Dakota Beacon

Prudent people, regardless of educational background, when making spending decisions ask themselves, “Am I getting my money’s worth”? Taxpayers should ask, “Am I getting my taxes worth? Even more important is to ask and understand exactly what my real tax bill is. When government spends our tax dollars they either go to consumption (i.e. salaries, utilities, etc.) or capital assets (i.e. roads, buildings, sidewalks, etc.). When consumables are purchased and consumed there is no residual asset or benefit. With capital assets the life and value extends past the time the asset was acquired. This is easy to see and understand. What is less clear is what actually happens when government spends money it does not have – i.e. borrowed funds aka debt. Debt is, in reality, deferred tax liability. If the debt is used to purchase capital assets then when it is paid at a future date the person paying is receiving a benefit for his tax payment. When the debt money is used for consumables, then the future taxpayer is getting nothing in return for his tax payment – he is simply paying someone else’s debt. The Office of Management and Budget published its Mid-Session Review of the Budget of the U.S. Government for Fiscal Year 2010 in May of 2009. This budget projects Federal income and expenditures over the next 10 years based on the current Administration’s planned programs. Included is projected interest on the debt. With respect to Congress’ work and spending habits, Rep. Elijah Cummings (D-Md.) said, “Don’t you worry, you’ll get your money’s worth.” What shouldn’t we worry about? How much of our money is actually being spent? Federal individual income tax collections for 2009 are projected to be $904 billion; Federal deficit spending is projected to be $1,550 Billion. The difference is your tax liability… for 2009 only! If Congress were honest, it would not borrow to fund more than one third of its spending. It would tax to cover its expenditures. Of course that won’t be done because if it were, taxpayers would realize what is happening to them and not permit it. The average American (that actually pays taxes) pays at a 22 percent rate. If taxes for 2009 were at a rate to cover the deficit, the average rate would have to be increased to 59.7 percent. This does not include the 15.2 percent that comes off the top of every paycheck to fund social security and Medicare. When that is added, the federal tax impact – would be – 74.9 percent. This outrageous and impossible figure does not include state or local taxes – income tax, sales tax, property tax, liquor tax and on and on. The impact of debt funding of government is actually greater when you add the interest on that debt. American taxpayers’ actual federal tax liability, including interest, exceeds 75 percent. Congress has no plans to stop deficit spending. According to the OMB Congress intends to add more than $10 ½ trillion to the federal deficit between now and 2019. This is in addition to more than $11 trillion in debt taxpayers are already on the hook to pay. OMB projects that annual interest on the current debt will be $173 billion for 2009 and by 2019 annual interest will reach $829 billion. We hear about environmental sustainability, yet what about economic sustainability? We hear about the importance of conservation for future generations, yet what about economic conservation to ensure the wellbeing of future generations? Congress certainly has no concerns about either and has been and is destroying the economic future of our children, our culture and our country. Today special interests, not reasonable or rational decision makers and leaders, write the laws and direct the spending at all levels of government. These interests ply us with heartbreaking stories of the “good intentions” motivating them. Everyone knows what road is paved by “good intentions”. We have moved far down this road. Unless we are willing to stop and reverse course we will arrive at that destination. Then heaven help us.