As the election year wears on we’re constantly being bombarded by the political machines of the candidates. They all think that they have the best plan to fix the economy, cut taxes, put more money in your pocket and create more jobs. They all promise the voters the best of all worlds but the stark reality after the election is always somthing a lot different. Here’s one take on reality…
A number of proposals on taxes and the budget have come out recently, one by President Obama, one by Mitt Romney, and one by a friend, John Mauldin.
Every one of the proposals are fatally flawed, most of the for multiple reasons. Before one can fix a problem one must understand it.
In general, Democrats want to raise taxes and spend money.
Republicans on the other hand generally want to cut taxes and spend money. Military spending and Medicare spending both soared under Republican. Bush signed a disastrous Medicare bill.
Both parties claim to be against deficit spending. However, if neither party wants deficit spending then why are their deficits?
Before we get to what’s wrong let’s take a short look at some recent proposals.
Tax Cuts to Prosperity
Mitt Romney proposes A Tax Reform to Restore America’s Prosperity
First, I will make an across-the-board, 20% reduction in marginal individual income tax rates.
Second, I will reduce the corporate tax rate to 25% from 35%, transition from a world-wide taxation system to a territorial one, and make the R&D tax credit permanent.
Third, I will promote savings and investment by maintaining the low 15% rate on capital gains, interest and qualified dividends, and eliminate the tax entirely for those with annual income below $200,000.
Fourth, I will take long overdue steps to correct failures in the tax code. I will abolish the death tax, whose primary effect today is to foster elaborate schemes for transferring wealth. I will also repeal the Alternative Minimum Tax, which was intended to make the code simpler and fairer but has accomplished precisely the opposite.
Fifth, I will bring stability to the tax code by making these changes permanent.
A Simple Question
Excuse me for asking a simple question: How the hell are you going to pay for this?
What spending cuts would Romney make? He did not have the decency to say.
Take another look at point number 5. It’s a blatant lie. There is no way to make changes permanent. Any Congress at any time can make tax changes undoing prior Congressional actions.
So who are we to believe? Your guess is as good anybody’s. Just put all the names in a hat and pick one. Works every time for me.
Filed under: Business