The $1.8 Trillion Tax Increase

[Sandra]

No Tax Deal Equals New Taxes

The $1.8 Trillion Tax Increase

 
 - Online By Brian Ward  Thursday, August 4, 2011

President Obama and his party leaders have been insisting that new tax revenue must be part of any talks concerning cutting government programs.  Speaker Boehner stated that the Republican Party agreed to $800 billion in new tax revenue after which the President demanded $400 billion more.  Late Sunday night a new deal seemed to emerge not requiring any tax increases, yet here they are, already hitting a paycheck near you.

Let’s rewind to January of 2011 when the Congressional Budget Office released its annual Budget and Economic Outlook Report through the year 2021.  It was here in their revenue projections through the year 2014 that something caught my eye.

The CBO projected the revenue to the government will increase from an estimated $2.2 trillion in 2011 to a whopping $3.45 trillion in 2014.  How could the government increase its revenue 55 percent in only three years?  Did the CBO really expect our nation, which is experiencing a historical recession, to grow so fast?

The answer is no.  So where does all that new money come from?

TAXES

Let’s see what the CBO has to say about this new revenue:

“Under the baseline assumption that current laws remain unchanged, total revenues are projected to rise by 54 percent between 2011 and 2014, much faster than GDP. As a result, in CBO’s baseline, revenues climb from 14.8 percent of GDP in 2011 to 19.9 percent in 2014. In only two years since 1946 have federal revenues reached or exceeded 19.9 percent of GDP; during the past 40 years, revenues have averaged 18 percent of GDP. Of the 5 percentage-point increase in revenues relative to GDP projected for 2011 to 2014, about three-quarters stems from the expiration of tax provisions initially enacted during the past 10 years and, to a lesser extent, from other scheduled changes in law.”­ CBO Budget and Economic Outlook, Jan 2011

If you missed the all-important line in that statement let me highlight it for you.

“Of the 5 percentage-point increase in revenues relative to GDP projected for 2011 to 2014, about three-quarters stems from the expiration of tax provisions.”

Seventy-five percent of $2.43 trillion (total new revenue above the 2011 baseline through 2014) is $1.802 trillion.

Let’s look briefly at the impact these new taxes will have on state budgets.  Cash flow is an important component of any business and states are no different.  Sales tax revenue is the all important revenue generator for states and if cash flow goes down, then so does sales tax revenue.  These expiring tax provisions will reduce cash flow to states by an average of $36 billion. When taking the national sales tax average of 7 percent into consideration, this means budget cuts of almost $2.5 billion are set to hammer your state.

These new budget cuts will hit government services such as education even harder.  Will the teachers union support the Democratic Party’s efforts to reduce tax revenue to their school districts?  The question is rhetorical yet asked to show the hypocrisy of their support of the Democrats in power.

$18,000 – that’s the dollar amount that will hit the citizens who actually pay taxes over the next three years.  This will reduce incoming cash to local small-business owners, thereby reducing the labor force even more, leading to an ever-increasing burden on state governments to find ways to cover unemployment benefits.

Unfortunately for all who call America their home, this is the cause and effect of Federal taxation to local economies.  It affects everyone, not just those who pay income tax. When the President demands a tax increase he is in fact demanding that states cut their budgets and small-business owners lay off more labor, leading to higher costs on a state that just took a budget cut.

Unfortunately for all who vote in America, this information has not yet reached their understanding because mainstream media does not report the taxation issue this way. Therefore, voters keep electing government officials who end up taking away their money and eventually their freedom. Isn’t it time to turn the tide and shed some light on this issue before it is too late?

More detailed information regarding the effects of taxation, and what we can do about it, can be found in my booklet titled, “No More Secrets.”

Posted with permission from: Boogai.net

http://canadafreepress.com/index.php/article/39144

 

[Sandra]

We need to contact our DC critters when they return or catch them in there home state offices and tell them "CAP SPENDING and DE-FUND FDA, Homeland Security  and many other items, cut the FEDERAL work force in half! Both speakers Congress and the Senate, should resign immediately.. They are all too stupid.