August 2015, Part 5, Political Class Insanity: Hillary's $600 Haircut, Presidential African Ego Trips, and More

At the beginning of each month we take a week or so to review the latest insanity from the American political class. Insanity from them includes a wide range of very depressing actions which can include wasteful spending, idiotic quotes, an inefficient and ineffective government bureaucracy, failed economic policies, etc. Every month we continue to prove that we are being served by the worst set of politicians ever.

And as you will see, this month’s review and discussions do nothing to prove that this thesis is wrong in any way:

1) We have already discussed the following statistics in a previous post that come from a phone survey conducted for the American Institute of CPAs (AICPA) by Harris Poll in March among 1,010 American adults. We repeat it here in our insanity series for two reasons. 

First, as we discussed previously, the Washington political class and the Obama administration have done such a lousy job at managing and growing the economy that millions of Americans are being forced to postpone life affecting decisions, given the uncertainty in their minds and their wallets relative to the economy. Specifically, the survey found that many Americans are delaying, for financial reasons, decisions involving: 

• Higher Education (24 percent delaying in 2015, compared to 11 percent in 2007)
• Buying a Home (22 percent delaying in 2015, compared to 14 percent in 2007)
• Medical Procedure (19 percent delaying in 2015, compared to 9 percent in 2007)
• Retirement (18 percent delaying in 2015, compared to 9 percent in 2007)
• Having Children (13 percent delaying in 2015, compared to 5 percent in 2007)
• Marriage (12 percent delaying in 2015, compared to 6 percent in 2007)

Thus, despite what Obama might be claiming about his stewardship of the economy, Americans quality of life is suffering as they deny themselves the opportunity to own a house, get a better education, get needed medical care, etc. In other words, the current set of American politicians are delaying and/or denying the American dream to millions of Americans because these politicians have no idea how to manage and grow a robust economy.

Second reason we are revisiting the these numbers is that they were part of a larger article that appeared on the Affluent Investor website. After discussing the above numbers and realities, the article went on to show a hypothetical Chinese economic class in the future where the instructor explains how the great United States of America collapsed, not because of a war or famine, but because the Washington political class had no financial, economic, or budgeting skills, resulting in the economic ruin of the greatest democracy ever. 

The video and article can be accessed at:

http://affluentinvestor.com/2015/07/a-record-number-of-americans-fear-an-economic-crash-and-our-adversaries-have-noticed/#LIq7pvHoX2qQ27Py.99

The insane thing about the video is that it is probably accurate and highly likely to come true, a scenario that was unthinkable just a few years ago.

2) Hillary Clinton is running for President and during the early stages of her campaign we have seen some pretty anemic attempts by her and her campaign to try and prove to a skeptical American public that she is one of the people, in touch with the needs of the common citizen, that she feels our pain and identifies with our struggles.

Of course, this is all total political bs, Hillary could not be any further out of touch with our struggles:

• Her family’s net worth is probably approaching the $100 million level.
• She travels in a luxury private jet wherever she goes. 
• She insists on only the best hotel suites when traveling with nearby suites for her entourage.
• The multi-million dollar wedding she threw for her daughter was ranked among the five most expensive weddings EVER.
• She regularly attends political fund raising dinners and events that cost tens of thousands of dollars to attend.
• She has been seen and photographed shopping at only the most exclusive stores in NYC.

Now, according to multiple news sources, she recently got a haircut...a haircut that likely cost her $600 or so at an exclusive salon in the exclusive Bergdorf Goodman high end retail store. That is a week’s salary for someone making $15 an hour.

If you have enough money to get a $600 haircut, more power to you, do anything you want with your own money. But please do not try to tell me you are one of the common people because common people do not get $600 haircuts or ride in luxury private jets or drop millions of dollars on their daughter’s wedding, etc. Please give us a little credit for being able to see through your political spin and condescension.

3) President Obama recently visited a number of African countries. Not saying any President should not visit foreign lands but his visit was to such places as Kenya and Ethiopia, countries that are a nit relative to the United States economy, national defense, social interactions, or anything relative to most American lives. In other words, this trip was totally unnecessary.

Even though unnecessary, aside from feeding the President’s personal need to visit the homeland of his ancestors, something he could do in two years on his own money and not the taxpayers’ money, the taxpayer still got screwed. According to the National Taxpayers Union, just the cost to operate Air Force One on this unnecessary trip was just under $6 million. 

