New Speak On Taxes

We have a tax rate currently in place. It was established after the previous administration enacted sweeping tax reductions. Those tax cuts of the Bush administration reached all levels of working society in America, but the reluctance of the opposition party to deny themselves all of the benefits of having big bags of money to dispense to their constituents led to a "sunset" provision that in ten years those tax cuts would expire. But, in all normal applications of our language, those were cuts in taxes.

Now the Congress postures, but doesn't act. They passed no budget but they strewed the landscape with federal tax dollars largely from the empty bag of money which they magically deny has a limit. The give-aways didn't gain them love. Now they are faced with a conundrum.

They can admit that spending has a relationship to revenue. That would be scary stuff! They can continue to increase their spending by increasing our deficits and our national debt. Scarier still. They could allow the Bush tax cuts to expire and thereby collect taxes at higher rates, but in the process they will suck money for jobs, growth and development out of the economy and effectively reduce federal revenue. Or they could simply extend the current tax rates for a reasonable period or even indefinitely.

But that means people who are going to receive the greatest crotch kick from failure to act will be the same people who actively work to vote the Democrats out of office. Seems like they need to administer that kick simply to feel good about themselves. Apparently their answer is to preach class warfare and extend current tax rates only for those at lower income levels. Those people don't hire others, they don't own businesses and they don't make significant investments with their money but they do exist in large numbers and that means voters.

The real catch is that keeping the tax rate where it is can not be called a CUT! A cut is when you pay less than you do now. A rise in tax is when you pay more. Keeping tax the same does not put a dollar in your pocket that wouldn't otherwise have been there. So, these adjustments are now called the Obama Middle Class Tax Cuts. Language is a wonderful thing.

Notice, however, that Congress has NOT acted. They won't act before the election. They promise they will but after November 2nd they have no motivation to follow through. None at all. Vote for the Dems because they say they will maintain your taxes at the level they are now? I doubt it.

Here's a real analysis with real numbers from a respectable source on what the failure to act will mean:

Mom, Pop and Baby Take a Big Hit

Still think it doesn't make much difference? Those numbers resonate with me. SWMBO and I each have an earned retirement, we each receive a Social Security pittance, we each continue to work and earn money to maintain our comfortable life style. We earned what we have, we didn't inherit it, steal it or cheat someone out of it. I want to keep as much of it as I can.