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Fiscal cliff - It’s the spending stupid

The fiscal cliff is the enevitable result of a dysfunctional congress and a disconnected president. Taxes will increase regardless.
The fiscal cliff is the enevitable result of a dysfunctional congress and a disconnected president. Taxes will increase regardless.
Maryland's Money Matters

It’s only a few hours away. The deadline for DC lawmakers and the president to reach a deal on the looming fiscal cliff approaches. Americans will be celebrating the new year while congress squabbles and grumbles over economic issues, which should have been dealt with years ago. However, the debate of whether tax hikes to families and individuals earning over $250K takes center stage, the true premise of the argument leans in the cobweb filled corner of fiscal insanity. It’s the spending stupid!

Granted, some people just can’t manage personal finances. They rack-up huge debt with interest and liability via credit; generally living beyond their means to repay. However, many of us understand that credit cards are not money and maintain financial sanity by cutting frivolous spending. A good budget is crucial to financial solvency. Washington knows nothing of this. They borrow and spend like consequences are not forthcoming to their superfluous spending follies. Can we call shenanigans on all these shell games now? It’s the spending stupid!

With laser-like precision, the president and democrats focus on raising taxes on the most successful Americans; that’s all. This scheme seems to be the proverbial “magic bullet” that will bolster the faltering economy. It’s a scenario that dovetails with the president’s view that economic fairness between wage earners is the only potion that will cure their class envy. Invariably, it will not. Raising taxes alone may make us feel better. After all, we’re finally sticking it to those evil rich people. However, it will not change our own personal circumstances in the least. We will still make all the poor decisions that lead to financial ruin. It is a ruse; it is this guise of fairness that allows democrats to execute their obscuration of economic facts. It’s the spending stupid!

But what is fair? Richard Shaw, article contributor to Seeking Alpha, cites the most recent IRS statistics regarding income versus taxes paid. He notes that,

The real workhorses for the IRS are the 16.7 million tax filers (11.9% of total filers) who reported between $100,000 and $500,000, having paid 44.9% of all taxes, at average federal income tax rates from about 16% to about 25%.

What we know about this group of taxpayers is that more than half own and operate small businesses and file their business taxes under Sub-chapter S as individual income, avoiding the overly complex and highly regressive corporate tax code. What they know about the ills of Washington is that it’s the spending stupid!

So, this group of taxpayers pays the lion’s share of federal income tax while 140.5 million tax fillers owe nothing. Apparently, taxing successful people more is what passes for fair in Washington. In any case, DC lawmakers need more money to escalate their spending rampage. It’s no matter that such a tax increase will only allow the government to function a few days. It’s also no matter that the national credit card is tapped out. Under the fairness/dependency doctrine, welfare, food stamps, and other entitlements take precedence over success and self-reliance; no matter that it’s the spending stupid!

Small businesses will not be able to hire more employees. They will sit on investment capital in lieu of economic uncertainty. They may even close shop because of the burdensome taxes that will result from implementation of the fairness doctrine. The economy will continue to struggle under the weight of higher taxes for the job creators of America. Taxes will rise either through congressional compromise or passing of the fiscal cliff. Lawmakers will either pat themselves on the back or resort to the inevitable finger pointing depending on the way tax increases come about. Regardless, the debate will remain on taxes and never focus on the true nature of fiscal insolvency. It’s the spending stupid!

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