Debt and Taxes - The American Way

Just for fun at tax time, I thought I would indulge myself in a post about taxes and their affect on our finances.  It’s a touchy subject for me, because I despise the way our tax contributions are wasted by our Government.  But, I promise not to go into a rant.

I still believe there is a lot going right in America.    I am a patriotic American and I am proud to pay my fair share of taxes.  But, I consider it a crime the way our corrupt Government wastes our hard-earned tax dollars.  Our tax contributions should be spent wisely, for the benefit of our citizens and for the strength of our nation.

Steal from the Poor and Give to the Rich

Even worse than the waste and corruption, is the redistribution of wealth from the working class to the privileged.  I believe tax policies are largely responsible for the growing wealth disparity in America.  And, I’m not the only one who believes this.

“The taxation system has tilted toward the rich and away from the middle class in the last 10 years. It’s dramatic and I don’t think it’s appreciated. And I think it should be addressed.”  Warren Buffet

Although many tax loopholes have been closed and we have an Alternative Minimum Tax, the rich are getting richer for a reason.  The “Progressive Tax” system in our country is more than offset by special rules and tax preferences to large corporations and multi-national entities.  They simply don’t pay their fair share of taxes.

Corporate Welfare 

Another big problem I have is with is “Corporate Welfare”.  This is an unconscionable waste of our precious tax money to wealthy entities.  Here are some examples:

Energy Policy Act of 2005 Why did we give billions of dollars in grants and tax breaks to oil companies?  Do you really believe they are using this money to create alternate forms of energy?  Shouldn’t oil companies fund new research from their obscene profits?

FEMA No-Bid Contracts How is it possible for the same incompetent entities to receive no-bid Government contracts?  Even after they have questionable accounting for our tax dollars and fail to deliver the contracted services, they keep getting awarded contracts.  In Washington, it’s all about whom they know and pay off.

USDA 2007 Farm Bill Proposals – How much of the billions of dollars in farm aid goes to poor farmers, who are in danger of losing their farms?  The Bush Administration and many others in Congress support a $200K income limit for receiving farm subsidies, but special interests vigorously oppose it.  It will be interesting to see if reform happens.

Leading Us Into Debt

With the Federal Government 9 trillion dollars in debt, you would think they would be concerned about the state of our country’s finances.  After all, they seemed to be “concerned” that individuals are struggling with debt.  But, they don’t seem to be so concerned about the debt they are generating.  This is putting a burden on our future generations, which may be impossible to bear.  And, it’s bad for our National interests, because foreign entities own a lot of this American debt.  At the very least, it is costing a fortune in interest that we could be using to finance needed projects and services.

The worst part of the deficit spending may be the poor financial example our Government sets for Americans to follow.  Take for instance, the Economic Stimulus Act of 2008.  This is supposed to stimulate our economy, by giving spending money to cash-strapped people.  The reality of the stimulus program is that our Government is creating more debt, by giving away money they don’t have.  No one in our Government has the courage to stand up and call for fiscal responsibility during an election year.

Putting our Government on a Diet

Here is some shocking financial news for everyone.  The Government is going to have to go on a diet.  The Government needs to cut back on what they spend.  The country is in a recession, properties are in foreclosure and a lot of people are out of work. 

This means four things:

1 – Tax revenues are dropping and they will continue to drop.

2 – Americans can’t afford to pay higher taxes.

3 – The Feds can’t print any more money because of inflation.

4 – Investors are getting nervous about U.S. Bonds and Dollars.

The only logical conclusion is that budgets need to be cut at all levels of Government and some Government services will also be cut.  Special interests are already lining up to protect their entitlements.  But, their attempts may be futile.  The Federal Government is in a very precarious fiscal position and many State budgets are even worse off.

The Bottom Line

The Bottom Line is that our politicians are openly for sale to special interests.  And, this is going to cost you plenty in the form of taxes within your lifetime.  Either something has to change within our Government or our way of life in America may be threatened.  We are already slipping dramatically on the world stage and it’s not because of the efforts of hard-working American people and companies.  It’s because of powerful special interests, which are greedy and shortsighted.  Our politicians are guilty as accomplices.

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