certain tax breaks to expire and closing tax loopholes.  The Republicans are saying “NO” and are only suggesting 2 trillion in spending cuts over ten years.  Sorry folks the math does not add up.  The only way our massive debt will come down is a combination of painful spending cuts and tax increases. This is the reality we live in and must accept.

People want to blame the President for this mess. It’s not his fault.  Others want to blame Bush for this mess, not his fault either.  It is Presidents Regan, Bush I, Clinton, Bush II, Obama, the Congress from 1980 to present and mostly it is our fault.  We the people elect Congress and under Article I of the Constitution they control all taxing and spending. Be it under Republicans or Democrats our desire to have them tell us what we want to hear and then not act in the best interest of the country is explicitly OUR fault.

We can have Social Security, Medicare, and all the programs that government does, fight one, two and even three wars at once and still cut taxes!  Then we can look for Santa Clause and hunt down Big Foot too.  It is time we grow up and understand what the government does isn’t free?  If we want roads, we have to pay for it.  A man on the moon. Need to pay for it.  Clean air, water, safe mines, cancer research, health care for the poor, disabled and old – got to pay for it. 

It is time now to stop using our collective credit card and start paying the bills.  The only way to do that is cut spending and increase taxes.  Both Republicans and Democrats need to stop shouting at each other on the 24-hour “news” programs, stop listening to the wack-jobs of the Left and the Right and get to business. 

We need to have a real national discussion on what we want from our government and what can be cut. Polls show that American want spending cuts, but when they start asking about specific programs, they say I want that.  Guess what?  You can’t have it all and certainly not for free. 

John Adams famously said “Facts are stubborn things.”  Here are the facts:

The Public Debt Since 1980

1980: 930 Billion – Regan elected

1984: 1.662 Trillion – Regan –reelected (+732 Billion)

1988: 2.602 Trillion – Bush I elected (+940 Billion)

1992: 4.064 Trillion – Clinton elected (+1.462 Trillion)

1996: 5.224 Trillion – Clinton reelected (+1.16 Trillion)

2000: 5.674 Trillion – Bush II elected (+450 Billion)

2004: 7.379 Trillion – Bush II reelected (+1.705 Trillion)

2008: 10.024 Trillion – Obama elected (+2.645 Trillion)

20011: 14.357 Trillion (+4.333 Trillion)

Source: The Tax Policy Center

Top Marginal Tax Rate:

1980: 70%

1984: 50%

1988: 28%

1992: 31%

1996: 39.6%

2000: 39.6%

2004: 35%

2008: 35%

20011: 35%

Source: The Tax Policy Center

 A 1% increase top marginal income tax rate would generate 83.9 Billion dollars over 10 years.  A 1% increase on all income brackets would generate $480.4 Billion dollars over 10 years.

Source: Congressional Budget Office

Top Capital Gains Tax:

1980: 28%

1984: 20%

1988: 33%

1992: 28.9%

1996: 29.2%

2000: 21.2%

2004: 16.1%

2008: 15.4%

20011: 15%

Source: Citizens for Tax Justice

A 3% increase of capital gains tax would generate $48.5 Billion.

Source: Congressional Budget Office

Now is the time to get our debt under control and the only way that can be done is both with tax increases and spending cuts.  Tell your elected official.