This figure does not include every other incremental expense that is involved with a Presidential trip, even the unnecessary ones. The National Taxpayers Union estimates that those extra expenses will add tens of millions of dollars onto the total expense of the trip. When Obama took his family on a weeklong trip to sub-Saharan Africa in 2013, the estimated total cost of that trip was put at between $60 million and $100 million. On that 2013 trip, the Secret Service’s hotel costs alone totaled $953,788.

The National Taxpayers Union Foundation now says that Obama is now tied for most international trips by a President through July of his seventh year in office. He is tied with Bill Clinton with 41 trips, although Clinton stayed abroad longer, 178 days, compared to 161 for Obama.

We go through all of this to make the point that thousands and thousands of our veterans are not getting the needed medical care they were promised, millions of Americans are hungry, homeless, or addicted, and our schools still stink at educating our kids. $60 to $100 million could go a long way to making the lives of a lot of Americans better rather than wasting it on unnecessary, ego driven trips to countrys that have little or no strategic value to America. Insanely bad priorities.

4) Let’s circle back to Hillary Clinton’s campaign and spin and condescension. John Podesta, one of Hillary’s main campaign gurus, recently claimed in a fund raising letter that Republicans are funding their presidential candidates with “a ferocious onslaught of dark money,” i.e. rich people are funding the Republicans. He went on to claim that Hillary is being funded by small dollar donors. Which is always the case with HIllary, either a gross exaggeration or an outright lie.

Why? Campaign finance reports show that Hillary’s campaign pulled in $46.7 million in campaign donations in the first quarter of 2015 from about 250,000 donors. In Podesta’s fundraising letter, there are boxes to check if you want to donate $1, $5, or $10 as far as small donations. 

The DC Caller did an interesting analysis where they assumed that every one of those 250,000 donors sent in $16 , which is the sum of $1 + $5 +$10. If Hillary was getting much of her money from small donors, regular type American citizens vs. the supposed fat cats that are donating to Republicans, then she would have collected about $4 million, leaving her about $42 million short of what she actually did pull in. In other words, rich people are accounting for a large portion of Hillary’s campaign cash also.

Reporting by the Washington Post supports that conclusion also. It found that: “Donations under $200 made up just under 17 percent of Clinton’s total raised.” The DC Caller reporting concludes: “That means the vast majority of the Clinton campaign cash has come from bigger individual donors, or so-called “bundlers.” This clearly shows the “grassroots,” small donor claim made by campaign chairman Podesta is far from an honest representation of the truth.” Far from the truth, no surprise there.

5) One last piece of political insanity for today. Obama and his Secretary of State John Kerry recently reached a tentative deal with Iran to curb Iran’s nuclear weapons ambitions. We will not go into the details of this horrendous deal today, it’s pitfalls and potential horrors could take days to discuss.

All you have to know about this potential deal is that Nancy Pelosi has called it a “diplomatic masterpiece.” This is the same person who made the fabulously inane statement that Congress had to pass the Obama Care legislation so that Congress and America could find out what was in it, as if reading it first before voting on it was some type of foreign process to her. 

This is the person who boldly stated that: “Obama Care Will Probably Save Taxpayers More than a Trillion Dollars.” Nevermind that Obama Care is likely to add trillions of dollars to the deficit and that Americans are seeing substantial increases in their health insurance costs.

This is the economic wizard who once stated: “Every dollar invested in this initiative [extending unemployment benefits (UI)] yields $1.52 in economic growth, and an extension of UI could produce as many as 300,000 jobs.” In other words, the more unemployed people we have collecting unemployment benefits the more jobs will be created. Huh?

And this final gem: “Every month that we do not have an economic recovery package 500 million Americans lose their jobs.” Given that there are just over 300 million people in America today, it is highly doubtful that 500 million are losing their jobs every month.

Given these quotes and her assertion that the Iran arms deal is a “diplomatic masterpiece,” you have to figure that the deal is the worst piece of diplomacy the United States has ever developed. Betting against Nancy Pelosi is almost always a sure winning position.

