Once again, taxes are not the problem.

How many times can we the people place our trust in our elected officials only to be disappointed again?  The U.S. government spends our money how they see fit and when they mess things up; they come to us for more money.  I for one am tired of opening up my checkbook for these people every time they “need” more money to fix this country’s problems.

Trillions of dollars, that is trillion with a ‘T,’ have been spent on things that the average American would be appalled if they knew for what their taxes were being used.  Let’s look at a few facts:

1. Presently, the [automatic annual] Baseline Budgeting increase is about 7%.  (wikipedia)http://en.wikipedia.org/wiki/Baseline_(budgeting) That means, when the GDP drops, no one in the government has to take a haircut.  No agency by default loses money in their budget.
2. CBO reported that net interest on the public debt was approximately $223 billion in FY2012 (6.3% of spending)
3. Debt held by the public as a percentage of GDP rose from 34.7% in 2000 to 40.3% in 2008 and 70.0% in 2012.
4. President Obama pushed for his American Recovery and Reinvestment Act of 2009, which he proposed to spend $6 Billion for renewable energy.  That money doesn’t go very far when you give it to companies like Solyndra who get a $536 million loan guarantee without any true market to sell to.

Spending and debt go hand in hand.

Here are a few risks associated with the debt

• The CBO reported several types of risk factors related to rising debt levels in a July 2010 publication:
• A growing portion of savings would go towards purchases of government debt, rather than investments in productive capital goods such as factories and leading to lower output and incomes than would otherwise occur;
• Rising interest costs would force reductions in important government programs;
• To the extent that additional tax revenues were generated by increasing marginal tax rates, those rates would discourage work and saving, further reducing output and incomes;
• Restrictions to the ability of policymakers to use fiscal policy to respond to economic challenges; and
• An increased risk of a sudden fiscal crisis, in which investors demand higher interest rates.

The point is, the U.S. government must get its spending and debt under control before I will go along with any tax increase.

You and I go to work every day; we earn a paycheck, and hope we have enough left over after taxes to be able to pay our bills.  According to www.nowandfutures.com, the average American family pays 58.5% of their paycheck to taxes of some kind.  That could be payroll tax, sales tax, property tax, and no matter what any politician tells you, WE THE PEOPLE PAY ALL THE TAXES.  When you hear that the government wants to raise taxes on corporations, you and I get stuck with the bill.

So to fix the Highway Trust Fund, the politicians want to raise gasoline taxes. Read what I just wrote above.  Those rates would discourage work and saving.  When you tax something, you get less of it. I have covered why this will not work in a previous article.  When the economy takes a nose dive, you and I have to trim our budget to make everything work.  You have to make choices on the best way to spend what you have.  You can’t go to your next door neighbor, put a gun to their head, and demand they give you money, so you don’t have to do without.  But a politician, with the power of the IRS and under penalty of law, can make you and me pay for whatever they want, and the only repercussions we have is the ballot box at the next election.

Here is one proposal in the federal budget (2014) for the Department of Transportation.

Proposes Dedicated Funding for High Speed Rail Investments.

The Budget provides $40 billion over five years to fund the development of high-speed rail and other passenger rail programs as part of an integrated national transportation strategy. This system will provide 80 percent of Americans with convenient access to a passenger rail system, featuring high-speed service, within 25 years. The proposal also benefits freight rail and significantly restructures Federal support for Amtrak, to increase transparency, accountability, and performance.

My question is this: Why are we proposing spending for a high-speed rail system projected out to 25 years when we need funding on existing highways NOW?  Yes, I do have a problem with funding a high-speed rail system that is not profitable and continues to be supplemented for political purposes.

“Amtrak is a massive failure because it’s wedded to a failed paradigm. It runs trains that serve political purposes as opposed to being responsive to the marketplace. America needs passenger trains in selected areas, but it doesn’t need Amtrak’s antiquated route system, poor service and unreasonable operating deficits.” Anthony Haswell, founder of National Association of Railroad Passengers and ‘Founding Father’ of Amtrak.

So, I for one will not entertain any plan to fix highway funding until the government gets its fiscal house in order. Make a budget, cut spending on ridiculous things, and prove to me the government is honest about what it will take to fix these problems.

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