Aaaaaahhhhh! The fiscal cliff! More like the Cliffs of Insanity! As if we didn't have enough to worry about. Our huge, bloated, inefficient government has gotten us into another fine mess. And we sit waiting and watching as though they actually have the ability, let alone the desire, to solve this or any of the other problems facing this country. One side keeps yelling to raise taxes while the other side whispers that the real problem is spending. The only thing they are really good at is pointing fingers. We all know whatever happens, it isn't going to really matter. There's no way they can ever collect enough taxes to cover what has already been blown. Everyone knows spending needs to be cut, but nobody wants to cut anything. It's like a bunch of over-eaters elected a bunch of binge eaters to guard the refrigerators!
It's funny when you get into economical debates with people and listen to their reasoning for one side or the other. I use the word "economical" very loosely because it is funny how little people really know about economics, but how they think they know so much. Maybe it's not that funny?
I live in a "tax the rich, tax everybody, tax everything, tax your way out of it" state. Out legislators convinced the populace that a tax increase would bring in more revenue and help resolve the budget deficit. The governor put a knife to throat of education and other public services and people voted to save the state. I actually read a quaint little post on Facebook from someone saying that they would "gladly pay more for the kids." You can't explain to those people that tax increases eventually reach a point where they become so prohibitive that revenues actually start to decrease. It's an economic principal and just doesn't fit well in a soundbite or a post on Facebook. People think it is simple; raise taxes = more revenue.
Revenue in the hands of the government is never well managed anyway. That's another thing people don't always get. So, I was not the least bit surprised when I read a recent report that tax revenue for the state of California had not only decreased after the recent tax hike, but government spending had gone up. Not on education, you know for "the kids." Apparently there was a sudden need to give the homeless people of California cell phones and great cell phone plans. I hope they have Facebook and get this post. Tax rates went up and revenue went down. People who live in states with high tax rates and can afford to pay high taxes don't necessarily want to pay high taxes. That means they can afford to move to states where they can pay reasonable rates, or they go to states with no state income taxes at all. But, I just heard today that California has an answer to that. Yep, they are going to tax people who leave the state! Might as well just change our state song to "Hotel California." "You can check out any time you like, but you can NEVER LEAVE!" Until you pay more taxes.
This could all be done and over if they would just leave the Federal Tax rates alone and make the Bush Tax rates permanent. That would require true leadership. But we just gotta have the drama; we gotta have the crisis; we gotta have discord. If raising taxes is bad for one group of Americans, it is bad for all Americans. It's like drowning. Drowning isn't good for anyone. You have one hundred people on a boat and the boat is about to sink and all one hundred people are in danger of drowning. One guy is saying, "I can save 98 of the people on the boat, but you have to let me drown two of the guys I don't like and get all the heavy change out of their pockets first. That will save the boat." The 98 people are like, "Yeah, let's drown 'em. You're our hero!" But there's this other group saying, "Wait a minute. Drowning is bad. We shouldn't drown anybody! We have a plan that can save all one hundred people!" Then the first guy says that they want everyone to die because he can't drown a couple of people like he wants! And people believe him!
So that's the problem.. We are all in the same boat. Raising taxes during a recession is just going to drown the economy. Raising taxes on the successful isn't going to generate enough revenue to fix anything that has already been broken. The best estimates are that an increase on the upper 2% would bring in $80 billion for one year. That is barely enough to run the bloated government for one week. Congress just passed $60 billion in relief for the Hurricane Sandy victims on the East Coast (new spending) so you do the math, what does that leave? When you tax the successful, you end up hurting the middle class. The successful employ the middle class. How many jobs will be lost? How many people will lose benefits? How will that effect the economy?
But, it could be that you just don't get economics and you think it is "fair" for the "rich" to pay more. If that is the case, then just admit that you have class envy, and you take pleasure in seeing the government stick it to people who are more successful than you are! I know this will get a lot of people screaming (I'm getting used to it) but if you don't know your Keynesian keister from a Hayek hole in the ground it doesn't much matter what you have to say! You would be like this one guy who put a YouTube video of Robin Williams on Facbook explaining how Bush had destroyed the economy! Ya! The Genie from Aladdin! If you want a celebrity economist to prove your point, at least use Ben Stein, a real economist and celebrity. If you want a liberal, semi/sorta thinks he's a celebrity I'd even give you Paul Krugman. But Robin Williams, come on! I don't know; I hear Eddie Murphy has great bit on Thermodynamics!
So there you have it. You get the government you deserve and you deserve the governement you get. This is what we've got. I guess when the majority of us get our news and information from Jon Stewart and Jay Leno we can't expect the chosen electorate to be very choice. So, I guess we better hold on, it looks like we in for a bumpy ride!
Hey, Thelma and Louise! Ya got room in that T-Bird for 300 million more?