The insanity keeps on rolling in, from Nancy Pelosi fantasies to Presidential ego trips to Africa to $600 haircuts, you cannot make this stuff up. More insanity tomorrow and for at least several days after that.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

Day 6: An Eight Part Series Of Logic And Sanity That Prove Raising Taxes On Any American Is Just Plain Stupid

This is the sixth in a series of posts that prove without a doubt that President Obama’s insistence at raising taxes on certain Americans, in this time of lousy economic performance, is short sighted, boneheaded, and idiotic. The Federal government that President Obama oversees as chief of the executive branch wastes hundreds of billions of dollars every year, as we have documented and discussed over the past five days:

• Social Security, Medicare, and Medicaid waste well over $200 billion a year due to wasteful spending, inefficient operations and widespread criminal fraud.
• The IRS admits that it fails to collect over $380 billion a year from tax evaders across the country.
• The President’s own deficit reduction commission identified over $100 billion a year in Defense Department spending that could be eliminated without endangering our national defense.
• This week we have pointed out examples of billions of dollars being wasted in the past few years by many Federal departments including the Navy that spent $300 million dollars on two ships it never used, the State Department that spent $80 million on an Afghan consulate building it will never use, the TSA that has almost $200 million in airport security equipment sitting in warehouses it will never use, etc.

Yes, every level of government in this country and its occupying political class faction spend and waste far too much taxpayer wealth for the benefits taxpayers receive back. But how much in taxation do we pay? That is our topic today, a documenting of how far reaching and disgusting the taxation level in this country has become. After understanding the extent of this oppression, you decide whether or not we are getting good value for the oppression.

Rather than review some of our past posts as we have done in the five previous parts of this series, consider the PARTIAL list of taxes that Americans pay, as compiled by:

http://www.blacklistednews.com/Show_This_To_Anyone_That_Believes_That_Taxes_Are_Too_Low/22964/0/38/38/Y/M.html


#1 Building Permit Taxes

#2 Capital Gains Taxes

#3 Cigarette Taxes

#4 Court Fines (indirect taxes)

#5 Dog License Taxes

#6 Drivers License Fees (another form of taxation)

#7 Federal Unemployment Taxes

#8 Fishing License Taxes

#9 Food License Taxes

#10 Gasoline Taxes

#11 Gift Taxes

#12 Hunting License Taxes

#13 Inheritance Taxes

#14 Inventory Taxes

#15 IRS Interest Charges (tax on top of tax)

#16 IRS Penalties (tax on top of tax)

#17 Liquor Taxes

#18 Luxury Taxes

#19 Marriage License Taxes

#20 Medicare Taxes

#21 Medicare Tax Surcharge On High Earning Americans Under Obamacare

#22 Obamacare Individual Mandate Excise Tax (if you don’t buy “qualifying” health insurance under Obamacare you will have to pay an additional tax)

#23 Obamacare Surtax On Investment Income (a new 3.8% surtax on investment income that goes into effect next year)

#24 Property Taxes

#25 Recreational Vehicle Taxes

#26 Toll Booth Taxes

#27 Sales Taxes

#28 Self-Employment Taxes

#29 School Taxes

#30 Septic Permit Taxes

#31 Service Charge Taxes

#32 Social Security Taxes

#33 State Unemployment Taxes (SUTA)

#34 Tanning Tax (a new Obamacare tax on tanning services)

#35 Telephone Federal Excise Taxes

#36 Telephone Federal Universal Service Fee Taxes

#37 Telephone Minimum Usage Surcharge Taxes

#38 Telephone State And Local Taxes

#39 Tire Taxes

#40 Tolls (another form of taxation)

#41 Traffic Fines (indirect taxation)

#42 Utility Taxes

#43 Vehicle Registration Taxes

#44 Workers Compensation Taxes

#45 Federal Income Taxes

#46 State Income Taxes

#47 Local Income Taxes

Granted, not all Americans pay all of these taxes. However, I would bet most Americans pay at least a dozen of them as they go through life. I pay at least twenty of these taxes and I bet you do also.

But the insanity does not stop in just the amount of things we pay taxes on or for. The article from www.blacklisted.com goes on to review some more insanity of our taxation oppression (the link above contains additional links that verify the accuracy of the following assertions):

1. Thanks to Proposition 30, many high income residents of California will be paying marginal income tax rates of 51.9% in 2013 if the fiscal cliff is not avoided. Keep in mind that the 51.9% figure only includes federal and state income taxes. It does not count any of the dozens of other taxes that we pay each year. Thus, some Americans in California will be paying more than half of their income at some point to dysfunction government entities in Sacramento and Washington.

