Free Markets, Free People

Get ready for increased taxes

I’ve noted any number of times that government taxes comprise 14% of the national income and government spending is at 25% of the national income.  That’s as high as its been since WWII I believe.

The point, of course is there are three obvious choices here – cut spending to the income level (and beyond, really, if you plan on paying off debt) or increase taxes to the spending level (and beyond, again, if you plan on paying off the debt) or a combination of both.

Watching this current administration, it appears option two is in the works.  Lots of lip service about “unsustainable” spending, etc., but the only movement I’ve seen is legislation that increases that.  And, also, plans to increase taxes.

The health care bill is chock full of new taxes.  If you don’t believe it, review these two listings of the new taxes to be found in there.

Cap-and-trade, and now “Son of Cap-and-Trade” being sponsored by Senators Lindsey Graham and John Kerry significantly raises taxes on utilities (which means everything will cost more for consumers).

Even the FCC is getting in the act, proposing to helpfully tax the internet – something all governments, state and local, have wanted to do for some time.  Presently 18 states have laws taxing sales on the ‘net.  The feds want to make it 50 (or 57 in Obama’s America) plus a little for Uncle Sugar.  The purported reason for such a tax is to “expand internet access”.  As Kelly Cobb wonders, how in the world do raising taxes and thus the cost of access help expand access.  In answer I offer the one word coda of this administration: redistribution.

The point of this post is to raise awareness that we are too the place where it is critical that the two numbers I’ve cited at the beginning of the post begin to move toward each other, not further away.  It appears to me that the decision has been made by this administration to move the smaller number toward the larger number via taxation.  In other words, your priorities for your income will be secondary to their desire to cover for their inept and inefficient profligacy.  And the profligacy has been committed by both parties.

It is far past time for these people who’ve committed us to this disastrous path to have their priorities reordered.  It is high time that their first priority become cuts in spending to bring that in line with their income.  Until and unless they begin that onerous and necessary job, nothing will change.  The “crisis” they’ve created will remain.  I don’t care who did it, what was “inherited” or why we’re in this shape.  That’s history.  Now is the time to do something about it before it’s too freakin’ late.  And taxing everything that moves isn’t the solution I’m talking about.

This is one of the major reasons the Tea Parties exist, for heaven sake – and any politician who isn’t yet figuring this out deserves to join the unemployment line in November.  Hopefully the anger that is driving the protests won’t abate before November (or after November for that matter) and put people in Congress (and later the White House) who understand and act on the new priority.

Until then, hold on to your wallet, because the taxes are coming and they’re going to be coming hard.

~McQ

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20 Responses to Get ready for increased taxes

  • And this is why the left are clueless about the outcome, and why the American people aren’t in love with Imeme any more (and will be less so when and if the bill hits).  People aren’t buying, the economy isn’t going to improve because folks are justly nervous.  The clueless (read the giveaway left), and the people who have no money to tax in the first place will think this is all a great thing that corrects “immoralities”.  Many of the rest of us are aware that shortly a less of our money will be ours.

  • One thing that will be of interest in the near future will be the level of tax revenues that come with the April filings.  State governments across the country have been plagued with faltering tax revenues but very little noise has been heard from the federal side of the house.  Come April and the realization that the revenues are just not there that you will see a huge push to drive up taxes in order to minimize the effect on the deficit.

  • I guess we’ll find out how close we are to the max in the famous Laffer curve, and which side of it we’re on.

    (For the record, I don’t like the Laffer curve much because it’s a static representation of a dynamic problem, namely how tax revenues change over a span of time when a tax increase/decrease goes into effect which includes how they affect growth and thus how the total tax base changes. But for a first cut simplified model, it will have to do.)

