Following the reelection of Barack Obama, the rhetoric coming
off of Capitol Hill concerning the “Fiscal Cliff” has been extremely high, but
what’s all of the commotion really about?
The Fiscal Cliff is a series of automatic spending cuts to
all levels of the federal bureaucracy (mostly defense) in addition to automatic
tax increases. You may have also heard of the fiscal cliff as a sequestration.
The Democrats in Congress want to resolve the “crisis”, by
raising taxes on the upper tier of tax payers in order to raise revenue. The
Republicans, however, do not want to raise taxes on any American, while they
would like to make reforms to entitlement programs, but have offered no real
solution to the revenue shortfalls in their plans.
On November 9th, the President’s first address to
the media following his reelection, he declared that he would veto any legislation
offering tax cuts to those making more than $250,000. This means the President
doesn’t want to extend the Bush Tax Cuts any further.
The President’s position has put Republicans in between a
rock and a hard place. They don’t want to raise taxes on the wealthy, but the
President is basically giving them no other options.
For the past three Sundays, Bill Kristol has insisted that
the Republicans in Congress should compromise with the President and submit to
raising taxes on the wealthy. Remember now, this is the same man that thinks
the Muslim Brotherhood is a moderate political party and the Arab Spring wasn’t
real.
Bill Kristol is by all accounts a dope, and no one on
Capitol Hill should heed his “advice”.
However, I do have a suggestion for the Republicans – just
let the President lead America straight off of the fiscal cliff.
By coming to any agreement, the media will portray the
President as the hero, and the Republicans the enemy – it’s a lose/lose for the
Republicans, so just let it happen.
The facts of the matter are that no matter what happens and
no matter what deal is agreed upon, America will head over a fiscal cliff.
Any freshman macroeconomic major will confirm that when you
raise taxes on those who already fund the government the most (excluding China
of course), you are asking for more problems than you ever originally bargained
for.
Raising taxes on the wealthy may lead to short term gains,
but it will create bigger problems in the long term.
If the Republicans let the President have his way, I can see
two good things that come from that, aside from the many bad things.
First, every single tax paying American will feel the
effects of the Presidents arrogance and liberal bias. As long as you’re a tax
paying America, your taxes will be going up. Americans don’t like their taxes
going up, so that will not bode well for the President.
Secondly, there needs to be spending cuts in the government.
This fiscal cliff is the only foreseeable way that spending will be cut.
Instead of having politicians examine the budgets of every department of the
federal government, having across-the-board style cuts will force the
bureaucrats to cut spending in wasteful areas.
Finally, I just don’t understand why the President doesn’t negotiate
going back to the Clinton era economics. After all, the Clinton era was so
magical and there were no problems then, right? All we’d need to do is raise
taxes across-the-board and cut federal spending beyond any level that is
currently perceived to be possible.
Either way, the next month or so left before the sequestration
is to take place is going to be a quite divided time for America, aside from
the Lame Duck session of Congress.
I don’t want to see taxes raised on any American, but sadly
is looks likely. And for that, we should all thank Barack Obama, John Boehner,
Harry Reid, Mitch McConnell, and Nancy Pelosi.
1 comment:
This is the reason why I favor a flat tax rate -- so everyone will know what they are contributing to government. People are utterly unaware that the wealthy shoulder the vast majority of the tax burden in this nation. I favor allowing sequestration to happen because we can't allow people to continue to be insulated from the true cost of socialism. (Isn't it funny how the Democrats now acknowledge that the Bush tax cuts were across-the-board instead of only for the wealthy?)
It might actually be better to just give in to the Democrats' demands -- raise marginal tax rates. Increase taxation on capital gains and dividends. The resulting capital flight will further cripple the economy, and maybe then we can begin having an honest conversation about taxes and federal spending.
Barack Obama was quite clear during the campaign that he intends to raise taxes. People then voted for him. Let them know the ramifications of their decision.
Post a Comment