2. If a fiscal cliff deal is not reached, many residents of New York and Hawaii will also be paying marginal income tax rates of more than 50%.

3. If Americans fully funded the government through their taxes without any government borrowing, the average American would have to work for 197 days just to meet the expenses incurred by government. This is not taxation, this really is approaching slavery when you have to work 197 days out of the 250 days a year to pay for government expenses.

4. The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long. This is a prime reason why tax evasion is so high, too many loopholes, too much complication.

5. According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with Federal tax requirements each year. Imagine what our society would look like if all of that time was spent on more economically profitable activities.

6. 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.

7. There have been 4,428 changes to the tax code over the last decade. This comes out to 1.2 tax changes EVERY DAY for ten straight years. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.

8. According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.

9. Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.

10. In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.

11. The IRS spends $2.45 for every $100 that it collects in taxes. That is incredibly inefficient.

12. According to The Tax Foundation, the average American has to work until April 17th just to pay federal, state, and local taxes. Back in 1900, “Tax Freedom Day” came on January 22nd.

13. When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.

14. Residents of New Jersey pay $1.64 in taxes for every $1.00 of federal spending that they get back.

15. The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.

16. According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.

17. Warren Buffett had an effective federal income tax rate of just 17.4% for 2010.

18. The top 20% of all income earners in the United States pay 86% of all federal income taxes.

19. Sadly, you could take every single penny that every American earns above $250,000 and it would only fund about 38% of the Federal budget.

20. The United States has the highest corporate tax rate in the world (35%). In Ireland, the corporate tax rate 12.5%. This is causing thousands of corporations to move operations out of the United States and into other countries.

21. Some tax havens are doing a booming business in setting up sham headquarters for U.S. corporations. For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.

22. In 1950, corporate taxes accounted for about 30 percent of all federal revenue. In 2012, corporate taxes will account for less than 7 percent of all federal revenue.

23. In a previous article, I discussed how many of our largest corporations make huge profits and yet pay less than nothing in taxes….

What U.S. corporations are able to get away with is absolutely amazing.

The following figures come directly out of a report by Citizens for Tax Justice. These are combined figures for the tax years 2008, 2009 and 2010.

During those three years, all of the corporations below made a lot of money. Yet all of them paid net taxes that were below zero for those three years combined.

How is that possible? Well, it turns out that instead of paying in taxes to the federal government, they were actually getting money back.

So for these corporations, their rate of taxation was actually below zero.

If you have not seen these before, you are going to have a hard time believing some of these statistics…..

*Honeywell*

Profits: $4.9 billion

Taxes: -$34 million

*Fed Ex*

Profits: $3 billion

Taxes: -$23 million

*Wells Fargo*

Profits: $49.37 billion

Taxes: -$681 million

*Boeing*

Profits: $9.7 billion

Taxes: -$178 million

*Verizon*

Profits: $32.5 billion

Taxes: -$951 million

*Dupont*

Profits: $2.1 billion

Taxes -$72 million

*American Electric Power*

Profits: $5.89 billion

Taxes -$545 million

*General Electric*

Profits: $7.7 billion

Taxes: -$4.7 billion

Are you starting to get the picture?

24. Exxon-Mobil paid $15 billion in taxes in 2009, but not a single penny went to the U.S. government.

25. If Bill Gates gave every single penny of his entire fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.

26. The number of traffic accidents spikes each year right around April 15th. The following is from a recent Bloomberg article….

Deaths from traffic accidents around April 15, traditionally the last day to file individual income taxes in the U.S., rose 6 percent on average on each of the last 30 years of tax filing days compared with a day during the week prior and a week later, according to research published in the Journal of the American Medical Association.

27. The elite are not stupid. They are not just going to sit there and let our politicians tax them into oblivion. In fact, many of them will openly cheat if that is what it takes to avoid taxes. Most of them have become masters at avoiding taxes or they have hired people that do that kind of work for them. According to the IMF, the global elite are holding a total of 18 trillion dollars in offshore banking havens such as the Cayman Islands.

28. It has been reported that 80 percent of all international banking transactions involve offshore banks. A whopping1.4 trillion dollars is being held in offshore banks in the Cayman Islands alone.

29. An article that appeared in the Guardian estimated that a third of all the wealth on the entire planet is being kept in offshore banks. One of the primary reasons for this is tax avoidance.

