Thursday, January 3, 2013

Talking Down from the Cliff--Well Almost

Congress and the President managed to avert disaster, barely.

But they did it! And the markets responded yesterday with the DOW raising over 300 points!  Yay, somebody made money, I just wish it were me.

I was happy to see that a compromise for the good of the Republic was reached before deadline put everything that had been achieved during the past over 200 years at risk of collapsing.

Am I happy with the final deal? No. But, that is a good thing I think. Everyone seems equally unhappy and that means that some form of middle ground was reached. Is the spending being cut enough? Probably not. Are taxes going up enough? Thankfully, no.

Are we going to be printing a lot more money? Probably yes.

I have been doing research on the numbers of people who do not pay income taxes. Too many. Most for very good reasons. But, it seems to me that if everyone is not invested in the country, then those who are not invested have a skewed sense of reality.

I believe it is time for a major tax overhaul and first and foremost we need to get rid of the personal income tax,

Yes, I just wrote that.

I noted that I am taxed twice on my income. First when I earn it and second when I spend it. That makes no sense and is really double dipping. We need a single fair tax--that would be some form of consumption tax on goods and services which everyone pays the same percent, but those who can afford to buy more--will therefore rightly pay more in taxes.

I looked at my pay statement. I am taxed by a thousand cuts it seems.

There is the Federal withholding and the State withholding. Then there is separate FICA and Medicare. In some places, thankfully not where I live, yet, there is also a locality tax. And then sales tax--in Maryland it is 6% on some things and 9% on others. How insane is that?

The governments have made it hard to determine the true tax rate being paid. A single consumption tax--call it VAT (value added tax or sales tax on steroids) and having it in one place and paid at one time would be considerably fairer. Everyone buying goods and services would be paying the tax.

That seems fairer than what we are doing now.

Thank you Congress and the President for forestalling the fiscal cliff--now get together and let's see some true tax and spending reform!

-- Bob Doan, Elkridge, MD

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