- We all have a patriotic duty to make America better off tomorrow than it is today.
- Don't disrupt the fragile economic recovery.
- Cut and invest to promote economic growth and keep America competitive.
- Protect the truly disadvantaged.
- Cut spending we cannot afford -- no exceptions.
- Demand productivity and effectiveness from Washington.
- Reform and simplify the tax code.
- Don't make promises we can't keep.
- The problem is real, and the solution will be painful.
- Keep America sound over the long run.
Friday, December 10, 2010
The Obama Administration's Flawed Foundation
Whose money is it anyway? The government's money or the people's money?
The answer to this seemingly simple question is important.
"Republicans have a different view," Barack Obama noted Tuesday when remarking on the tax cut and unemployment extension compromise. "They believe that we should also make permanent the tax cuts for the wealthiest 2 percent of Americans. I completely agree with this. A permanent extension of these tax cuts would not cost the american taxpayer $700 billion at a time when we need to start focusing on bringing down our deficit."
Is the $700 billion the people's money or the government's money?
The truth is that an increase in the tax rates would cost the American people $700 billion in additional payments to the government.
It's money out of people's pockets and into the government coffers.
Would you prefer to keep your money or give more of your money to the government so that bureaucrats can decide how to spend it?
This month, the National Commission on Fiscal Responsibility and Reform released its report titled, "The Moment of Truth." Running a slight 65 pages with only four pages of facts and figures, it is microscopic when compared to the language packed into the recent stimulus or health care bills. It is also much more understandable, using common language and phrases. One of my favorites is, "Other taxpayers underreport their income and taxes, hoping to avoid the audit lottery."
Before delving into the details of the proposal, it's helpful to review the assumptions inherent in the report.
The section of the report titled "Our Guiding Principles and Values" lays out the commission's understanding of where we are and how we should approach the government budget. They are:
The guiding principle and value that is not mentioned is the understanding that the government gets its money from the people. It's the people's money.
One of my favorite quotes is from President Calvin Coolidge, "I want taxes to be less so that people may have more." He understood that the government was entrusted with the people's money and that the more the government taxed, the less money people would have for themselves.
The report continues, regarding tax reform, "Those of us who are best off will need to contribute the most. Tax reform must continue to protect those who are most vulnerable and eliminate tax loopholes favoring those who need help least."
Regarding saving Social Security, "All of us must do our part. The most fortunate will have to contribute the most, by taking lower benefits than scheduled and paying more in payroll taxes. Middle-income earners who are able to work will need to do so a little longer. At the same time, Social Security must do more to reduce poverty among the very poor and very old who need help the most."
The recurring theme: Redistribution of wealth through government interaction.
Government is in charge, government decides, government controls.
Digging into the details of the plans reveals that the commission proposal includes an increase in taxes to the American people from 14.6 percent of gross domestic product in 2010 to 20.6 percent in 2020.
Known for his frugality and common sense, Coolidge said in his inaugural address: "I favor the policy of economy not because I wish to save money, but because I wish to save people. The men and women of this country who toil are the ones who bear the cost of government. Every dollar we carelessly waste means that their life will be so much more meager. Every dollar we prudently save means that their life will be so much the more abundant."
Coolidge, who is included in a recent book, "The Essential American: 25 Speeches and Documents Every American Should Own," might not be well known, but he was a solid performer on the economic front. His tenure as president was marked by slightly more than 1 percent inflation and slightly more than 3 percent unemployment.
Remember: The higher the taxes, the less money the people have.
It seems so simple, but somehow people have become confused -- it's time to go back to the basics.