Hopefully over the last several weeks, you’ve been paying attention to the debate going on in our nation’s Capitol about this thing called, “The Fiscal Cliff”. In case you did not know, the term, “The Fiscal Cliff” referred to what would happen should our government officials fail to address the issues of spending and incredible deficits. Our current national deficit is quickly approaching $16T. And, that does not include our actual obligations for pensions, Social Security and Medicare, and other government long-term “promises” we’ve made.
Both sides, Republicans and Democrats, were hopelessly divided over how to solve this crisis. Republicans believed that by lowering taxes, and spending, we would stimulate the economy by putting more money into the hands of the people, and would help in creating jobs in the private sector. The Democrats, however, believed that by increasing taxes on the wealthiest individuals (those making more than $250K), we’d be able to knock the deficit way down.
The notion that increasing taxes on the wealthiest individuals in order to reduce the deficit is ludicrous! If we taxed at 100% every dollar above $100K on everyone making that much, this would only generate approximately $400 billion (according to IRS sources) – that wouldn’t even cover our annual deficit for one year! And this then begs the question, “What do we do for the next year?” Why punish those who have done well in this country? Did these wealthy individuals steal their wealth? Did they come by it by doing illegal things, like selling drugs, or embezzling? I don’t think so.
One of the biggest problems, you see, is that our government thinks that YOUR money is really THEIRS! And, they want your money! Why not allow the workers to keep more of their money by reducing taxes? Put more money into the pockets of the working class so they can spend it on clothes, cars, food, and entertainment. Believe it or not, the government thinks it can spend YOUR money better than YOU can! I hope you don’t really believe that! No, you are a much better manager of your money than Uncle Sam is.
Look no further than such “worthy” government enterprises as the Postal Service or Amtrack. Although the USPS is no longer a governmental enterprise, it still receives a good bit of its operating capital from the government. Both USPS and Amtrack are nearly broke and continually come to the government trough for a handout to keep them from going bankrupt.
The final result of all of the debate over “The Fiscal Cliff” will raise taxes on some 77% of American workers (so much for taxing only the rich, eh?). The so-called payroll tax holiday is history now! Your Social Security and Medicare withholdings will now be a full 6.23%, so you’ll see less in your paycheck this year. And, the new taxes associated with the Affordable Care Act will kick in this year, too! Corporate income taxes will go up also. The U.S. already had the highest corporate rate in the world, sending many of our American companies overseas.
No, the deal that was signed was not a good deal for the American taxpayers, at all. The bill was several hundred pages long and was not read by all signers. So, guess what? We don’t really know everything that was in the bill! As the weeks pass, we’ll find more of the details about this deal and I’ll share them with you right here!
So, until next time, stay positive, and keep your chin up!