Obama and Taxation

Obama has pledged to the American people that no one making less than 250 thousand dollars would see a tax increase but instead would receive a tax cut. Can he make good on such a pledge and still pay for expensive new programs? The classical answer would be no, but connivance still reigns in the political arena.

The payroll tax is only one source of revenue for the government. But the one key thought to remember, is that all revenue comes from the taxpaying citizens. When a particular segment of the population receives a benefit, other tax devices are used. The government has resorted to 'targeted' taxes that result in taxing special interests. You know them as cigarette taxes, phone taxes, liquor taxes, etc. Other targeted taxes are licenses. Licenses make up another income stream for both local and Federal governments. There are too many targeted taxes to list here, but suffice it to say, that if you own it, subscribe to it, buy it, or use it, the government gets a share of its cost.

The money any politician can spend begins with the taxpayer. Taxpayers provide 100% of the money the government spends. The government has elevated the different ways of extracting money from its citizens into an art form. The more money the politicians have - the more power they have to wield over everybody. We have allowed the tin pot politicians to take control of our society and wrest the freedom to choose and decide from us. Once government injects dollars into an entity, politicians can then take a commanding role with that entity. The entity no longer has any independence. This is how we as citizens empower the government.

Don't get me wrong, there are places that the government must assert itself on behalf of the national interest. Defense, interstate commerce, and justice are but a few of the major roles that government must represent us. But not all projects rise to the level of national importance.

The definition of what politicians define as local or national projects separates me from Liberals. It seems lately, that all problems are national problems. Ambitious politicians anxious to climb the political ladder see the money from the government as the way to fame and glory. Thus, politicians use earmarks and political patronage as their stepping-stones. Local initiatives for ridiculous projects generally fail. But by acquiring Federal tax-dollars, the local inhabitants get a project for an apparent bargain, even though they would not have paid for it out of their pockets.

But I want to remind everybody that the combination of all federally paid projects comes with a big price tag. That is why we are all bending from the weight of all those taxes. Seeking the easy and cheap way out has cost us dearly in real terms of jobs and national wealth. As the government 'helps' more people, it needs more and more money. Taxes go up. Our politicians have been very creative in coming up with ways to get more taxes so that they can fund more projects. This creation of governmental dependence is a cycle that is mathematically certain to collapse the economy. It is important to note that as we demand more from our government, the more our government will have to demand from us.

That brings us back to the processes that Obama has put into motion. Recently, using the power of the governmental purse, the U.S. has loaned several large corporations billions of dollars. Because of the large stake in those businesses, the government has assumed a commanding role in dictating both function and management of those entities. After all, somebody has to look after the taxpayers investments. Obama has put into motion several projects that will cost trillions of dollars. The only source for that money is the taxpaying citizens of this country.

There are few options to get the money for his extravagance. He can monetize the debt (print the money), borrow the money from other countries on the hope that we will once again regain the upper hand, or he can use various taxing schemes to extract the money from the citizenry.

Monetizing the debt will devalue our currency and cause massive inflation.

Borrowing will put us in the same position that our American companies have found themselves in when they borrowed. The foreign lenders will have a commanding role in our country because they now own a large part of our economy. Borrowing massive amounts of foreign money is a disaster in the making. Americans will again lose their independence because others own us.

Taxation is the only method left. But as Obama will find out, the increase in taxes will only cause the economy to get worse. More jobs will be lost as businesses move to tax friendlier countries. Obama has pinned his hopes on revenue raising schemes such as 'Cap and Trade'. That irresponsible legislation is only another tax levied on all of us. It does not matter how much money that the government collects, it is never enough.

Federal intervention in lieu of local control robs each and every citizen of the ability to control and exercise his/her responsibility as a citizen. When the National Government usurps the local say-so, those citizens have lost the freedom to chart their course as they see fit. This is not about taking control from the Federal government, but rather about a takeover by the Federal Government. We have to say no to those schemes hatched by politicians for self-aggrandizement. If a project is worthy, the people will accede and find a way to pay for it without federalizing it.

Remember if you are making clubs that others use to beat you; it is time to stop making clubs. We keep asking for punishment every time we allow someone else to assume the responsibility that is ours. What seems as the best way today will eventually haunt us. The piper always gets paid and when he claims his payday, we will suffer for our actions.

Cheers,

-Robert-