Now that we have new representatives, it's time to advance immediately on them and address the issue that can both rebuild our economy and relieve us of government oppression: tax reform.
As I began to point out in last week's article, Congress' plan to subsidize all its outrageous borrowing and spending will demand far more than the tax man's just collecting on expired Bush tax cuts. There are a host of other levies coming down the turnpike from Washington.
Who isn't already completely fed up with the feds' utter waste of our tax monies? Just a week ago, war analysts and government auditors reported that only 10 percent of U.S. taxpayers' money being poured into Afghanistan is actually being used to stabilize the country, with as much as $1 billion in aid ending up in the hands of the Taliban and other insurgency groups!
When a nation is in economic peril, who in their right minds spend tens of millions of taxpayers' dollars to fund a president's 10-day tour to India, Indonesia, China, Japan and South Korea? Couldn't we have sent any other ambassador, who wouldn't have required the accompaniment of such a massive security, political, corporate and media entourage?
So first, there's all that federal waste happening, which already has cost taxpayers exorbitant amounts. It has been estimated by watchdog organizations that the feds waste nearly $1 trillion every year.
Second, as I itemized last week, the expiring Bush tax cuts are on the imminent horizon, which, if they were to expire, would cost Americans a minimum of $3.8 trillion over the next 10 years.
And then there are the inevitable taxes that are coming because of the feds' massive and compounding deficits and debts. Even if all the Bush tax cuts were repealed, the Congressional Budget Office concludes that the deficit would be nearly $1.1 trillion in 2011. The cumulative deficit from 2010 to 2019 under President Barack Obama's proposals would total $9.3 trillion. And the national debt in 2020 would top $24.5 trillion, exceeding the gross domestic product projection for 2019 of $22.8 trillion. And here's the kicker: By 2020, half of income tax revenue would go toward paying interest on that $24 trillion national debt.
That is why Washington is considering charging Americans an additional, European-style value-added tax -- above and beyond sales tax -- which is a form of consumption tax at each stage of an item's manufacturing or distribution, ultimately passed on to the consumer (even though the National Retail Federation just released a study saying a VAT "would result in the loss of 850,000 jobs in its first year, reduce the US gross domestic product for three years, and cut retail spending by $2.5 billion over its first decade," as summarized by CNBC).
And if Obamacare is not repealed, a host of other taxes are coming to your front door. Americans for Tax Reform has pulled from Obamacare legislation almost 20 taxes coming down the pike (with references to the location in the law and the dates the taxes begin, some in 2011) that will result in working families paying more than $500 billion in additional taxes.
And don't forget that entitlement spending already is growing at an alarming rate. Medicare, Medicaid and Social Security programs alone constitute 56 percent of federal expenditures. And even CBS recently admitted that by 2020, roughly 93 cents of every dollar of federal revenue will be eaten up by major entitlement programs and payments on the national debt.
And we are going to pay for Obamacare how?
Should we feel any more confident that Washington bureaucrats are handling our tax monies when The Wall Street Journal recently reported that as of the end of last year, federal workers nationwide owed $1 billion in overdue taxes -- with Capitol Hill employees owing $9.3 million, an average of $15,498 among those working in the House and $12,787 among those working in the Senate. They're like tax junkies on steroids!
America's Founders would have been horrified at the bloated federal bureaucracy we have now and the maze of taxes we have to navigate -- sales taxes, income taxes, school taxes, fuel taxes, capital gains taxes, estate taxes, bridge and road usage taxes (tolls), corporate taxes, property taxes, Social Security taxes, utility taxes and even death taxes!
The debt and taxation frenzy we face today was among the great concerns to our Founders at the dawn of our republic. Thomas Jefferson said it best: "Considering the general tendency (of the federal government) to multiply offices and dependencies and to increase expense to the ultimate term of burden which the citizen can bear, it behooves us to avail ourselves of every occasion which presents itself for taking off the surcharge; that it may never be seen here that, after leaving to labor the smallest portion of its earnings on which it can subsist, government shall itself consume the residue of what it was instituted to guard."
I'll say it again: Now that we have new representatives, it's time to advance immediately on them and address the issue that can both rebuild our economy and relieve us of government oppression: tax reform.
(In my next article, I will show how the U.S. can do away with the Internal Revenue Service and replace it with a far more inexpensive taxation system that is equitable for all.)
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