Ron Paul: No Tax Hikes! Cut Government Spending Instead

by Ron Paul

Senator Jeff Sessions, ranking member of the Senate Budget Committee has pointed out that our per capita government debt is already larger than Greece’s. Per person, our government owes over $49,000 compared to $38,937 per Greek citizen. Our debt has just reached 101% of our Gross Domestic Product. Our creditors see this and have quietly slowed down or stopped their lending to us. As a result, the Federal Reserve has been outright monetizing debt as a way to patch things together and keep the economy on life support a little longer. There is rapidly shrinking demand for our debt, and confidence in the dollar is falling. This phenomenon is hidden only by the fact that confidence in all other fiat currencies is falling faster.

None of this seems to really alarm the administration, obviously, as they have just released a budget that accelerates spending and borrowing. The reason the debt and deficits plague the economy, according to this administration, is that the American economy is not taxed enough. Therefore, hidden in the fine print of the budget is a provision that ramps up the corporate dividends tax rate from its current 15% to 39.6%. In addition, certain deductions and exemptions will be phased out; an additional 3.8% Obamacare investment tax surcharge will be tacked on, bringing the effective dividend tax rate to 44.8% in 2013. Keep in mind, this is not just a tax on big business, this is a tax on anyone who depends on dividend income to live – retirees will be hit hard by these changes and dividend yielding stock prices will adjust downward rapidly to reflect their decreased value.

Not only this, but the Obama administration is worsening the uniquely American policy of taxing income of US based companies earned overseas. No other country presumes to tax globally in this manner, so it amounts to a huge penalty for basing a company in the US. Companies have been able to manage this penalty by deferring taxation until it is repatriated or by paying dividends. What will happen to US based businesses with strong international ties if these allowances are abolished as the Obama administration proposes? A massive wave of permanent capital flight will undoubtedly cause the already high levels of unemployment to rise.

Businesses are struggling and failing in this economy. The government ultimately depends on a healthy business climate to provide jobs and a tax base. It is penny wise and pound foolish to add to business tax burden in a misguided attempt to close the colossal gap between our government’s revenue and spending. Rather than crippling and absorbing more of our shrinking economy, government needs to be drastically cut – not in 10 years, but immediately.

Those who understand the underpinnings of the dollar and how the Federal Reserve works have known for some time that we are on an unsustainable course, that major chaos is in store if nothing is done quickly to reform things. Politicians pay lip-service to reforms that never materialize or turn out to be at best small and meaningless, or at worst actively harmful. It seems more and more inevitable that because the necessary changes would be too inconvenient for the elites to enact now, we will get them later Greek-style, through collapse and chaos.


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  • Surfisher

    The only way to prevent voter fraud is to get a receipt.

    When I invest into a product — buying a steak at the supermarket per say — they give me a receipt for my investment (shows the item code# and the date and time of my investment (purchasing in good faith, upon accountability by vendor, that I received the right product))!

    Elections MUST be held to at least the same standard, as buying a steak — when people invest into their Right To Vote, give them a VALID receipt for their investment!

    If States can issue millions of Lottery Tickets weekly, that cannot be forged — why not be FORCED to do the same during the rare elections?!

    Without a RECEIPT, what government assurance do you have that your VOTE actually COUNTED…?!

  • Thaddeus Kosciuszko

    The Great Recession

    Economists whose roots are implanted in reality (Austrian) agree that World War II was the catalyst for ending the Great Depression. Believe it or not, we paid for that war by raising taxes and tapping into the personal savings of the American People. However, those options are so far beyond the realm of current day reality, that rational Americans understand the seriousness of our economic calamity.

    First, tax burdens are much higher than they were prior to WWII—prior the burden of Democratic Party’s quadrillion dollar acronym. Secondly, Americans purchased $186 billion worth of war bonds (a believe it or not worthy of Ripley’s recognition), that constituted 3/4 of federal spending from 1941—1945!!!

    Today, Americans do not have enough savings to pay for our current spending, let alone to pay for an expansion in government spending that would = $20 trillion in today’s $$$. Even if we could convince the Chinese to loan it to us (they are not that stupid), we could never pay it back.

    The goal of a Capitalist economy is to increase productivity and raise living standards. During WWIi, 17 million civilian jobs were created and industrial productivity increased by 96%—the most extraordinary expansion of an economy in the history of the world. However, the enormity of our increased productivity was directed towards the front lines, enabling us to overwhelm our enemy’s lines.

    The arithmetical results of wartime spending were astonishing, but it was the cutbacks in domestic spending that enabled it.

    The simple truth is that we cannot spend our way out of “The Great Recession;” no matter how many Keynesian fairy-tales you hear. Even if we spent on infrastructure, we still lack the means to fund it…and even if we did…why would we even consider it?

    For the D & R gangs’ spending decisions are crony-based—not economic-based. And building thousands of bridges to nowhere is not a sensible economic policy.