30. If a deal is not reached and the “fiscal cliff” is not avoided, the average American taxpayer can expect to pay about $3,500 more in taxes next year.

Too many taxes, too many tax evaders, too little benefit from government services. No matter how much Obama taxes the rich, it will be a drop in the bucket relative to our annual deficit spending and our overwhelming national debt.

THE GOVERNMENT AND THE POLITICIANS THAT OPERATE IT SPEND AND WASTE TOO MUCH OF TAXPAYER WEALTH. We have a government out of control problem, not an under taxation problem. We have pointed out in the past, that even if you taxed millionaire earners in this country at 100%, you would not come close to eliminating Obama’s annual deficit spending never mind making a dent in the national debt.

Why? Because according to recent IRS data, there are only about 239,000 Americans earning over a million dollars a year. They comprise only about .14% of all income tax filers in the country.

We have pointed out in the pass that even if the government confiscated and monetized the total wealth, not income, of the richest people in this country, you would not come close to funding one year’s worth of Federal government operations and less than 15% of the national debt. You cannot fix this country by raising taxes, only by drastically reducing spending.

And Friday we will show you how to do that. We have found a way, leveraging the work of some very smart Americans, to take $9 TRILLION out of our national debt over the next ten years with relatively little pain to most Americans. It is relatively easy to do since most of the analytical work has already been done. Just seems that our political class is not capable of understanding basic math and basic logic.

I leave you today with these parting, and oh so true words: “The politicians don't just want your money. They want your soul. They want you to be worn down by taxes until you are dependent and helpless. When you subsidize poverty and failure, you get more of both.” James Dale Davidson, National Taxpayers Union

Dozens of taxation processes, over 50% marginal tax rates, $16.3 TRILLION in crushing debt, billions of dollars wasted every day, divisive class warfare, tax freedom days that get longer and longer, gross tax evasions, all to fund a dsyfuncitonal government. "Soul crushing" sounds about right with President Obama the lead soul crusher.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w

Taxes, Fairness, and Utopia

Hardly a day goes by lately without President Obama or some leader in the Democratic Party claiming that the Bush tax cuts for those Americans making more than $250,000 a year need to be restored in order to make our income tax system "fairer." They seem to think that they know best how to measure what "fair" is and that involves making the wealthier pay more than they have paid over the past eight years or so.


Now, you may think that those making more than $250,000 a year need to pay more in taxes and that's fine, it is your opinion. However, there is another aspect to "fair" that Obama and many politicians seem to overlook:

• According to the Tax Foundation, in 2006, before the recession hit, a whopping 41% of American Federal tax filers paid nothing in Federal income taxes or actually got a check from the Federal government in addition to paying nothing in income taxes.
• According to the Tax Policy Center of the Brookings Institute in cooperation with the Urban Institute, in 2009, after the recession, 45% of American tax filers paid no Federal income taxes.
• According to an April, 2010 Associated Press report, in 2009, 10% of American tax filers accounted for about 73% of all Federal income taxes.
• According to the National Taxpayer Union, in 2008, 1% of Americans paid for 38% of all Federal income taxes, 5% paid for 59% of all Federal income taxes, and 10% paid for 70%.
• During the Bush administration years, the number of American tax filers not paying anything in Federal income taxes rose dramatically from the long term average of about 25% to the current levels of about 45%, indicating that not only did the wealthier benefit from the Bush tax cuts but about 20% of the U.S. population went from paying income taxes to getting money for filing taxes.

Some people would say that although almost half of the households and tax filers did not pay Federal income taxes, they did have to pay a myriad of other taxes including Medicare, Social Security, sales taxes, and state and local income taxes. This is true, but so did those that actually paid Federal income taxes, they also had to pay all of these other taxes. 

If Obama and his crowd want to talk fairness, I find it a little hypocritical that almost half of the adults in this country can get a free ride on Federal tax expenditures on such things as education, defense, infrastructure, FEMA, government agencies such as the SEC, FAA, FCC, etc. and other Federal government services. They paid no taxes to fund these services yet get all of the advantages of using them. In most logical and fair thinking people's minds, that is not fair, it is called freeloading.