  • Here in Maine we recently increased projections for revenue based on the data coming in.  Hopefully that’s a sign of recovery (and hopefully it spreads).   Ultimately both things will need to happen — spending cuts and tax increases.   There is no way else to rebalance the budget that has any political feasibility.  Don’t rely on “tea party” protests, they’re pretty small and now they’re infighting.   Put aside partisanship and hope that the economy does start to grow.   Even if that’s good for Obama and the Democrats, it would also be good for America.   Then as it does, come up with really strong arguments for spending cuts and restructuring of entitlements.   The Republicans should make sure that  any tax increases also include spending cuts.   Work with the left rather than demonizing them as enemies.   I mean, it’s pretty silly to see adults talking about a major subsection of the country with playground insults.   You need right and left, no side is going to “win” completely, ever.  

    • <blockquote>it’s pretty silly to see adults talking about a major subsection of the country with playground insults</blockquote>
      Shorter Erb: Quit teasing me you bullies!

    • Maine’s Revenue increase – and a shortfall still expected – You tell the truth the way Obama does.
      2 year shortfall…forecast revenue also based on Federal handouts –
       
      “Members of the committee also peppered the revenue forecasting group with questions about why in less than two months there is a significant change in revenue projections.
      Jerome Gerard, chair of the group, said the revenue increases are the result of the economic forecasting commission revising its projections that the economy is doing slightly better than it had projected last fall.
      The fact that revenue forecasting is art as well as science was clear during the deliberations of the panel before it reported to the Appropriations Committee.
      Mike Allen, a member of the panel and research director at Maine Revenue Services, said the models used in making the projections are subject to variables that can’t be quantified.
      Really, for the moment, we have punted in this forecast,” he said.
      AND….
      “The reforecast is not all good news. While the personal income tax is expected to yield an additional $15.4 million over the two-year budget, sales tax revenues are expected to slip further by $30.8 million.
      What is driving the net increase in the projections is the corporate income tax, which is expected to generate $66.2 million more than thought in December’s forecast.”
       
      Your growth is based on TAKING money from people, and they’re already talking about how they expect politico’s will try and spend the additional revenue….heh…..
      Moon Ponies!  Unicorns!  It’s getting better!  You have a serious Kool Aid addiction, I’d get it looked into.

    • Heh, and reading the comments on that article is even more entertaining….

      AUGUSTA, Maine — The state revenue forecasting committee has revised state revenues up by $51 million over two years, reducing the $438 million hole in the state budget.
      ______________________________________________________________________________________________________________________
      But having more resources might cause more problems than are solved as lawmakers scramble to restore funding for various programs slated for reductions in the governor’s budget.
      ______________________________________________________________________________________________________________________
       
      That’s some pretty fuzzy math, I think I can help em’ out with this one…………… YOU DON”T HAVE ANY MORE MONEY THAN YOU DID BEFORE, YOU HAVE A SMALLER OVER DRAFT IN THE COFFERS>>>>>unless, of course, the $438 million dollar short fall in the budget was what you are aiming for.”
       
       
      I guess there are still working people who can do math in Maine after all – you need to get on there Scott, and tell those commetors how wrong they are….tell em it’s great & they just don’t understand.  Start by asking them if they’d like some Kool-aid.
       
      Did ya see where the sales tax revenue is expected to DROP, do ya know why that is Perfesser?  Do ya think it’s because they expect lower SALES on taxable goods!  Hmmmmmm…sounds like a boom in the economy to me!  You go girl!
       
       

      • Looker, you make no sense.  Revenue forecasts were revised upward.  Yes, there is still an overall shortfall, but not as much as expected.   That’s good news.   So as I read you all it seems like you’re saying America’s in decline, the economy is going to crash and burn, and as long as you can blame Obama for that, you’re fine with that — cheerleading against America!   I gotta chuckle.

        • Heh, gave you and article from Bangor itself….well, if you can’t argue facts with facts then, do what you did.
           
          Cheerleading against America –   you feel we are cheerleading against America, I feel you are lying about what we are doing, okay we all good now?
           
