The day after the U.S. has elected a new President and is faced with dealing with the economy and the promises made to the voters. Consider this example to illustrate the coming year/s.
You have 100 taxpayers , 10 are rich ( making over 250K ) , 50 are middle income ( they pay taxes ) and you have 40 ( that are currently not paying Federal Income Tax ....that apparently is the present scenario ). A candidate has promised to reduce taxes to 90% of the taxpayers and increase taxes for the 10 Rich Taxpayers ( over 250K ).
Does that mean the 10 pay more , 50 pay less and 40 ( who pay nothing ....get money back from the Federal Government )?
The elected candidate has promised to increase Corporate Taxes ( currently the U.S. is second only to Japan in having the highest tax rate on Corporations in the world ). Further the candidate has promised to increase taxes on Capital Gains ( my assumption is that the candidate is under the impression that everyone is making a ton of money to tax ).
Now add in the following reality....Governments work on assumptions ( Anticipated Revenues ) meaning they project what they anticipate to have ( taxes ) and budget accordingly to the anticpated revenues. HOLD IT RIGHT THERE......using something very simple the Federal Government earns revenues ( taxes ) from each litre/gallon of gas we buy at the pumps. Pump prices increase and demand go up...Government earns more revenue. Go back to Anticipated Revenues.....Gas prices have declined and demand has fallen. OOPPS. They anticpated to earn XXX dollars in revenue and they have or are going to spend those monies. PROBLEM....the government does not have the revenue so what happens , they run a DEFICIT.
This morning in Canada our newly elected Conservative Government has announced they expect to run a deficit and are concerned that they will not have have the revenues ( taxes ) to fund new and existing programs.
I have attempted to simplify the examples for the discussion but I suspect that the voters / taxpayers throughout the West are in for some very unpleasant surprises.
I know what you’re saying. Here’s another thing to consider…ignore what the candidates are saying about taxes, spending, etc. They can’t possibly cut ANY taxes or increase spending without adding on massive deficits. My guess…4 more years and no real changes, regardless of the president. This is usually what happens. And the problem is voters don’t really get that. Even worse, candidates can’t possbily get up there and say "well, we’re running huge deficits, so you guys are all going to have to keep paying taxes…maybe more."
And on yo9ur first example…Obama is betting that he can alienate only that 10% of rich voters (or less), and appeal to the vast majority of the country that makes under 250K. My guess - nothing he says will get done. His party is full of shlt, and they know it.
Social Security recipients just got a 5-plus percent hike in their benefits.
Most federal spending is entitlements like SS and Medicaid and Medicare. Very little is discretionary.
I’m reading some economists and Democratic policy advisors recommend even MORE deficit spending to get us out of the coming recession.
The question in my mind right now is where this will lead. The currency will have to be devalued, right? The only way to pay back trillions in debt is to make a dollar worth 50 cents, right?
Please read dis here link below…
Who says history do not repeat itself ya’ll is mad stupid.
I think that is exactly where I am going. Deficits , devaluation of ie. Canadian , U.S. Dollar/s , Euro , Pound Stirling etc. and where does that lead to…right back to promises and the absolute inability to deliver. No politican can produce…next election some weary voters will be saying goodbye to the party in power in many countries.
Is it possible ta tax 125% o’ uh persons income?
I guess we’s may find out in January otay buh-weet
Bring back the Gold Standard.and don't worry, when I get my next stimulous check, I'll split it up and send it back to everyone I know that makes more than 250k... "Concentrated power has always been the enemy of liberty" -Ronald Reagan