Get Out Your Wallets

The first paychecks for those of us working for a living will begin arriving any day now. With those checks will come changes to the "withholding" column of your detailed paycheck report. Sure, most of the increases apply to those making over $250,000 per year, but folks those are the people, by and large, that are running small businesses throughout this land. That fact does not bode well for increased employment, not at all.

In addition, these "soak the rich" increases were fought for, tooth and nail, because they would help to balance the awful, one-sided, overspending of tax receipts by the federal government. HA! Do the math; this won't even begin to right the lopsided, deficit-laden expenditures by this bunch in D.C.

We're in trouble and our esteemed President seems dead set on continuing down the same road to eventual financial ruin. Look at Greece, look at Spain and see what type of malaise is in store for our own United States. It's coming...maybe not tomorrow, this year or next, but it is really coming soon to send all of us into financial Armageddon.

The Heritage Foundation's "Morning Bell" report this morning (1/8/13) detailed 13 tax increases that took effect on January first of this new near. Here they are in brief:

13 Tax Increases That Started January 1, 2013 

Tax increases in the fiscal cliff deal:

1. Payroll tax: increase in the Social Security portion of the payroll tax from 4.2 percent to 6.2 percent for workers. This hits all Americans earning a paycheck—not just the “wealthy.” For example, The Wall Street Journal calculated that the “typical U.S. family earning $50,000 a year” will lose “an annual income boost of $1,000.”

2. Top marginal tax rate: increase from 35 percent to 39.6 percent for taxable incomes over $450,000 ($400,000 for single filers).

3. Phase out of personal exemptions for adjusted gross income (AGI) over $300,000 ($250,000 for single filers).

4. Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).

5. Tax rates on investment: increase in the rate on dividends and capital gains from 15 percent to 20 percent for taxable incomes over $450,000 ($400,000 for single filers).

6. Death tax: increase in the rate (on estates larger than $5 million) from 35 percent to 40 percent.

7. Taxes on business investment: expiration of full expensing—the immediate deduction of capital purchases by businesses.

Obamacare tax increases that took effect:

8. Another investment tax increase: 3.8 percent surtax on investment income for taxpayers with taxable income exceeding $250,000 ($200,000 for singles).

9. Another payroll tax hike: 0.9 percent increase in the Hospital Insurance portion of the payroll tax for incomes over $250,000 ($200,000 for single filers).

10. Medical device tax: 2.3 percent excise tax paid by medical device manufacturers and importers on all their sales.

11. Reducing the income tax deduction for individuals’ medical expenses.

12. Elimination of the corporate income tax deduction for expenses related to the Medicare Part D subsidy.

13. Limitation of the corporate income tax deduction for compensation that health insurance companies pay to their executives.
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We're in trouble, my friends. Hang on to your hats; we're in for a wild and terrible ride.

Quid, Me Anxius Sum?*

SOCIALISM

1: any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
2   a : a system of society or group living in which there is no private property
     b : a system or condition of society in which the means of production are owned and controlled by the state

As The Iron Lady, Margaret Thatcher, former Prime Minister of Great Britain once said, "The problem with socialism is that sooner or later you run out of other people's money."

As we well know, the European Union is in a financial shambles and is close to collapse. This past weekend France elected Francois Hollande, a Socialist, with—evidently—the hope he will find a way to lighten the austerity measures being pushed by Germany as the last-ditch effort to hold the EU together.

In Greece, anti-austerity parties won recent elections handily, showing the voters' anger over those same cutbacks to fiscal policies that are bankrupting nation after nation. They seem to be shouting, "damn the (economic) torpedoes...Full Speed Ahead!"

I'm reminded of Alfred E. Neuman's famous question/statement in Mad magazine:
                           What, Me Worry?* (the post title is the Latin translation)

I'm not intelligent enough to say what these developments may mean to our own November elections, but I have a nagging feeling the winner could well be the one promising the most for nothing, a chicken in every pot, and cradle-to-grave protection from any and all ills. Just think about the millions of our citizens benefiting from those federal programs; they do vote, after all. Here at home, well over 40% of our income earners in 2009 paid NO income taxes, according to the Tax Foundation (see: http://www.taxfoundation.org/news/show/250.html). Turn that around and one might say that just over half of us paying income taxes are footing the entire expense of all those federal programs. Just sayin'...

Something's got to give, here and abroad. This craziness just cannot continue.

A Billion Here...A Trillion There

We hear our elected folks talk about millions, billions and even trillions of dollars. They throw out those numbers casually and sometimes I'm not sure I, or you, really understand what those names represent.

I came across what I believe is an excellent illustration of the relationship between these numbers. Check this out:

What does one TRILLION dollars look like?

I guess I'm a "visual" guy, rather than a strict numbers guy, so that illustration really helps me to understand. Amazing isn't it?

Now, try to comprehend that the Total Public Debt Outstanding of these United States is over 14 trillion dollars! Then try to imagine the amount of interest on that debt. It makes my head hurt, as well it should. After all, pretty soon we'll be talking about Real Money.

The Answer to Our Economic Woes

Warren Buffet didn't amass his personal fortune by being lucky. He's reputed to be one of the most intelligent money managers in the country and his success is amazing.

This quote, attributed to him, makes a believer out of me:

“I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.”

The only problem I see is who the heck can we get to pass such a law? 

Something Has To Change

In their 2011 Budget Chart Book, the folks at The Heritage Foundation have clearly illustrated that the federal budget is in dire straits. Here's just one example of our astounding out-of-control federal spending:

Note that this shows inflation-adjusted dollars.

Go here for a much larger chart and access to the other unbelievable information.

Just as many other nations, U.S. states and cities are finally admitting, we simply cannot continue this madness any longer.

Friends, without substantial and meaningful reductions in federal spending---cuts that will affect each of us---our great nation is headed into financial chaos. Let's hope the representatives in Washington have the guts to take the tough, necessary actions now, before it's too late.

Just Leave Us Alone

In her State of the State message on 1/19/11, South Carolina Governor Nikki Haley echoed Ronald Reagan's sentiment that "as government expands, liberty contracts." The role of government, she said, is "to secure the rights and freedoms of our people." It was "never intended to be all things to all people." 

Right on, Governor! 

Unfortunately, there are many from the President on down the line that would heartily disagree with the Governor. They feel the federal government should be involved in every aspect of our lives, from cradle to grave. Just look at "ObamaCare" as a shining example of government essentially taking over approximately one-sixth of our national economy.

Balderdash! Horse hockey! Nonsense! Leave me alone! 

Over the past two years, the federal government has gone way too far into controlling the private lives of citizens and private companies, too. Of course, that takes money...lots of money. As a result, we have a budget deficit that will essentially cripple our children, grandchildren and those that come after them. Can you really fathom fourteen trillion dollars? I can't imagine what that really represents. It's even more impressive to see it in numerals:

$14,000,000,000,000

And don't forget, as Ronald Reagan told us,

We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much.

We spend too much trying to be all, to all...and all that spending is about to economically ruin a once great nation.