          You cited Maine and the improving economic outlook, and gave your opinion, how great it was going to be you hoped, I gave you an article, with cites, from the people who crafted the forecast for Maine explaining the reason for the decrease in their deficit, and how they “punted” to get that forecast and how in doing so, they acknowledge that a growth indicator, sales tax revenue, was actually expected to decline (decline, not grow…indicating….yeah).    Reality.  Not my opinion.  Nor did I wish Maine, or the US,  any particular ill in the process.  We don’t need anyone wishing us ill at the moment, we’re making ourselves sick enough nationally without anyone wishing it would get worse.
           
           
          ” I gotta chuckle.”
          Yes, you are a daily entertainment.
           
           
           
           

    • Put aside partisanship and hope that the economy does start to grow.

      I’d like to rely on more than just hoping that the economy straightens out.  I’d like to see government commit to spending cuts before it raises taxes.  I’d like to see government shut up about deficit reduction and come clean on debt reduction.  I’d like for Republicans who talk about small government and lower spending when they’re in the minority to act according to those principles when they’re in the majority.
       
      Right now, I’d like for the Obama administration and congress to take their plans for trillion dollar deficits and scrap them, and start working on budgets that reduce the debt.  That’s as realistic as hoping that the economy miraculously rights itself, though.

      • I see your point, but the problem is the recession.   If we don’t stimulate the economy, it could spiral ever downward and the problem could get worse as we cut spending.   Normally this wouldn’t be a problem, but we enter the deep recession with already high debt, thanks to the previous administrations.  So to me it’s a kind of timing thing — you have to stimulate the economy, and then cut back as the economy starts to grow, hopefully helped out by the growth (decreasing unemployment cuts costs, adds to tax revenues).      One reason I vote for Republicans sometimes even if the Democrat is closer to me politically is that I really trust Snowe and Collins (I’ve voted for each) to put a lot of stress on reducing spending in a pragmatic way.
        Because, take away all the partisan blog banter, I am a lot closer to most of you then you realize on concern about spending and long term economic stability.   We can avoid collapse, but both parties are going to have to make sacrifices.   Since 1980, using debt, Democrats and Republicans have compromised in a very negative way — the GOP agree not to cut spending, and the Democrats agree to cut taxes.   That damage has to be mended, and it won’t possible without both sides turning that compromise around.

    • Here in Maine we recently increased projections for revenue based on the data coming in. Yes, it’s just a projection with no actual numbers that indicate things are better, and it has a bunch of gimmicks that wise bureaucrats sometimes have to use to keep you dense righties from screaming too much, but it’s certainly enough for me to flout in front of you dense righties to defend my position on how wonderful government is at doing stuff. Or at least not nearly as bad as you say when run by the right people. Like Obama, with his Christlike visage, who thinks like me. Hopefully it’s a sign of recovery (and hopefully it spreads). Because otherwise, factors totally beyond Obama’s control are making him look bad. Because everything that goes wrong is Bush’s fault, but everything that happens that’s good is due to wise, moderate, pragmatic leftists gaining more control, like we are trying right now with the healthcare bill.

      Ultimately both things will need to happen — spending cuts and tax increases. Yep, there’s just no chance that spending cuts can be the main driver here. We need to take more of your money, definitely, but of course, we should have some token cuts to make you dense righties feel better about coughing up more money. And don’t start talking about how those spending cuts always get restored by we wise leftist big government types. We’re just doing what’s best, which is to suck you into grumpily acquiesing to more beneficent government by offering you things we’re going to take away later. It works too, every time, because you’re so gullible and we’re so smart.

      There is no way else to rebalance the budget that has any political feasibility. We’ve made darn sure of that. Even though you thick righties want to cut spending in the worst way, we’ve got the unions, the media, and of course wise leftist academia blocking you at every turn. Don’t rely on “tea party” protests, they’re pretty small and now they’re infighting. Yep, they’re going to be of no consequence. I decree it. There were only 50,000 in that big Washington thing you guys were so pumped about, and it wasn’t either over half a million or more, it just wasn’t. I decree that too. Because some random leftist on wikipedia said so. And if you disagree, you doth protest too much. Oh, goodness, how I love using that putdown. It just zings you clueless righties every time, and shows off my education and wit. I have advanced degrees, you know. Have I mentioned those? They’re certainly not from piling up BS until someone got sick enough to give me a degree just to get rid of me, no sir. So stop saying that. And stop laughing.

