Wednesday, April 07, 2010

More new taxes planned

History has clearly shown, the way to stimulate an economy is to lower taxes, and keep them as low as humanly possible. To accomplish this, Government must be kept small, and un-intrusive, because large and intrusive is more expensive.

With the passage of the Obamacare law, and the expiration of the Bush Tax Cuts, and increases in State, City, and County taxes there is progressively less money in the economy. Now, the idea is to pass additional taxes, to help make up for the record deficits that the Democrat Controlled Government is running up every day.

The next plan is a VAT or Value Added Tax. Strictly speaking, it's like a sales tax that is collected for the Federal Government.

Already, with the Obamacare taxes, people in 39 states stand to pay in excess of 50% of their income in taxes. That doesn't include the telephone tax originally begun to pay for the Spanish American War. Nor does it cover sales tax, Federal Fuel Taxes, or any other of the literally hundreds of taxes that the average citizen pays every single day.

Still more than half the income is being seized, and the argument is that it's only hitting the rich. Pfui. That's nonsense. We'll all be paying it. We'll all see our taxes go up, and our earnings go down. We'll see more hidden taxes, and with the VAT tax hitting literally everything you buy, expect the costs of things to go up by triple whatever the percentage is. An example if I may. If they announce that they are enacting a 10% VAT tax. That means that everything has that Value Added Tax put on it.

Now, the plant where it is manufactured has to pay 10% tax on all materials that they're using. For something relatively simple like a shirt, that is the material and the thread, and any expendable items like needles and other parts of the machines. Then that is moved to a packing unit, where the plastic and cardboard to ship it is also taxed at 10%. Then it's transported by truck, with the fuel costs also getting taxed by the same VAT in addition to the Federal Fuel Taxes already in place. The truck will eventually be replaced when it is worn out, and it, with the trailer, will also have similar taxes on all materials going into it's construction, and then it's final sale.

So that simple little 10% tax will in reality be a 30% increase in the cost of everything. Now your paychecks that are already looking a little thin, will look a lot thinner when it no longer can manage to afford food and housing, much less anything else, because you can't figure out how to stretch it 30% further to satisfy the hunger of the Federal Government.

We always hear how the Rich are just getting richer, how companies like Exxon are greedy for making profit producing petroleum products for us to use. Yet, the sad truth is that Exxon makes about 5 cents on a gallon of gas in profit. However, the Federal Taxes collected is 18.4 cents per gallon. More than three times the amount that Exxon gets in profit for actually drilling the hole in the ground, pumping the oil out, and then refining it into gasoline for us to use.

Why are we never asking the obvious question. If Exxon is so greedy making 5 cents per gallon, why isn't the Government three times as greedy for demanding 18.4 cents on something they had no hand in producing?

Find me a tax that the Government ever stops once it is started. The famous Telephone Tax is a good example. Every time it runs out, they find another excuse to put it back on since the Congress first decided it was a good idea during the Spanish American War. At the time, only the rich had the luxury item of a telephone, so only the rich would pay the tax. Now, we all pay it, and we wonder why our phone service is so expensive.

The conservative answer is obvious, historical, and simple. No new taxes by any name. Do in DC what the rest of us have to do all the time. Put off buying things we can't afford. Don't spend more than you have, and don't promise to spend more than you make regarding credit.

The rest of the households in the nation have to balance their budgets, and if families are sitting around the kitchen table trying to figure out what can be paid on the bills, and how they can afford to buy what they need, much less what they want. Washington can figure out how to do with less too. They got us into the mess, and it's time for them to make some hard choices on how to get out of it. We shouldn't be alone in our suffering and worries.


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