Regardless of the fiscal cliff, U.S. taxpayers will face higher taxes

MoneyIt has largely gone unnoticed amidst the hullabaloo surrounding the fiscal cliff, but regardless of what happens with the cliff negotiations, taxes are going up next year. The president may be calling for $1.6 trillion in tax hikes by 2022 in exchange for not driving the country over the cliff, but that does not count Obamacare, which will impose an additional $1 trillion in new or increased taxes over the next ten years, a big portion of which take effect in 2013. Continue reading

Forget the fiscal cliff, entitlements are the bigger American problem

Amid the fury over looming tax increases known as the “fiscal cliff” that promise to discourage investment and punish economic success, it is important to recognize the bigger problem with government debt and fiscal irresponsibility: entitlements.

Cato Institute Senior Fellow Daniel Mitchell said it well, who argues that the entitlement culture supported by the U.S.’s welfare state is a much larger issue that stands at the base of our economic worry.

“A lot of people get upset about the national debt, which is somewhere between $11 trillion and $16 trillion, depending on whether you include money the government owes itself. Those are big numbers — but if you add up the amount of money that the government is promising to spend for entitlement programs in the future and compare that figure to the amount of revenue that the government projects it will collect for those programs, the cumulative shortfall is more than $100 trillion,” wrote Mitchell.

Those are numbers that, unfortunately, make the fiscal cliff look like small potatoes.  More than $100 trillion blown on feel-good entitlement programs that – not so amazingly – encourage dependence on the federal government for, well, everything.  This, of course, includes flat screen televisions, high-speed Internet, cell phones and other expensive luxury items and electronic gadgets that are often owned by those on the public doll.

How will the government respond to this kind of astronomical spending?  Raise taxes, of course.  Increase revenue.  Another fiscal cliff, and more gouging of the wealthy in this country that will surely force entrepreneurs to look for a home for their business elsewhere – or at least a home for their money in offshore savings accounts.  Honestly, can you blame them?

“Unfortunately, the longer we wait to fix the problem, the harder it will be to solve. More and more Americans will become trapped into lives of government dependency over time, the private economy will be too suffocated by taxes to create jobs, and we could wind up like Greece – with the majority of the voting-age population determined to support the status quo.”

Sadly, Americans already support the status quo.  Despite poll after poll indicating frustration and fundamental distrust of government, Americans robotically flocked to the voting booths and pulled the lever for the very same politicians in 2012, the same Washington power structure, the same nonsense.  We are already there. The United States has already hit the point where dependence on government supersedes the power of reform.

Compared to that, Mitchell said, the fiscal cliff is a walk in the park.