Again, if you think that the wealthier in this country need to pay more in income taxes, that is your right and your opinion. However, it is also my right to believe that if you are receiving something of value, you should be paying for that value. The bigger issue has to do with the suicidal path we are on as it applies to our fiscal solvency as a nation. If half of the country is not feeling the pain of deficit spending, why should they get excited about fixing the problem? Life is good the way it is from their perspective. This is not conducive to solving our national debt problem.

This is where the utopia reference comes in. In a a fair and just world, everyone pays their fair share. However, we do not live in utopia and fair is a very subjective measure. Republicans would look at the above numbers and say that those paying the load of Federal income taxes are already paying too much. The Democrats would say that the wealthy are not paying enough in spite of the above numbers. As a result, there is never any meaningful and fair tax reformation undertaken and the country hurdles towards a financial disaster.

In the absence of utopia, how about the following solution for the current income tax chaos:

- The Bush tax cuts are restored for those Americans making more than $250,000 a year as Obama desperately and irrationally fixates on. Remember, that doing this will increase income taxes received by the Federal government by about $70 billion and reduce a typical annual Obama budget deficit by only about 5%, not a big impact on our debt.

- However, as a condition for this tax increase, that extra $70 billion would never get into the hands of the political class. It would go directly to a Treasury Department virtual "lock box" which is untouchable by any politician. The Treasury Department would use the funds solely to pay down our nation's debt.

- For all Americans, both individuals and businesses, that receive money for filing their taxes and pay nothing in income taxes because of the current tax code, they would have to rebate back, via their tax forms, half of what they would have received from the Federal government. For example, if you were to net $1,000 from the Federal income tax code (i.e. you would be paying no Federal income taxes and getting $1,000 anyway due to tax breaks), you would have to pay back half of that $1,000 or $500. That $500 would go into the same Treasury account created above and the $500 used to pay down the debt.

How much would this generate? Finding the right numbers has proven impossible so let's try an estimate by a "what if" approach. What if we assume there are about 135 million tax returns filed every year (that number can be estimated by online sources), what if we assume that 45% pay no Federal income taxes and many receive money anyway from the Federal government, and if we assume that the average amount of money received is $1,000, then putting these assumptions together would generate about $30 billion a year. If the amount of money received is only $500, then this approach would generate about $15 billion a year. Not earth shattering relative to our national debt but it would certainly get the message across that everyone has to contribute to solving the debt problem.

- Both tax actions would self destruct once either a balanced budget amendment was passed  by the Federal political class or spending was reduced to such a level as generally viewed to be sustainable relative to GDP.

There are a number of advantages to such an approach. First, it would bypass all of the political posturing and inaction that we are cursed with from our politicians. Second, it would put every American's financial situation into the pot, no more of the rich paying under the lower Bush tax cut rates and no more of any American tax filer not feeling some pain of paying income taxes. Third, it would encourage taxpayers to put leveraged pressure on those in power to finally fix our out of control spending since until that happens, everyone in America would be paying more in taxes.

This approach would also apply to corporations and businesses.  A few weeks ago (source: The Week magazine, April 8, 2011), it became known that in collusion with the political class, General Electric had $14.2 billion in worldwide profits in 2010 but because of various tax breaks, it not only paid no Federal income tax but it received a $3.2 billion tax refund from the Federal government.

Under this proposed scenario, that $3.2 billion refund would immediately be reduced by $1.6 billion and that $1.6 billion would be used to pay down the debt. This approach would obviously encourage General Electric and other such businesses and companies to also pressure Washington to get its fiscal house in order quickly in order to eliminate this charge. $1.6 billion from just one company is more than 5% of the $30 billion discussed above. Thus, very quickly, once you add in those not paying any income taxes at all, personal and business, and those earning over $250,000 a year, you start to generate some significant revenue to pay down the debt.

A great plan. Politicians do not get more of our money to wastefully spend, there is an accounting fail safe process to actually pay down some debt, all Americans and all Americans businesses now have skin in the national debt game, and this skin in the game leverages everyone to pressure Washington to finally act to fix the budget process and address our debt problems. It is not utopia but at least it has a chance of working. Waiting for our political class to enact overarching fair tax reform is utopian thinking and thus, unlikely to ever happen.

[Full disclosure note: I am not anywhere close to earning over $250,000 a year in case you think I am only looking out for my own best interest. For our latest tax return we fell into the 15% bracket and paid money to the Federal government for Federal income taxes for year 2010.]




Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect
freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com