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Don’t buy into the fear tactics. If Medicare went bankrupt there would be a revolution in this country. Next you’ll tell me that SSA will go bankrupt. Thanks for my morning ha-ha.
Simple math is now fear. The revolution should come when we will be taxed to the breaking point of our economy thanks to the socialism in this country.
Tax To The Max
By INVESTOR’S BUSINESS DAILY | Posted Friday, August 08, 2008 4:20 PM PT
Entitlements: The day of reckoning is coming for the costs we’re running up to keep Social Security, Medicare and Medicaid benefits flowing. Judgment will be painful — as in a 150% increase in our current tax bills.
Read More: Budget & Tax Policy | EconomyIn an analysis prepared for Republican Rep. Paul Ryan, the Congressional Budget Office outlined the ghastly details:
“The tax rate for the lowest tax bracket,” the CBO told Ryan, “would have to be increased from 10% to 25% (or 150%), the tax rate on incomes in the current 25% bracket would have to be increased to 63% (or 152%); and the tax rate of the highest bracket would have to be raised from 35% to 88% (or 151%).”
The top corporate tax rate would also move from 35% to 88%.
It could happen. Democratic Sens. Jay Rockefeller and Barbara Boxer have acknowledged they’d support raising taxes to fund the estimated $36.3 trillion that will be needed to pay for the next 65 years of Medicare benefits, just one of the three problems. Lawmakers tend to like tax hikes.
In the understatement of the year, the CBO says increased “tax rates would significantly reduce economic activity.”
The new top rate would not be the highest ever — but it would be close. As the chart shows, America’s all-time maximum rate was 94% in 1944 and 1945, years when the war machine needed the cash and the public endured government rationing of cars, gasoline, tires, meat, cheese, butter, sugar, silk and shoes.
Rates fell after the war, but climbed back near their previous highs in the 1950s and early 1960s.
Then Presidents Kennedy and Reagan successfully pushed tax cuts that spurred a recovering economy (under Kennedy and President Johnson) and a recession (inherited by Reagan from President Carter) into growth cycles.
Allowed to grind on without real reform, Social Security, Medicare and Medicaid will do what no invading army or cabal of terrorists has done or will ever do: bring this mighty republic to its knees.
Increasing federal taxes by 150% will strangle economic growth. Economies need investment, not wealth redistribution, to expand, and taxes suck money from the capital pools that provide it. The entrepreneurs who fuel economic growth are denied the lifeblood that their ventures need.
High taxes also dim productivity, another key ingredient in economic growth. Why should small-business owners work hard to boost enterprises that provide jobs and income to tens of millions if Washington is going to get a bigger bite of their profits?At the micro level, those rates would wreck the personal finances of all but a few people in this country. It’s unfair to ask — actually, to force — Americans to begin living ascetic existences when our heritage is the promise of prosperity. The four years of malaise that Carter oversaw would be nothing against the economic sinkhole that would follow the enactment of those rates projected by the CBO.
The coming entitlement crash has to be solved without increasing the tax burden. A doubling of rates is out of the question.
The country had better hope the next president and Congress will deliver us from the dilemma — and soon, because the longer we go without a solution, the more difficult the task becomes.Email To Friend | Print | View All Editorials | Search
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sorry, but i’m not convinced. the feds will just do what they’ve done to finance this illegal war — print more fiat money.
They say that one definition of insanity is doing the same thing over and over again expecting different results so clearly we can’t keep on doing what we have been doing in the past because we’ll just get the same results…..
Your comments tend be somewhat brief Roark so perhaps instead of telling is what you think won’t work, please share with us what you think will work…
If printing more money is one of your definitions of “socialism” then the present administration are most definitely extreme socialists, no? Incidentally the Federal Reserve ceased publishing M3 statistics in March 2006 – I wonder why?
What new ideas do you have Roark?
How do you anticipate the US will pay down this staggering Social Security, Medicare and Medicaid debt “without increasing the tax burden”?
And since you are clearly opposed to Obama, please share with us what new ideas you think McCain brings to the table? I am no political expert but sounds like the same old song to me except he’ll probably drag us into more wars in Iran, Pakistan and probably Russia.
Scott Oliver – Founder
WeLoveCostaRica.comPS. You can see the Money Stock Measures at [ http://www.federalreserve.gov/releases/h6/current/ ]
PPS. Some good numbers also at [ http://www.nowandfutures.com/key_stats.html ] and [ http://www.gold-eagle.com/editorials_08/hewitt071408.html ]The Feds are doling out newly-printed fiat money every single day and have been for years!! So I guess we have been living under socialism according to YOU! What’s McBush really going to do? All I ever hear him prattle on about is what Obama is or isn’t going to do, and a lot of what those ads spew are complete and utter fabrications. How can you have respect for a guy who approves an ad comparing Obama to Paris Hilton? I mean, if that wasn’t the dumbest, and lowest common denominator ad I’ve ever seen, I don’t know what was. McBush knows only one thing: WAR, and that’s what we’re going to get more of if he’s (sadly) elected. Maybe you should rent WAG THE DOG! Because I know a whole lot of people who are saying the entire Georgia thing is just a ruse so big tough warrior McBush can come in and save the day! And just why did they call him “Songbird”?
