The Ignorant Investor
Ignorance Can't Stand in the Way of My OpinionWednesday, October 19, 2005
Taxes Are Going Up For Many, For Even More Soon
Can't talk. Work to do. Will be quick. Here's the opening from Tom Herman's column in today's Wall Street Journal:
More taxpayers will be ensnared by the rapidly expanding alternative minimum tax in 2006, and more than 11 million people will pay higher Social Security taxes. Additionally, many more people will face a much higher tax bill unless Congress extends a number of popular tax breaks that are due to expire at the end of the year.
No surprise. Government revenues, 2004=16% of GDP. Government spending, 2004=20% of GDP. Probability of cutting spending to equal revenue? 0%. Only option, raise revenues.
Expect lots of accounting tricks. Expect lots of talk about "squeezing the waste out of the bloated budget." But the talk won't come to anything. The need for more revenue always works out to collecting more in taxes. If the stock market shot upwards we would see a leap in revenues from capital gains tax receipts, but in how many years can the government rely on that to cover the cuts in the rest of the tax burden? It just doesn't work that way.
Make no mistake: the AMT is a middle-class tax increase. A tax increase on auto-pilot; a cynicism-inducing mechanism and a bizarre mockery of what government should be at a time when the Republican leadership and their wealthier Democratic cronies are talking about eliminating the estate tax, a move that would benefit a miniscule portion of the wealthiest individuals in America.
I try to keep politics off the blog, but, c'mon. At some point, it's just too much.
More taxpayers will be ensnared by the rapidly expanding alternative minimum tax in 2006, and more than 11 million people will pay higher Social Security taxes. Additionally, many more people will face a much higher tax bill unless Congress extends a number of popular tax breaks that are due to expire at the end of the year.
No surprise. Government revenues, 2004=16% of GDP. Government spending, 2004=20% of GDP. Probability of cutting spending to equal revenue? 0%. Only option, raise revenues.
Expect lots of accounting tricks. Expect lots of talk about "squeezing the waste out of the bloated budget." But the talk won't come to anything. The need for more revenue always works out to collecting more in taxes. If the stock market shot upwards we would see a leap in revenues from capital gains tax receipts, but in how many years can the government rely on that to cover the cuts in the rest of the tax burden? It just doesn't work that way.
Make no mistake: the AMT is a middle-class tax increase. A tax increase on auto-pilot; a cynicism-inducing mechanism and a bizarre mockery of what government should be at a time when the Republican leadership and their wealthier Democratic cronies are talking about eliminating the estate tax, a move that would benefit a miniscule portion of the wealthiest individuals in America.
I try to keep politics off the blog, but, c'mon. At some point, it's just too much.
posted by Worker 17 # 10:16 AM 
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