More Questions Than Answers
Before I start, I want to apologize to my readers for this column. I haven’t written it yet, but I know it will just make things more confusing and I don’t think there is an easy way out.
What is so confusing and lacking of answers is the Budget of The United States Government that President Biden just proposed.
Let’s get started with one undeniable fact: President Biden has zero clue what is contained in this massive piece of legislation.
Oh wait, another fact: This will never get passed.
Since we have those two facts, why rehash it?
Well, it is a 7.3 trillion dollar piece of legislation that will be chopped up endlessly and there are some interesting questions I would like to ask.
I took the day to read the release from the White House. I get it, it’s a sales pitch for something so massive very few people can wrap their arms around it. You need to simplify it for everyone to understand.
Now, I looked back at one of Trump’s budget proposals and it too was a massive piece of legislation that had a similar load of BS from the White House in it’s press release.
The point is, that’s the game in Washington, throw as much as you can at people, lie about it and hopefully you get 66% of what you ask for.
Stupid game but it is what it is.
Back to the proposal.
Remember, I am no budget savant and truthfully I haven’t balanced my checkbook since The Clinton Administration so I may not be the expert you need. What I am is a realist and I like things simple. This budget proposal is not simple and also not even possible. Forget the Republicans will never let this monstrosity out of the house, there is no way it can be paid for. None.
The fact that it can’t be paid for has never stopped Washington from doing things. They print more money, they borrow more money and so on. Balanced Budget is just an expression, like “same difference”. It means nothing.
In the simplest example of how they will never reach their goal of reducing the deficit by 3 trillion dollars over the next ten years. How?
By raising taxes on corporations and the rich, that’s how!
That is the dumbest freaking thing I have heard out of Biden since last Thursday.
Raising taxes on corporations may generate some revenue, I don’t think it will raise an average of 300 billion a year for the next ten years. What it will do is raise prices for the products and services these corporation provide. If my taxes are going up 30% (from 21% to 28%) the prices of my product or service has to go up a proportionate amount to satisfy my shareholders. That is inflationary. Am I wrong?
The second component of this mindless budget is taxing the rich’s income. Do they really think that taxing a Marc Zuckerberg or Larry Ellison is going to get them there? It is a popular misconception about the super rich. Everyone seems to think these guys are pulling in multi billion dollar incomes. Maybe a few are but for the most part, they receive a salary (yes, it is substantial) and their wealth is tied up in the shares of the companies they own. Sure they have portfolios of other investments and on paper they look super rich but you can’t tax paper. What the Federal Government can do is tax profits after a sale and they do that now at a much lower rate than the income tax rate. The way the government is going to reduce the deficit is by raising the Capital gains tax so anytime any super rich person sells an asset it will be like earned income. Not sure that you will gain all that much from that. Also, I am pretty sure the super rich will find ways around paying a lot of these increased taxes. Isle of Man anyone?
In an election year when a lot of your base is fed up with your mismanagement of multiple arenas, turn on the rich, that will surely get you votes. Too bad that philosophy has never worked, ever, in a Presidential year. Oh wait, FDR did something like that but we all know Joe Biden is not FDR, even though he models himself sort of like that.
The Republicans will never go for raising taxes on the rich, nor should they. Like every good Republican I believe the way to solvency is spend less. It worked for Reagan, It worked for the first three years of Trump’s administration.
When a government spends less and taxes less it frees up corporations to spend for growth, people have more money to spend and the increased spending and growth increases tax revenue silently.
Going back to this budget and using my famous high school math I find that if it were to pass, every man woman and child would be on the hook to the US government for $22,461 in 2025. I know it’s not that simple but I think it helps to wrap your arms around a number that you can understand as opposed to 7.3 trillion which no one can wrap their arms around or understand.
The kicker here is that this is the budget for 2025. What about 2026 and 2027? The plans speak of reducing the budget deficit over the next ten years but nowhere does it mention any of the following budgets. How will they impact the plans started in 2025.
I think the whole process is a load of crap and the need for a realistic approach, not guided by politics or an upcoming election is needed. These people need to get their heads out of their respective asses and work to come up with a budget that won’t create more government involvement and start moving away from that altruistic vision of the government will take care of you.
Thank God for DC incompetence, this budget will be DOA in the House but where does that leave us. Threatened government shutdowns every two months? Lets hope so. Leave them shutdown I say.