Well, the proposed tax increases are becoming clearer and true to the presidents pledge, they don’t affect those with incomes below $400,000 a year… sort of.
That’s if you agree that having one of the highest corporate total tax rates in the world and higher taxes overall on business does not have consequeces for consumers, workers and investors.
The higher tax revenue is being spent on new programs which create additional and growing liabilities, not on lowering the deficit or fixing Social Security or Medicare or the highway trust fund. In fact, at this point the new taxes will not even cover the new spending.
It’s quite interesting that in evaluating the risks of increased spending, increased deficits and debt and higher taxes, you can find a wide difference in opinion among economists. When looking at cost and revenue projects, you can find different assumptions and results among different government agencies.
It’s all a shot in the dark. Some naive people trying to do the right thing, some buying votes and political power. In the end, few of these policy makers and pundits will be around when we have the final results.
Why should we expect and more prudent behavior?
The actions by politicians reflect the attitudes and actions by most Americans when it comes to money. Live for today, charge it, save little or nothing, invest nothing for the future, set wants above needs, live above ones means.
The really sad part of all this is that Americans accept that this government largess can be provided and sustained by higher taxes only on higher income Americans and businesses. If that is the case, the United States will be the only country in the world to pull it off.