The boys and girls in Washington won’t let that happen… but the “fix”… be it “new” rules for both plans… or the DRASTIC tax increases they’d need to fund them as presently structured will bring this country to a NEW understanding of what POVERTY is…. time to start a victory garden and start bartering for the things you need!
Scott, I think people can save for retirement better if they do it themselves. When social security started it was only 1% of income. Now its 15%. When it started the life expectancy was about the same age when you were aloud to start collecting your benefit. Now people can start taking it at 62. Life expectancy is almost 80. My solution for the next 30 years is to allow people to collect their benefit but increase the age to at least 65 for boomers, 72 for people born after 1964, life expectancy for those born after 1986.
We have to change the mindset that Social Security is part of your retirement. We need to teach our children and people entering the workforce to save, invest and stay out of debt.
My solution is sacrifice and education. If you want to retire from a working life you can do it. Social Security will be there for the less fortunate as a safety net, which was the original idea of the plan, not a retirement program. I think moving the age out to where it was originally set at (life expectancy) we can fix the problem without taxing ourselves into oblivion, creating a wedge between generations.
As far as McCain is concerned I think he is the only person right now talking about Nuclear Power, which I’m all for to solve our energy problems. I don’t think he’ll raise taxes. I think he’ll nominate justices who don’t legislate from the bench. And I think he will win this war gainst terrorism.
With all this talk about hope and change I still don’t know what Obama wants to do except make government bigger and more expensive.
What do you think about Obama? I remember you being very supportive of Ron Paul, but these to guys are on opposite sides.
Edited on Aug 17, 2008 22:11
As an outsider to the US, I see no solution being offered for the dire economic difficulties the country finds itself in. Printing money as the Fed has been doing creates instant debt for the US treasuary, as the Fed “sells” the money to the Government. (The Federal Reserve is after all just another corporation owned by stockholders – GWB’s Grandfather was president of the Fed…)
Being in countries they shouldn’t be in is fiscally crippling the economy quicker than the mortgage crunch… that’s just a correction of state by the banks because they got too sloppy in granting mortgages to people that wouldn’t qualify anywhere else in the world.
Teaching our children to be fiscally responsible starts with education, but the education system doesn’t even attempt to inject that sort of philosophy. Maybe because of under funding…because the Government is too busy spending money they don’t have on wars…
Unfortunately, the general public in the US just doesn’t grasp the idea of freedom of expression, they can only have two choices for President, a Democrat or a Republican… That will never make sense to me, especially when a lot of people vote the same way no matter what… always Dem or Rep. Surely there must be someone out there that has some NEW ideas and can maybe find the backing to run even as an Independant. There are lots of “tree – huggers” out there… why don’t they have a political party in the US… like just about everywhere else… (I apologize if I offend anyone by using labels… but that seems to be the way it’s done in the US)
The whole world is watching the US presidential race believing that the next President will be the saviour of the US economy… but the administration pulls the strings… the President is effectively just a “frontman”
The whole system in the US needs to be looked at and maybe changed completely… or maybe just some key areas… but SOMETHING needs to be done and SOON!I do appreciate the comparison Roark but when Social Security started in 1935 the USA was a very different place, no?
With much higher energy costs, a devastated real estate market which will get much worse, higher food prices, higher home insurance costs, skyrocketing health care costs with employers offering less and less benefits, deteriorating unemployment numbers, an ever increasing number of higher and higher paying jobs moving offshore with the average real hourly wage paid to American workers lower today than it was in the 1970s, with people living much longer and the lowest savings rate in the US since the great depression – that ain’t as easy as it was when you were there…
I honestly don’t believe that any of us truly grasp the real size of these outstanding liabilities. The numbers are simply out of this world and there will be no easy solution – it will be painful to the extreme… A situation which will make the great depression look like a fun day out….
Scott Oliver – Founder
WeLoveCostaRica.comPS. I NEED TO POINT OUT THAT THE SYSTEM DEFAULT WILL PROBABLY CLOSE DOWN THIS DISCUSSION FORUM THREAD SOON AS IT IS VERY, VERY LONG…. I’M AFRAID THERE IS NOTHING I CAN DO TO STOP THAT FROM HAPPENING.
Social security is taken out of our paychecks…no? Why should we not count on it for retirement it’s OUR money! It’s our governments mishandeling of the funds that is the problem!
I agree entirely Lotus. But that is the problem. The government does a poor job handling money, and do you think they will get better at it. I think there should be a system in place to help people with retirement, but it should be controlled by the individual. Like you said it’s “OUR money.” You trust the government with that fiduciary responsibility? I don’t.
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