      Put aside partisanship and hope that the economy does start to grow. That means bending over and gracefully taking what we wise leftists want to give you. It’s inevitable anyway, so why fight it? Even if that’s good for Obama and the Democrats, it would also be good for America. It would. Stop laughing! More socialism is too good for America, because it means wise government bureaucrats prevent you ignorant proles from doing silly things. You’re like those wogs in Iraq, you’re just not up to running your own lives.

      Then as it does, come up with really strong arguments for spending cuts and restructuring of entitlements. Yes, sign up for the tax increases and all the socialist programs Obama wants right now, and then we can talk about cuts and fixing entitlements sometime later. We on the left will get around to cooperating with you someday on that. Really we will! Stop laughing! And that’s not either a bait and switch like what the left has done for decades to get what they want while promising pie in the sky later. It’s just not! I decree it!

      The Republicans should make sure that any tax increases also include spending cuts. Small, token ones, of course, that won’t hurt wise leftist programs too much in the short term, and which we’ll restore soon enough. But still. Work with the left rather than demonizing them as enemies. We’re not your enemies! We’re your wise, dedicated, paternalistic masters, as we’ve proven by taking over more of your lives every year and giving you more entertainment and more goodies from government. And now you’ll be able to get subsidized, government run healthcare too! So don’t demonize us when we’re working so hard for you. Just give in and let us get on with ruling over you

      I mean, it’s pretty silly to see adults talking about a major subsection of the country with playground insults. Calling people “Nazi-like,” for example. Oh, wait, that was me, wasn’t it? I got a little over the top and said I was fed up with you guys and that I wasn’t going to comment here anymore. But that wasn’t lying! No sir, far from it! Because later I remembered that, as a wise pragmatic leftist teacher, I owe it to you guys to continuously come here and point out all the things you don’t understand. Which has nothing to do with any sort of compulsion to find people to talk down to, so just shut up about that, and accept my wise, well-intentioned guidance in the spirit in which it is given.

      You need right and left. I’ve already explained how you need the left, to run the lives of you clueless wogs. And of course, you grunt engineer types on the right are occasionally needed to take care of tedious, technical details that we higher, more enlightened beings on the left can’t really dirty our hands with. So no side is going to “win” completely, ever. I mean, though we might drift towards more government forever, we’ll probably never get to true socialist paradise as long as there are foolish people around who keep harping on about “freedom” and “constitutional limits” and weird, obsolete stuff like that.

    • The State of Maine should be eyeing big cuts in their university system. There has clearly been a lot of frivolous spending in that area.

  • Unfortunately the big number will continue to outpace the little number until the SHTF

  • As somebody (sorry that I can’t recall, but I think it was shark or looker) said a week or two ago:

    We’re already spending scads of money that we don’t have, so why do we need to raise taxes?  Hell, why do we need ANY taxes?

  • For you on the “right”, think back to your support of George W. Bush’s going to war against Iraq, something I argued at the time would be far more costly and harmful to the US than how the Administration was portraying it.  The Iraq war brought no benefit to the US, but assured that Bush could not implement his “opportunity society,” or work during an economic boom to set the economy on more stable ground.   You would not have Barack Obama as President or the likelihood of major health care reform if the Bush Administration had not decided to go to war against Iraq.    Interesting, how politics goes.

  • McQ said this: “….your priorities for your income will be secondary to their desire to cover for their inept and inefficient profligacy….”
    Doubtful.
    My priority for my property is exponentially far beyond that of any number of thieving politicians.

    • Yeah, that was kind of the point of the comment, Don – using the force of government, they will make your priorities secondary to theirs.

    • No offense, but this is when we ask the Stalin question… – “How many divisions does Don have?”