Taxable Talk

If I told you that you were going to get hit by a massive tax increase, you would rightly ask, "Why haven't I heard about it on television? Why haven't I read about it in the media?" But it really is coming...just in two years.

Congress passed, by a party-line vote, the Democrat's version of the budget. This budget lays the groundwork for the elimination of the Bush tax cuts. What happens when you eliminate a tax cut? In the Democrats' world, nothing. For you and me, it's a $200 billion tax increase.

I try hard in this blog not to single out one political party. Frankly, they're both quite capable of underhanded ways of budgeting. The Republicans had twelve years of running Congress, and are only now managing to understand the wisdom of being fiscally conservative. Unfortunately, it appears that the Democrats have no idea what that means.

President Bush is threatening to veto any appropriation bill that exceeds the amounts in his budget. I expect he'll be using that veto pen frequently.

As Congressman Paul Ryan (R-WI) stated, "But I’d hardly consider a $200 billion tax hike a 'win' for American workers." It's not. Democrats have claimed that the Bush tax cuts led to the budget deficits. That's not the case; federal government revenues increased by 46% since they were enacted. Unfortunately, spending increased by even more.

We have bloated government, bloated bureaucracies, and a Congress that wants more of the same. I suggest that anyone who cares about this issue—and it's a major one in my opinion—read the Porkbusters website. Join with me in trying to take the pork out of government.

The Presidential election in still 18 months away, but campaigning is in full swing. I haven't decided who I'm going to vote for, but I have decided on one candidate I won't vote for.

Former Senator John Edwards (D-NC) is offering a lot of policy proposals. Unfortunately, when you spend money, you've got to get it from somewhere. Edwards' proposals appear to cost at least $1 Trillion. Edwards is also against continuing the Bush tax cuts, and is for increasing tax rates except for the lower class. Given that most of the income tax paid in the United States comes from the middle and upper class, that means that you and I will be seeing more of our money go for a big bureaucracy should Mr. Edwards be elected President.

Meanwhile, CNN correspondent Jack Cafferty reported that, "John Edwards says he worked for a hedge fund primarily to learn more about financial markets and their relationship to poverty. Do you see any contradiction there?"

I notice that Professor Bainbridge saw the same things that I did. I don't know if he saw the news from Illinois, though.

Governor Blagojevich proposed a huge business tax—a gross receipts tax that would have cost Illinois businesses $7.6 billion. Now, if that tax had passed who do you think would have paid it in the long-run? Consumers, of course; taxes get passed on. As Joe Kristan reported this morning, the tax didn't pass...it was a "missed it by that much" moment: it failed 0 to 107.

If you're a politician, you may want to look at what happened in Illinois and apply it to your next race. Taxes aren't popular. There's a perception that government is bloated, and, imho, there's at least an element of truth in that. Taxpayers want lower taxes and tax simplification. Politicians who want to win elections should take this message to heart.