As the presidential election heats up we hear continually the Democrats cry "fair share" and "tax cuts for the rich" and the Republican cry "cut spending" "cut taxes". Since all spending is a form of taxing I will take the high road. Cut the size of government and you need fewer taxes on the rich or anyone else for that matter. Art Laffer has been instrumental in helping explain via the "Laffer Curve" that increasing taxes "on the rich" actually decreses revenue. President Obama chalks this up to a fairness issue but the fact is "the rich", the top 10% pay 70% of all personal income taxes.
Leaving taxes aside for a second, let's talk revenue. The total revenue to the US Government is estimated to be 5.1 Trillion dollars in 2012. My vote would be to make Congress (and the President) keep spending within that estimate. Part of our problem has been and continues to be baseline budgeting which assumes baseline at last years spending and allows an increase over that number supposedly for inflation. This is how we get the GSA scandal and other reckless spending. No one looks at how they can reduce spending. They just see additional revenue in their budget each year and figure out ways to spend it. Baseline budgeting goes back to the Congressional Budget Act of 1974 and presently assumes a 6% growth rate. That is why whenever Congress talks about a "cut" it is never a reduction in spending but a reduction in the built in growth of spending. This growth in spending which is automatic has forced continual growth in taxing to keep up.
Government spends too much and therfore we are all taxed too much. By increasing spending when revenues were decreasing due to the recession we have built up a debt we cannot pay. Stop the madness. We need to get back to 0 based budgeting. Every department in the government should have to justify their spending for budgetary approval and Congress should not increase ANY spending until that happens.
This Presidential Election will be about big ideas. This is the biggest one and the most important one. Let us hope and pray that the smart people who want to be President can see that.
Leaving taxes aside for a second, let's talk revenue. The total revenue to the US Government is estimated to be 5.1 Trillion dollars in 2012. My vote would be to make Congress (and the President) keep spending within that estimate. Part of our problem has been and continues to be baseline budgeting which assumes baseline at last years spending and allows an increase over that number supposedly for inflation. This is how we get the GSA scandal and other reckless spending. No one looks at how they can reduce spending. They just see additional revenue in their budget each year and figure out ways to spend it. Baseline budgeting goes back to the Congressional Budget Act of 1974 and presently assumes a 6% growth rate. That is why whenever Congress talks about a "cut" it is never a reduction in spending but a reduction in the built in growth of spending. This growth in spending which is automatic has forced continual growth in taxing to keep up.
Government spends too much and therfore we are all taxed too much. By increasing spending when revenues were decreasing due to the recession we have built up a debt we cannot pay. Stop the madness. We need to get back to 0 based budgeting. Every department in the government should have to justify their spending for budgetary approval and Congress should not increase ANY spending until that happens.
This Presidential Election will be about big ideas. This is the biggest one and the most important one. Let us hope and pray that the smart people who want to be President can see that.
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