Tuesday is the deadline for filing federal income taxes. Half of American taxpayers will pay 97 percent of the individual income taxes the government will collect for 2008, according to IRS data. The other half will pay little or nothing, yet receive billions in benefits in the form of cash, subsidies, “free” services and other benefits and loans.
There are indeed “Two Americas,” but the two aren’t the rich and poor, but taxpayers and tax consumers. It’s going to get even tougher for the taxpayers in the near future, thanks to legislation being readied by Democrats who control Congress.
First, there are some differences between the Senate and House versions of the 2009 federal budget, but, however the details are ironed out, the Democrats will kill President Bush’s 2001 and 2003 tax cuts.
If his promised veto is over-ridden by Congress, it will mean a minimum tax hike for every American taxpayer of about $3,000 annually. The increase could be even more, though, because buried in the Democrats’ budget resolution are 17 “reserve” funds of additional taxing authority.
Even without the reserve tax hikes, however, allowing the Bush cuts to expirewill mean that 20.3 percent, or one of every five dollars, of Gross Domestic Product will soon be consumed by government.
But that’s not all of the tax hikes the Democrats are planning. The Congressional Budget Office (CBO) conceded last week that the anti-global warming “cap-and-trade” system proposed by Sens. Joseph Lieberman, ID-Conn., and John Warner, R-Va., will require $1.3 trillion in new tax revenues over 10 years.
So add another $1,400 or so on top of the $3,000 in higher taxes.
Inhofe faces a tough fight in opposing Lieberman-Warner, however, because such Senate GOP stalwarts as Sen. Lindsay Graham of South Carolina and presumptive Republican presidential nominee John McCain of Arizona also favor such legislation.
Higher federal taxes are typically followed by more spending, which in turn requires additional levies. With this vicious tax-and-spend-and-tax cycle also comes more burdensome bureaucratic regulation on the productive business and entrepreneurial energies that power the tax-paying segment of the economy.
Will the Democrats ever learn that geese only lay golden eggs in fairy tales?