    What we need is more savings, more free enterprise, more production, and a return of American competitiveness in the global economy.

    Indeed, in 2012, we need Americans working their asses off in the private sector creating, innovating and making things that don’t launch missiles, explode, or kill people.

    To do this, we need less government spending, not more.

    T Kosciuszko

    Life, faculties, production—in other words, individuality, liberty, property—this is man. And in spite of the cunning of artful political leaders, these three gifts from God precede all human legislation, and are superior to it. Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place. ~ Frederic Bastiat

  • Lord Acton said it best…

    If there is any presumption, it is the other way, against the holders of power, increasing as the power increases. Historic responsibility has to make up for the want of legal responsibility. All power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority.

    Money is power; or alternately, a means to acquire power. Thus, when politicians, whose sole objective is to acquire power, have the ability to spend, they will.

    The reality of Fedgov management immorality: If the SSTF had been managed by people actually cared about the People, they would have evaluated and adjusted to the factor of Boomer demographics. But the People’s Representatives didn’t care about that.

    The only thing they were concerned with was how to enhance their own power.

    American workers invested a $2.7 Trillion (surplus) in the SSTF. The SSTF trustees took this cash and gave it to Congress in exchange for Treasury Bonds. Congress took the money and spent it on votes.

    However, Congress did not combine these activities with the general fund and treated it as an off-balance sheet liability (sound familiar). Now, American workers must ante up another $2.7 Trillion, to “service” this liability.

    How ‘bout them returns?…!

    We saw the results off-balance-sheet accounting had on Enron’s employee retirement plan. Why anyone would support the fedgov’s policy of employing the same accounting practices in managing the SSTF is beyond my realm of comprehension. Enron’s execs went to jail, as did Bernie Madoff. However, those who looted the SSTF merely laugh it off—and demand that we give them more.

    If you listen closely-you can detect the resonance of laughter. For Enron’s former lobbyist works for the Federal Reserve; thus, the laughter resonates anew.

    Back to the SSTF: Those who were swindled by Madoff, had a choice; the worker who was swindled by the SSTF did not. In a free society, people are not forced to deal with one another. However, in a state controlled society, coercion and force are standard operating procedures. Whenever an individual is made to act without their own personal voluntary consent, their rights are violated.

    My belief in Capitalism is not founded on hope or wishing—rather, on reason and morality.

    Capitalism is the only economic system that is compatible with freedom, for in a capitalist society, all human relationships are voluntary.

    In nearly every case cited by statists and Blind Sheep as an indictment of free enterprise, and as an argument for fedgov regulation, it was determined that the transgressions were made possible by government intervention in business in the first place.

    The evils, popularly ascribed to big oil, bankers and industrialists, are not the result of unregulated industry, but of fedgov power over industry. The villain is not the Capitalist, it is the legislator. It is not free-market, but the departure from the market of “free.”

    Regrettably, most of our Representatives have legal backgrounds and as a result, they are unable to comprehend even the most basic of economic principles—their understanding is limited to “power.”

    Mr. Paul understands that our economic woes stem from the departure from the market of free; and that we must not let our economic policies be set at the table of a K-Street-dead-beat. He advocates eliminating income, cap-gain, and death taxes, for he believes those ideas are superior to any variety of K-Street stimulus-feat.

    What is really needed is a repeal of the commerce clause and an amendment to the Bill of Rights that says: “Congress and the States shall make no law interfering with production and commerce, foreign or domestic.”

    T Kosciuszko

    Principles, are either valued, or they are not.

    • Why do you think that 1% of the population controls 38% of the wealth?

      Wall Street didn’t have to take anything, for our Representatives simply traded it, for lunch engagement on K-Street.

      It is beyond my realm of comprehension how anyone could believe that they created a 71,684 page tax code and 134,723 pages of fedregs to “help the People.”

      Many “regulations” have been put in place to protect the interests of those represented by K-Street dead-beats. You see, when you are rich, powerful and connected, you get to write the rules that give you a leg up on the People.

      If you study the DC playbook, you will see that someone changed the rules in the middle of the game. We no longer have a government of, for and by the People; rather, we have a government of, for, and by two corrupt political parties.

      And they have re-written the rules, for the benefit of those they do lunch with on K-Street.

      T Kosciuszko

      If you can accept that there is nothing wrong with a Human doing some good for themselves, while he does some good for the world, you will understand the morality of free-market Capitalism.

      • Surfisher

        Ron Paul is the only one who wants to restore our Freedoms and Prosperity (and get us out of the business of war making).

        The rest are for even more ‘people control’ ; see what FOX aired in this show: “Illegal Everything” — a Must See!

        Shows how Americans are “breaking” the law daily, without knowing it, because of the hundreds of millions of rules and regulations. And how cops are using this as an excuse to arrest anybody for just about anything!

        From the Nation with the most Freedoms in the civilized world, we have now become the one with the least!