Taxes, Spending, and
Debt are the Real Issues
October 16, 2006
Washington we hear a lot of talk about tax cuts, but the rhetoric does not
always match the reality.
For most Americans, taxes remain too complex and too high.
After the tumult of the upcoming midterm election, it is imperative that
Congress gets back to basics and addresses our terrible tax system.
taxes benefit all Americans by increasing economic growth and encouraging wealth
creation. Iím in favor of cutting everybodyís taxes Ė rich, poor,
Whether a tax cut reduces a single motherís payroll taxes by forty
dollars a month, or allows a business owner to save thousands in capital gains
and hire more employees, the net effect is beneficial.
Both either spend, save, or invest the extra dollars, which helps all of
us more than if those dollars were sent to the black hole known as the federal
conservatives have touted the Fair Tax proposal as an issue in the upcoming
pure consumption tax like the Fair Tax would be better than the current system
only if we truly did away with the income tax by repealing the 16th
we could end up with both the income tax and a national sales tax.
A consumption tax also provides more transparency and less complexity.
But the real issue is total spending by government, not tax
other words, why change the tax structure if spending stays the same? Once we
accept that the federal government needs $2.7 trillion from us-- and more each
year-- the only question left is from whom it will be collected.
Until the federal government is held to its proper constitutionally
limited functions, tax reform will remain a mirage.
apply a very simple test to any proposal to overhaul the tax code: Does it
reduce or eliminate an existing tax?
If not, then it amounts to nothing more than a political shell game that
pits taxpayers against each other in a lobbying scramble to make sure the other
guy pays. True
tax reform is as simple as cutting or eliminating taxes.
No studies, panels, committees, or hearings are needed.
When reform proposals seem complicated, they almost certainly donít cut
should simply focus on cutting existing taxes and reducing spending, instead of
complicated overhauls of the system.
question to ask yourself is this: What would I do with the money withheld from
my paycheck each month?
The answer is simple:
you would spend, save, or invest the money, all of which do more for the
economy and society than sending it to Washington.
Thanks to the deception of income tax withholding, however, some people
actually look forward to tax time and a much-anticipated refund. Imagine how
quickly Americans would demand lower taxes and spending if they had to write the
federal government a check each month!
relief is important, but members of Congress need to back up tax cuts with
spending cuts- and they need to vote NO on every wasteful appropriations bill
until we start over with the federal budget.
True fiscal conservatism combines both low taxes and low spending.
spending would not be hard if Congress simply showed the political will to
tackle the problem.
Iím not talking about cutting the rate at which government
spending grows, but cutting the actual amount of money spent by the federal
government in a single year.
If federal spending grows at 5% rather than 7% one year, thatís hardly a great achievement on the part of Congress. The current federal budget of around $2.7 trillion could be cut to $2.5 trillion quite easily. The vast majority of Americans would not even notice. But we must begin chipping away at the federal budget if we hope to address the underlying problem of government debt.