The Destruction And Resurection Of The Tax Base

Under Clinton, the number of Americans who paid absolutely no taxes was raised to 30%. Under G.W. Bush, that percentage was increased to about 40% through his tax cuts (Contrary to popular belief, the Bush tax cuts weren't just for the rich!) Now, with Obama having only been in office a little over a year, the number of Americans who won't pay any taxes has been raised to 47%.

In effect, each of these Presidents has destroyed the tax base to the extent that, now, almost half of all Americans are dependent on the other half to fund our government activities. At the same time, spending has been going through the roof. In fact, this current President and Congress have actually created more debt in one year than was created by almost all the other Presidents, combined. In a little over a year, the national debt has jumped from $10.4 trillion to nearly $14 trillion; a more than 30% rise in debt.

Realistically, you can't keep growing a class of people who live off the government and who don't contribute anything to it. At some point, there just won't be enough income from the other class who pay the taxes to keep our ship of state afloat. In effect, we are sinking that ship even more quickly under Obama and this Congress.

Right now, there is all this talk of adding a new, additional tax to our current plethora of taxation: The Value Added Tax (VAT). If implemented, it will be a tax that will force the price of almost everything we buy to go up by 20 to 30%. And, it is a tax will be totally blind to a person's economic stature; with the lower and lower middle classes being hurt the most.

Of course the true stupidity of this is that a VAT, if adopted, will completely reverse the destruction of the income tax base that had been taking place over the 17 years with the current and two previous Presidents and their Congresses. The sham promise of giving more and more Americans a better lifestyle by lowering and/or completely removing their income taxes will, in one fell swoop, evaporate when they have to pay 20 or 30% more at the cash register. Worse yet, many of those who had paid no taxes before may actually lose their jobs as a consequence of higher prices and the inevitable slowdown in retail sales. Further, expect more manufacturing jobs to leave the U.S. as American business are forced to go off-shore to a country without the tax; like China and India. Lastly, we will see another broken promise from this President. You know, that promise of not raising taxes on anyone making $250,000 or more. Of course the VAT is against our wallets and not our paychecks and that will be Obama's out. Sort of like that famous line: "It depends what the definition of is is."