There is definite truth to the saying that the only things you can count on in life are taxes and death. And, of course, thanks to state and federal governments many citizens even pay taxes when they die. The federal death tax rate will increase to 55% on January 1st unless President Obama agrees to keep the rate the same. There goes your inheritance!
During your life you will pay plenty of taxes to fund local, state and federal government services. Some of which you utilize and most of which you will not. But that is your obligation for living in a civilized society to help pay for its governance. They question is how much should you pay?
Do you even know how many different types of taxes you pay? Some you pay directly while many others are passed along to you in the cost of goods and services. Sometimes you even have to pay taxes on other taxes. In some states, our fellow citizens are paying more than 50% of their incomes in total taxes.
Thankfully Florida does not have a state personal income tax although I am sure there are plenty of liberal politicians salivating at that possibility.
The bottom line is we are already taxed very heavily in the United States. So I get very frustrated when President Barack Obama says that the so-called rich at not paying their fair share of taxes and when Vice-President Biden spouts off that it is our patriotic duty to pay more taxes. The reality is that the top 10% of wage earners already pay 70% of federal taxes while more than 50% of workers pay no federal income taxes at all. So who is not paying their fair share?
Our governments do not have a revenue problem requiring more taxes anyway. They have a spending problem requiring more taxes. When was the last time you heard prominent Democrats like our own Congressman Debbie Wasserman Schultz say no to a new safety net or entitlement program? Not that Republicans are any better at times. It was former President George W. Bush’s signature that put the unfunded Medicare Prescription Drug Program into effect.
So thanks to politicians’ ever increasing needs to satisfy – make that buy – their voters with more government goodies, our country is now in an untenable debt situation and President Obama is campaigning around the country that “millionaires and billionaires” should pay a higher tax rate than their Secretaries do. Perhaps Obama can start by paying more taxes himself since his 2011 tax rate was lower than that of his Executive Secretary.
Let’s set the record straight. Many “millionaires and billionaires” pay lower effective tax rates because much of their earnings are from interest income on their savings. Savings that were built on wage income already taxed as they were acquiring their wealth. Frankly, I think earnings on traditional savings and investment accounts should not be taxed at all. But I would agree that income from leveraged investments should be taxed as ordinary income as well as the carried interest from hedge fund earnings.
Thankfully Obama’s proposed “Buffet Rule” of a minimum 30% tax rate for “millionaires and billionaires” was not passed by the United States Senate and will not become law in this Congress. It would not have generated notable tax revenues if it had passed. Only $ 47 billion over ten years while Obama’s proposed 2013 budget will increase the nation’s deficit by more than $ 900 billion in one year alone!
So now President Obama will focus his class warfare message on raising tax revenues by justifying the 2012 expiration of the lower tax rates for all Americans signed into law by former President George W. Bush rather than trying to cut the cost and growth of government. And he and Congressman Wasserman Schulz will continue to bemoan the 2013 budget cuts proposed by Republican Congressman Paul Ryan rather than pressuring Democratic Senate Leader Harry Reid to pass any kind of a budget at all for the federal government for the first time in three years.
Hopefully, likely Republican Presidential nominee Mitt Romney will properly educate the voters about Obama’s failed budget and economic plans; the negative impact to our economy from an expiration of the Bush tax rate reductions; and he will also make sure that voters know that the death tax will increase to 55% under Obama causing havoc to family business succession plans. Romney will win if he can convince voters of the dire consequences to our economic freedoms if President Obama and Congressman Wasserman Schultz bamboozle the voters again with their phony campaign for hope and change.
