Aunt Susan probably thinks that raising taxes on “the rich” will hit those idle mansion dwellers who have bags of money under their bed. What she needs to know is that many of the so-called “rich” are small business owners or investors. Many small business owners file their taxes under the individual income tax code. According to Congress’s Joint Committee on Taxation, 940,000 small business owners would be hit with higher taxes if Congress raises taxes on “the rich.” These men and women aren’t sitting on piles of money – they’re investing it in businesses and creating jobs. Efforts to shake down the rich are more likely to hit the job creators and their employees. Is that we really want?
But in the end, government spending is the real back-breaker. Until 2008, spending and tax revenues grew at roughly the same pace – spending exceeded tax revenues, but not by the absurd 1.1 trillion that it does today. For the past four straight years, we’ve overspent by more than a trillion dollars. The national debt climbed quickly past $16 trillion earlier this year (that’s over $52,000 per citizen) and experts say the national debt will easily balloon to over $20 trillion in debt before Obama is out of office. So who’s minding the ship? The Republican controlled House passed budget the Ryan budget, which would make real spending cuts and take steps toward much-needed entitlement reform. Meanwhile, the Democrat led Senate has refused to pass a single budget for nearly four years. After the last debt-ceiling hike, Congress came up with $109 billion in sequester cuts scheduled to take effect January 2. That level of cuts would barely make a dent in the current deficit – and yet Congress seems determined to stop even those cuts from happening.
The “Uncle Bobs” and “Aunt Susans” in our families are wrong but they mean well. You may not change their mind overnight, but by showing them the facts and making a robust case for fiscal responsibility and economic freedom, you can help them rethink the issues and question their weak assumptions.
And to everyone – including Uncle Bob and Aunt Susan – Merry Christmas, Happy Hanukkah, and best wishes for the New Year!