Thursday, February 26, 2009
Obama Budget = $1 Trillion Tax Hike
Yesterday during News Talk Online on Paltalk.com I asked the question, "where is the money going to come from to pay for President Obama's economic recovery package?"
Several callers suggested that it will come in the form of a tax hike. But my response then was, in essence, he's not called for a tax hike for anyone making under $250,000-a-year. In fact, as of April 1, those individuals should see, the president says, larger paychecks because federal taxes are being reduced.
But today, during his budget address, the president proposed nearly $1 trillion in taxes.
Of course, if you're going to reduced taxes for most of us, increase spending and cut the federal deficit of $1.3 trillion in half in four years, you have to get the money from somewhere.
This means a fundamental switch in how taxes are collected in the United States. Poor and middle income families will see a reduction in their tax obligation. But 2.6 million of the richest Americans will pay a greater proportion.
Since most of us are unaffected by this, why should we care? Because Americans believe in the concept of fairness. So, as unpopular as this may seem, I, who by way of disclosure stand to benefit not lose by this plan, am going to cry "foul."
This is not to say that the burden should be placed on the poor either. It should be evenly distributed.
In my mind, there's only one way to do this: eliminate the federal income tax.
I say, get rid of the income tax with its loop holes and tax shelters and disproportionate burdens. And replace it with a federal sales tax.
Here's what will happen if we do that.
People will come home with fatter paychecks. If you have a $50,000-a-year-job you'll take home close to that. Of course there will have to be other withholdings, perhaps for Social Security, state income taxes and the like. But in the main, those who are employed will know how much they are actually making.
If you have more money in your pocket you have more money to spend as well. If you spend money, that money will be taxed. The federal government won't suffer. In fact, this plan has the potential of raising a lot more money for the feds than the income tax.
But that's not all.
All those tourists who are coming here to enjoy the United States (and we welcome them with open arms!) and who are spending so much money because their currency is strong against the dollar right now will be contributing to the funding of the infrastructure they are benefiting from during their visits.
But, as the late night TV pitch man might say, there's even more!
All those illegal immigrants who are, advocates argue, draining public resources but not contributing, will in fact be paying their fair share as well.
Every time they go to a McDonald's to buy their one nutritious meal of the day, they will be charged a federal sales tax. You've heard about pay to play programs? We can call this one pay to stay.
By the way, for those of you who think this plan lets the rich off the hook - it doesn't. People who have more money spend more money. If they spend more money they will be contributing more to the federal monetary stockpiles.
Finally, it takes the federal government out of the business of being punitive toward its own citizens over an income tax whose regulations are impossible, even for the IRS, to follow.
I have no problem with pumping money into the economy to stimulate it. And I agree with reducing the federal deficit. Now let's find a way to share this burden equally among all of us, citizens or not, who live and work or visit this great nation.
We'll talk about Obama's proposed budget and my vision of a fair tax structure at 5 PM New York time today on News Talk Online on Paltalk.com. CLICK HERE to join in the conversation.
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