Presidential Math

The President has made it pretty clear that he wants to solve the fiscal crisis by increasing taxes on the rich.  In my last post I clearly showed that millionaires (people making $250,000 or more), pay over 50% of all personal taxes.  While I totally agree that we definitely are going to need more revenue, more importantly, we need REAL expense reduction.  The government has grown far beyond our ability to pay.  But that will have to wait for another column.

Today's post is to expose the ridiculousness of the President's proposal to raise taxes on the rich.  Again, please remember that if your household makes more than $250,000 a year you are a "millionaire", according to the President.

So the President has proposed raising tax rates on "millionaires" from the current top rate of 36% to 39.6%.  This combined with other changes to the tax code would result in $849 billion in new revenues over 10 years.  What the President and media fail to mention when they quote these figures is that the budget deficit just last year was $1.1 trillion.  So $849 billion over the next 10 years doesn't even cover the deficit this administration created just last year alone.

So instead of playing governmental games with these figures let's look at what this means annually.  The President's own budget for 2013 shows that the government will spend $3.8 trillion and plans to collect $2.9 trillion in revenues.  So much for a balanced budget.  If we stay on budget we will add another $900 billion to the deficit.  So the extra $84 billion that we plan to get from the "rich" in 2013 will only cover a very small portion of the planned deficit.

In fact, in October, the first month of the new fiscal year for the government, the deficit is already $120 billion!!  So we have already exceeded the amount we would have collected from the rich.

We have a spending problem, not a revenue problem.  Until politicians are willing to accept this reality we have no hope of solving our fiscal issues.