ToDaZeD WASoF
sumbuddy stop him...
The U.S. Senate voted Thursday night to approve President Barack Obama’s $3.5 trillion spending plan.
The claim to reduce the deficit by half compares this year’s immense (mostly inherited) deficit to the projected fiscal year 2013 deficit, the last of his current term. While it is technically correct that the deficit would be less than half this year’s engorged level, a do-nothing budget would reduce it by 84%. Compared to do-nothing, Mr. Obama’s deficit is more than two and a half times larger in fiscal year 2013. Just his addition to the budget deficit, $459 billion, is bigger than any deficit in the nation’s history. And the 2013 deficit is supposed to be after several years of economic recovery, funds are being returned from the financial bailouts, and we are out of Iraq.
Finally, what of the claim not to raise taxes on anyone earning less than $250,000 a year? Even ignoring his large energy taxes, Mr. Obama must reconcile his arithmetic. Every dollar of debt he runs up means that future taxes must be $1 higher in present-value terms. Mr. Obama is going to leave a discounted present-value legacy of $6.5 trillion of additional future taxes unless he dramatically cuts spending. (With interest the future tax hikes would be much larger later on.) Call it a stealth tax increase or ticking tax time-bomb.
Yeah. “Dramatic spending cuts.” That’s gonna happen. So what does this mean on an individual basis?
If spread evenly over all those paying income taxes (which under Mr. Obama’s plan would shrink to a little over 50% of the population),
Which is an important failure for future [D] votes: those who don’t see the taxes they pay *cough*Fair Tax plug*cough* are quite unlikely to take taxes into consideration when voting. They’re gonna vote themselves “pay” raises instead.
every income-tax paying family would get a tax bill for $163,000. (In 10 years, interest would bring the total to well over a quarter million dollars, if paid all at once. If paid annually over the succeeding 10 years, the tax hike every year would average almost $34,000.) That’s in addition to his explicit tax hikes. ...
We can get a rough idea of who is likely to pay them by distributing this $6.5 trillion of future taxes according to the most recent distribution of income-tax burdens.
Some numbers to keep in mind:
For Tax Year 2006:
The top 1% of earners pay 39.89% of Federal Personal Income TaxTop 5% 60.14%
Top 10% 70.79%
Top 25% 86.27%Top 50% of earners pay 97.01% of Federal Personal Income Tax
...But it also turns out that Mr. Obama’s massive additional debt implies a tax hike, if paid today, of well over $100,000 for people with incomes of $150,000, far below Mr. Obama’s tax-hike cut-off of $250,000. (With interest, the tax hike would rise to more than $162,000 in 10 years, and over $20,000 a year if paid annually the following 10 years). In other words, a middle-aged two-career couple in New York or California could get a future tax bill as big as their mortgage.
Oh what’s that word the Progressives use to measure the validity of any new enterprise? It was on the tip of my fingers a minute ago… What was it.... Oh yeah: Sustainable
Ay, well—maybe that measure only applies to smelt.
Continuing this trend, by the year 2109, there will be only one taxpayer left in the country. Trillionaire Mr Arthur Blodczinczky will be in the 99.9% bracket, but luckily, this is enough to fund the entire national budget, including salaries of Senators and Congressmen, recently declining to vote down legislation giving themselves their 43rd annual raise of 12%.
“$6.5 trillion...”? That does not compute. Numbers like that exist only outside of astronomy books.
Maybe smarter folks than I can figure out how spending $3.5 trillion is going to get us out of a $459 billion deficit.
Here’s another visualization for a trillion $$: imagine a chain of $1 bills, end to end. That chain would make 400 separate links from Earth to Moon.
Posted by ZZMike on 04/03/09 at 10:00 AM
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