There are very few days that we work less than a ten-hour day, and that’s on a good day. From load-in to load-out, we’re lucky if the clock stops ticking at the ten-hour mark, and even if it does, we still have to take into account all the time spent just traveling from one place to the other. Time is money and as I see it, we manage to spend more time than the money we make. I’m not complaining. I’m just stating a fact, because by the time this piece is published, we may all be lying at the bottom of the fiscal cliff clutching our empty wallets due to expired tax cuts.
Either that, or our elected leaders will have averted the long plunge, thereby saving most of the country from the pain of spending cuts and a tax increase.
In case of the latter, the top 0.9 percent of the country — those individuals earning $400,000 and families earning $450,000 and up — would be subjected to the heftiest tax increase, with the rest of us feeling the pinch mostly in the form of the expiration of a 2 percent Social Security payroll tax cut.
The Same Old Story
While it may seem that the national debt is a new issue, it’s in fact an old story. Since the Constitution went into effect in 1789, the United States has held a public debt, which has historically increased after each war starting with the Revolutionary War. Recession, which amazingly coincides with war, is another reason for increased national debt. During the Great Depression, due a decrease in tax revenue and the enactment of all the social programs, the national debt rose again. By the end of 1945, due to the war effort, the national debt had risen to 112 percent of the Gross Domestic Product (GDP). The ratio between the GDP and the national debt is significant, as a low debt to GDP ratio is indicative of a productive economy that can produce and sell its products and services for profits high enough to pay back the debt. Of course, the GDP cannot all be used to pay back the debt, and usually only 5 percent to 10 percent of the GDP is used for debt repayment. At this time in our history, the United States is not only coming out of a recession (which makes for a low GDP), but we, as a nation, have also spent the last ten years financing two wars.
Understandably, the bill needs to be paid, and both political parties have come to the table with various ideas in an effort to resolve our problematic debt. After keeping track of the political, economic and social issues brought up by both sides, I have come to the conclusion that neither side is truly thinking in a creative manner in order to resolve our issue of debt.
So far, both political parties have presented what seems like tried and true ways of raising revenue, with both sides presenting their version of fiscal responsibility by promoting such novel ideas as doing away with certain tax deductions, raising the income tax for the wealthy and across the board spending cuts. While all these plans have some degree of merit, most of them sound like punitive measures to a taxpaying public. After all, the less fortunate of the population really cannot afford to part with any of their income, and those at the opposite end of the spectrum don’t want to shoulder the burden for those that cannot contribute.
It’s a quandary, but for rich, poor or somewhere in between, tax is like a dirty word and, as much as the need for revenue is understood, I still don’t look forward to an increased levy against my income. Similar to most people, I dislike giving away large chunks of my earnings — especially when I am told that it is not enough. Indeed, if I were required to do so, then I would prefer to get an itemized receipt with the transaction so I can have a true perspective of what I have really funded. Each paycheck I receive itemizes my withholdings as such: federal withholding; Social Security; Medicare; disability and state tax. As long our elected officials aren’t using all the social security and Medicare withholdings to pay the national debt, then I — more or less — know what I am paying for when I see those itemized costs. Disability is fairly self explanatory, but when I get to the federal and state tax line items, there is no elucidation as to where my money is allocated and — other than going online to get pie charts of a general tax breakdown — I am left to assume and wonder.
Apparently, the two factions of the same party that are in charge of figuring out how to be a viable and healthy country cannot break away from the same old mold that has dominated conversations for the past hundred years or so and we, the general public, are the ones to pay for the bumbling, bloviating adherence to tradition. Statistics are touted, pie charts and graphs, which always make for nice striking images, are analyzed and dissected by the many different gloom and doom experts, and yet — if the social programs are cut and taxes go up (or vice-versa), we don’t get ahead, and the country still marches to the drum of big business.
Gimme (Corporate Tax) Shelter
Speaking of taxes and big business, the New York Daily News ran a small item about how Google cut its tax bill in half and, in the process, saved about $2 billion. It seems they sent 80 percent of their 2011 pretax profit (or $9.8 billion) to Bermuda, because Bermuda has no corporate income tax. Apparently this is all legal, but this type of corporate tax sheltering — which has been going on for years — allows Google to pay a mere 3.2 percent on overseas profits. So what’s new? Sleazy, yes; illegal, no — and they are not the only large conglomerate to incorporate this maneuver. So what’s a poor country to do? The huge banking concern HSBC has just been accused of laundering money for Mexican drug cartels as well as conducting prohibited transactions for countries such as Sudan and Iran. There are no indictments, but the Federal and State governments have made a settlement with the bank for $1.9 billion. The incident raises many resounding questions, but will that lump sum go to the deficit, or is this just making a new vernacular for a “Sin Tax?”
An Idea from the Music Industry
From my experience, it seems that when faced with dire situations, the American public is more than willing to open up its pocketbooks and give to people in need. Benefits for relief from disaster, hunger and an abundance of injustices worldwide are put on by top stars raising money, providing jobs and giving the contributing public something in return for their hard-earned donations. Examples such as the Concert for Bangladesh, Live Aid and Farm Aid and now the Benefit for Hurricane Sandy provide proof that this is a successful formula for raising money. Harvey Weinstein, one of the co-producers of the Hurricane Sandy Benefit said that the Concert for New York, which benefited the victims of 911, raised $65 million. “That wasn’t one tenth of what we’ve put together today in terms of distribution,” said Weinstein. Even though production costs can cut into revenue, Weinstein says, “Corporate sponsorship will cover every penny of it.” That’s right, even the corporations will dip into their meager savings and cover production costs in exchange for a little good vibe PR.
There you have it! Individuals and corporations will happily give up the cash, and all they want is a little something in return. Therefore, if our leaders were smart, they would jump on the bandwagon and set up a plethora of concerts with catchy names. Cute and catchy names always help raise bundles of cash. For example, call the program “Benefit for the Deficit.” Then, while they are at it, they should completely legalize marijuana in all 50 states and charge a tax for the deficit which would not only raise money, but will help deplete the overcrowding of jails, thus saving the government even more in unnecessary spending. Call it “Smoke the Deficit.” Make the oil companies pay a dime to the deficit for every gallon of gas pumped in the United States. Call that “Pump the Deficit.” Taxing legalized prostitution could result in the “F**k the Deficit” program. That should raise some quick cash. Lastly, have a national lottery where every citizen of legal age can partake in the “Bet the Deficit” program. Make the payout a flat $5 million with the rest going to the national debt. The best thing to do would be to take the legalized marijuana, gambling and prostitution and bundle it with a huge concert and call it “Party for the Deficit.” That should generate a bit of quick cash and, even though many people might repudiate the idea based upon moral and religious factors, I would venture to say that if it’s money we are trying to raise, we already have a successful working model based upon the aforementioned ideas: It’s called Las Vegas.
Regardless of what name we attach to this program, it’s a proven fact that most Americans will part with their money for a good cause or quality services in return for their outlay and it’s time that the geniuses in Washington get over their dour, old-fashioned 20th century ideas of raising revenue and get with the new 21st century program. Talk about a new vernacular for “Sin Tax!”
