THE REPUBLICAN DEBT
Jeff Covey: ‘Seeing it has a bigger impact than anything you can say about it.’
☞ And this is just now. By the time we have a chance to right things, beginning in 2009, the National Debt will approach $10 trillion – nearly $8 trillion of it racked up under just three Presidents: Reagan, Bush and Bush.
THE INTEREST WE PAY ON THAT DEBT
Scott Obeck: ‘So, if my math is correct, does about 15 cents of each dollar we send to the federal government go to pay interest on the debt?’
☞ Not exactly. The interest on our National Debt – currently around $350 billion a year and headed higher – amounts to nearly 40% of the $893 billion we paid in personal income tax this year.
(Total federal revenue for the fiscal year just ending is estimated at just over $2 trillion. In addition to the personal income tax there will have been $773 billion in Social Security tax taken out of our pay – but that’s all supposed to go to pay benefits and store up a surplus for the future. Bringing up the rear: the corporate income tax, at $226 billion, and smaller items like excise taxes and the estate tax.)
THE ILLUSORY TAX CUTS
Well, we may have borrowed $8 trillion, but at least we’re all rolling in tax cuts.
Institutional Investor’s Alpha magazine (as quoted in the June 5 New York Times Sunday Magazine) reported that the average pay for the top 25 hedge fund managers in 2004 was $251 million. They can be nothing if not happy about the tax cuts. Your own cut may not have been quite as large . . . you may have earned only $10 million in 2004 or even less . . . but who can fail to favor tax cuts?
Yet tax cuts, this author argues – as much as those hedge fund managers may have needed them – are illusory. (And not just because you’re increasingly likely to get hit up for the alternative minimum tax, if you’re a working stiff.) In tiny part:
Just remember, to spend is to tax. Not for nothing did the very, very conservative economist Milton Friedman once pen a column for the Wall Street Journal entitled ‘The Taxes Called Deficits.’ (April 26, 1984) . . .
Quote of the Day
The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.~Adam Smith, The Wealth Of Nations
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