Republicans should embrace the Buffett tax increase proposal – then use it to show how the administration has spent the nation into an abyss of debt that will cripple us for decades.
There are many versions of the oft-quoted adage – be careful what you wish for, you just might get it. They include Oscar Wilde’s, “When the gods wish to punish us they answer our prayers” and Benjamin Franklin’s observation, “If a man could have half his wishes, he would double his troubles.” The Republican Party should heed that advice and fulfill President Obama’s wish – pass the meaningless Buffett tax proposal. After that, they should explain to the American people just what a phony issue this is by posing a simple question – “You have the money Mr. President, now what?”
The forecasted U.S. annual deficit under President Obama’s 2012 budget is a staggering $1.25 trillion, increasing the national debt by a total of $5.6 trillion since January 2009. The so-called Buffet proposal would bring in $1.1 billion in FY 2012 – but only if the filers could not find ways in the massive income tax code to reduce that; remember they, like Buffett, have the best CPAs in the entire universe.
Let’s put that $1.1 billion in perspective against this administration’s reckless borrowing/spending spree. One percent of this year’s $1.25 trillion deficit is $12.5 billion; one-tenth of 1 percent of is $1.25 billion. That’s still more than the $1.1 billion Buffett tax will take in, but it’s close enough for illustrative purposes. Now what, Mr. President, if you get $1.1 billion in new taxes you want so desperately, how are you going to pay for the other 99.9 percent of the money we borrowed just this year?
The total federal budget for FY 2012 is $3.796 trillion and one third of it is borrowed money. Who runs a budget where one dollar out of every three is put on the cuff? Explained another way, there are about 8,760 hours in a year and the federal government is spending $433 million every hour around the clock; unfortunately, $144 million of that hourly spending is borrowed money. The tax will cover the yearly debt for less than 8 hours; that leaves 8,752 hours of borrowing unaccounted and unpaid for.
This is the government version of the Price is Right without the guessing because there are bigger and bigger prizes behind every door. The augments about rate adjustments just serve to hide the fact that that too many politicians are busy protecting the incomprehensible income tax code because it allows them to reward their political friends and punish their political enemies.
America’s current income tax code is so complex it has generated a whole business structure all its own with some returns that are hundreds of pages long. This is not the first time that citizens paying no income taxes or getting money back they never put in are more than willing to tax someone else to pay for it. That’s why the tax rates need to be linked and everyone should to pay something. Do you want to raise taxes? Fine, just don’t forget yourself.
Every interest, and not just the wealthy, has carved themselves out tax-free sanctuaries. If you took the 12 most expensive tax-free benefits away from everyone, the top four being – the local and state income tax deduction, the mortgage interest deduction, tax-deferred retirement savings, and tax-free health insurance – you would still be left with a $250 billion annual deficit.
In government, as in personal life, you cannot out-earn uncontrollable spending.
Marty Richman is a Hollister resident whose column appears Tuesdays.
