While many in the media were praising President Biden’s speech to Congress about his plans to spend as much as $6 trillion dollars in the next few years, Dr. Douglas Holtz-Eaton, the director of the Congressional Budget Office from 2003 to 2005, wrote an article entitled, The Fine Art of Making Things Add Up. In that article, he made these points:
- Mr. Biden said, “So how do we pay for my jobs and family plan? I made it clear, we can do it without increasing the deficit.” Dr. Holtz-Eaton says that does not add up.
- The president also said, “I will not impose any tax increase on people making less than $400,000.” Dr. Holtz-Eaton says that does not add up either.
- And lurking in the background are our old friends Social Security, Medicare, Medicaid, and the Affordable Care Act (ACA), none of which currently adds up budgetarily (and the President is proposing to expand Medicaid and the ACA). What happens in the next 4 years when the Medicare Trust Fund goes belly up, or in 10 years when the Social Security Trust Fund follows suit? Dr. Holtz-Eaton says none of that adds up.
While Dr. Holt-Eaton’s opinion is based on his experience and training, the economists who are advising President Biden are also giving an opinion based on their experience and training. However, there are many variables involved in economic forecasting, and different economists can reach widely differing conclusions based on how much importance each economist assigns to each variable.
Of course, there is a history in D.C. of the Ruling Class and their minions in Congress deliberately misleading or even lying to the American people. Of course, when that happens, they always say it’s for the people’s own good. The late Charles Krauthammer discussed the “lies” told by advocates of Obamacare.
- An October 2013 video shows MIT professor Jonathan Gruber, a principal architect of Obamacare, admitting that, in order to get it passed, the law was made deliberately obscure and deceptive.
- "Lack of transparency is a huge political advantage," said Gruber. "Basically, call it the 'stupidity of the American voter' or whatever, but basically that was really, really critical to getting the thing to pass."
- Worse was the pretense that Obamacare wouldn't cost anyone anything. On the contrary, it's a win-win, insisted President Barack Obama, promising that the "typical family" would save $2,500 on premiums every year.
- Skeptics like me pointed out the obvious: You can't subsidize 30 million uninsured without someone paying something.
- Gruber admits, Obamacare was a huge transfer of wealth — which had to be hidden from the American people, because "if you had a law which ... made it explicit that healthy people pay in (to the system) and sick people get money, it would not have passed."
- Now it's not unconstitutional to lie. But it is helpful for citizens to know the cynicism with which the massive federalization of their health care was crafted.
President Biden was very involved with the various activities of the Obama administration in misleading or, some say, even lying to the American people about ObamaCare. President Biden was elected to the U.S. Senate in 1972 at age 29 and left the Senate 36 years later to become Vice-President in 2008. He firmly believes in the government’s ability to produce results. Therefore, it is not difficult to assume that the economists advising him will want to provide answers that fit the narrative he is promoting.
In President Biden’s view, all of his proposed spending will be paid for by couples making over $400,000 per year, and those making over $1 million per year will see their capital gains rate more than double from the current 20% to over 43%.
An article published by PJ Media discussed a study by the University of Pennsylvania’s Wharton Business School about the effects of raising the capital gains tax from 20% to 39.6%. They were particularly interested in whether or not such an increase would raise the promised $1.7 trillion from the rich who have not been paying their “fair share”. Some key points from that study:
- “We don’t think that the proposal has a lot of teeth,” said John Ricco, director of policy analysis at the Penn Wharton Budget Model, a non-partisan fiscal policy research group at the business school. “There are a lot of games you can play to avoid paying this tax.”
- Wharton’s researchers, however, believe that once an increase in the capital gains rate is passed, wealthy Americans would simply avoid selling stocks and other investments.
- The wealthy could also minimize their taxes by pairing gains in years when they have losses elsewhere in their portfolio, effectively lowering their taxable net gains for the year. Another strategy could be to sell off investments slowly over time to minimize the amount of tax owed in any one year.
- “Capital gains is a discretionary tax,” Ricco said. “It is not like taxes you pay on income. You get to decide when you sell your investments, and therefore when you pay the tax.”
- Will be passed on to consumers in the prices of goods and services?
- Will be paid by workers who will not see wage increases?
- Will be paid by workers who get laid off?
- Will be paid by job seekers who can’t find a job because the capital needed for expansion is not available?
However, with the FAIRtax, people will clearly see how much the government is costing them. It will be printed on every receipt for new goods and services.
John F. Kennedy had some advice that is as relevant today as it was 60 years go. He said “The ignorance of one voter in a democracy impairs the security of all.”
The easiest way for all of us be less ignorant is to understand how much things cost, and the FAIRtax helps us do that. If Congress and the President want to tell us that their spending programs are being paid for from taxes collected, then they need to show us that the FAIRtax rate will actually cover the costs. It is simple math that any of us can do with a basic calculator.
If tax revenues aren’t enough to finance their spending programs, Congress and the President need to let taxpayers know that their spending is being financed with borrowed money. In other words, they are shifting the burden of paying for today’s spending onto our children and grandchildren.
It is that simple and that is why the Ruling Class and their minions in Congress don’t like the FAIRtax. They want us to be ignorant.
It is time that Americans take control of our country by eliminating the income/payroll tax system. No more games that profit only the Ruling Class and their minions the politicians. ENACT THE FAIRTAX!
If you have friends who don’t know about the FAIRtax, send them to FAIRtax.org. Have them watch the white boards under “How It Works” and, if they agree, ask them to please join us.
Then contact your Members of Congress and the President and demand that Congress pass -the FAIRtax—the only fair tax.
Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:
“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
Is it hopeless? When confronted with a seemingly impossible problem, remember the statement attributed to the author George Bernard Shaw who wrote, You see things; and you say “Why?” But I dream things that never were; and I say “Why not?”
Isn’t it time for us to ask, “Why not?”