This is a Taxing Situation!

I saw a pie chart the other day that simply amazed me. I was struck with awe, it reflected the amount of spending, and how our dollars are divided in the federal budget. I've got to tell you this was an eye opener, 40% of the tax dollars we send to Washington is spent on Social Security, Medicaid, and Medicare. It consumes nearly 1/2 of the budget, and far exceeds any other programs. It dwarfs defense and education spending.Here's the kicker....The new healthcare legislation hasn't been added to this chart yet!

Does it strike anyone else wrong that a program like Social Security, that by the way was supposed to be an insurance pool that supported itself, is preventing us from servicing our debt? The money paid in by the taxpayers has been robbed, because legislators didn't have the spine to tell us they were going to raise our taxes to pay for unfunded programs. In theory Social Security should be self supporting and solvent.

Like you and I are required to do, it's time the government lived within it's means. That doesn't mean raising or creating new taxation, it means cutting spending, and being fiscally responsible. There is a push on to consider a value added tax to confront these out of control spending policies. That tax is a federal sales tax where every good produced in this country is taxed as it passes down through the distribution chain. Her's a quick explanation.

A good produced is taxed by the feds before it leaves for the warehouse. The warehouse taxes it again before it moves to the retail outlet, then finally the good is taxed yet again when the consumer purchases it. In effect it has been taxed 3 times, and the price to you increased. They have this system in Europe and it adds an additional 20% to the cost to you the consumer. This doesn't include the existing state sales tax, which will still be applicable.

Washington is testing the waters on this idea. They have sent a few people out to discuss the possibility of this occurring. The way we react to this rumor will define the course they will plot to enact this new tax. If we don't object loudly to the rumor, they regard it as doable. If there is a large protest, they will find a way to soften their message till we accept the need for this assault on our income stream.

New taxation is unacceptable. You can't out tax financial stupidity. We must control spending as the first step. The answer doesn't always have to come out of pocket. In closing a bit of humor, or is it? What is the difference between the tax man and a taxidermist? .......The taxidermist leaves the skin!

God Bless!
Capt. Bill