Diary

Disturbing Tax Foundation Report

If you want to go to a great website that will give you the straight story on taxes, visit The Tax Foundation at taxfoundation.org. The Foundation was established in 1937 as a clearinghouse for nonpartisan information about how taxes affect our economy.

 

A March 12 Foundation release might have caught your eye – or should have. It said:

 

 ‘Federal income tax rates would have to be more than doubled across the income spectrum if Congress were to close the deficit in fiscal year 2010…’ (end of excerpt)

 

Doubled?

 

Yes, doubled. This means that the federal deficit is equal to the government’s income from all personal federal income taxes!

 

This is frightening stuff. It should terrify every productive American who actually pays taxes. But once you put it into context, you understand what is going on. Because this is Obama’s plan.

 

Socialistic government policies always are intended to empower government. They drive up spending, which requires more taxes, which draws capital from the private sector, which makes for lower economic growth and makes society poorer, which drives more and more people to government subsidies, which requires even more tax revenue from a smaller economy, which results in even more capital being drawn out.

 

Ultimately it increases government power and starts the cycle all over again. And then you understand why socialism makes entire nations poor.

 

Said the Tax Foundation press release:

 

‘Instead of taxing joint filers with rates ranging from 10 percent to 35 percent, tax rates would have to start at 24.3 percent and reach up to 84.9 percent.’ (end of excerpt)

 

Tax Foundation Director of Policy and Communications Bill Ahern, who authored the report, Can Income Tax Hikes Close the Deficit?, added:

 

 “The federal government is spending so much that even if policymakers were willing to fund government services with actual tax revenue instead of piling on more debt, the federal income tax system in its current form wouldn’t be able to raise that much.” (end of excerpt)

 

Look at California with a budget crisis that is beyond what anyone could have foreseen 10 years ago. The deficits have been caused by the state’s public-employee unions and its welfare-staters on the political left, working with Democrats in the state legislature, who have, for decades, been giving themselves and the state’s so-called “poor” – including millions of illegals – sweetheart deals that now have passed the tipping point and cannot be made up through normal tax channels but only through massive tax increases on an already over-taxed populace.

 

So even states once deemed invincible economic engines are on the skids. And while the federal government is broke too, it is being asked to bail out California. It should not. Restrained spending is the only answer. All California public salaries and welfare payouts must be cut substantially.

 

The Tax Foundation added that even by 2012, there still would be a need to set federal tax rates at 15.8% to 62.6% to close the deficit gap. The release continued:

 

‘Average tax payments would have to rise by almost $10,000 in 2010 to erase the deficit. The average tax payment of a tax filer making between $75,000 and $100,000 would increase by $11,164. Taxpayers with AGIs (annual gross incomes) over $1 million would see their tax bills climb by $969, 505.

 

‘If high-income people had to pay a federal tax rate ranging from 65 percent to 85 percent, adding on an 8 percent rate in most states plus local income taxes and payroll taxes would push tax rates close to 100 percent for some households.

 

‘”At some point, government would be taking away all earnings and there would be no incentive to work,” Ahern said. “There can be little doubt that the high tax rates necessary to balance the budget in the next several years would discourage all income-producing endeavors.”’ (end of excerpt)

 

Wow. Notice the language “no incentive to work”. That is what excessive taxation always produces.

 

There is no way to solve this situation except by stopping the spending. Which can be done only by voter action next November, and which already has been reflected in elections in New Jersey, Massachusetts and Virginia, and by potential 2012 presidential candidates like Mitt Romney who said bluntly:

 

 “And frankly, I’m very, very concerned that America is on a severely wrong track, that if America doesn’t change course that we’re going to kill the American dream for our kids and our grandkids, that we’re going to get surpassed by other nations. And that’s why I wrote the book, which is to lay out precisely what I think we have to do in everything from energy, education, taxes, deficit spending, the debt we’ve racked up through entitlements. We’re going to have to make some dramatic changes in America or we’re going to find ourselves being weakened. And this president is not doing that job.” (end of Romney quote)

 

Meanwhile the Tax Foundation issued another report saying that out of the 142 million federal tax returns filed in 2008, that 51.6 million returns, or 36.3% of all returns filed, resulted in filers getting back all their federal withholding and often more.

 

Writes Tax Foundation president Scott Hodge:

 

‘”Nonpaying status used to be a sure sign of poverty, but thanks to increased use of the tax code to deliver social benefits, incentivize behaviors and funnel money to targeted groups, middle-class families have now been pulled into the growing pool of nonpayers,” Hodge said. “We’re now in a situation where a record number of tax filers are completely disconnected from the cost of government.”

 

The number of nonpayers has increased by 59 percent in less than a decade, growing from 32.6 million in 2000 to 51.6 million in 2008. In the same time period, the total number of tax filers grew by only 10 percent.’ (end of excerpt)

 

What does this mean?

 

It represents increasing socialism, where more and more people pay no federal income tax or get money from the government, and thus have no incentive to vote to restrain federal spending. And the spread of this phenomenon to the middle class means that fewer middle class people are invested in the federal government, and may end up favoring increased outlays since they are not paying for them.

 

Joined together with the so-called “poor” – who never pay taxes and often don’t even work – and government workers – whose paychecks derive from increasing taxes – this is a growing voter bloc that can always be induced to favor more spending and can tip elections all over.

 

This is an intentional strategy of Obama and his big-government cronies – to remove the tax burden from more and more people so that increasing numbers of people have no incentive to vote for spending restraint.

 

In these trends the Tax foundation sees one thing – increasing income redistribution. And this is the heart of the matter, to shift increasing amounts of wealth to the government and to people who have not earned it. Then the government ends up controlling increasing wealth and more people.

 

Please visit my website at www.nikitas3.com for more. You can print out for free my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.