President Franklin D. Roosevelt's trusted advisor Harry Hopkins, (together below) the Administrator of the Works Progress Administration (WPA), a key agency of Roosevelt's New Deal, was the author of the notoriously cynical statement: "We will spend and spend, and tax and tax, and elect and elect."
The quote appeared first in a 1938 New York Times report by veteran political reporter, Arthur Krock. It has since become the campaign credo of generations of leftist Democrats-- Barack Obama included.
The slogan embodies an economic-political theory of raising the tax burden on the middle and upper income Americans so that politicians can spend more on socialist government programs that they think will produce mass votes for them.
It could be considered as a corollary to Obama's inadvertent "Joe the Plumber" moment of truth about "spreading the wealth around."
New Deal or Raw Deal?
Today President Obama, true to his New Deal antecedents, proposed a $3.8 trillion budget for fiscal 2011 that will add to the bloated size and scope of the federal government. His plan includes big increases in personal and business taxes, only modest, cosmetic spending cuts and still more spending for stimulus and bailouts.
I have previously commented on the fact that the U.S. government is already bankrupt and now the new Obama budget projects the largest annual deficit in U.S. history -- $1.6 trillion.
The Obama budget calls for nearly $1 trillion in tax increases on upper and middle income families, largely by allowing Bush tax cuts to expire. In all, the president's budget would add $8.5 trillion to the federal debt through 2020, pushing the debt as a dangerous percentage of GDP to 77% from 53%.
Kenneth Rogoff, a Harvard University economist who has studied other countries' experiences, says that level could push the U.S. toward an economic collapse where interest rates could soar, the value of the dollar could plunge further and the economy could face another major crisis. "We will hit a point where it comes on us very quickly, and you don't want to edge up to that point," Mr. Rogoff said. "Going beyond 80%, you're taking a real chance."
I suspect that most Americans have little or no concept of a "trillion" dollars. (It used to be a "billion" was thought of as a monstrous amount).
To help you understand just how enormous a trillion is, I turned to Vernon K. Jacobs CPA, (below) a leading expert in offshore tax matters and a long time associate of the Sovereign Society.
How Much Is a Trillion? - Vernon K. Jacobs
With all the news and talk about taxes and deficits and such, I’d thought I’d share a few statistical perspectives with you – just for fun and cocktail conversations.
To put the number in some perspective, there are approximately 300 million people in the
Based on an analysis of the 2007 federal budget, it appears that this budget total does include Social Security and Medicare tax collections, which represents about 1/3 of the total. Another 1/3 is from corporate income taxes and various excise taxes, with a little over 1/3 from personal income taxes. So that means that the average household would be paying about $9,000 of income taxes.
According to the National Taxpayer’s Union, the taxpayers in the top 50% (as measured by adjusted gross income) paid 97% of the individual personal income taxes in 2005. This means that about 50 million households paid nearly all of the personal income taxes. That works out to an average of about $18,000 of income taxes per household in the top half of the income category – which is in addition to their share of the payroll taxes and other taxes.
If we were to assume that the payroll taxes for Social Security and Medicare and the other taxes were shared equally, that would amount to about $18,000 per household. ($1.8 trillion / 100 million households).
And the top half of the income earners would also pay an extra $18,000 per household for income taxes. But 60% of the income taxes are paid by the top 5% of income earners, which means that $600 billion of income taxes is being paid by about 5 million households. That works out to about $120,000 per household for those in the top 5% of income earners.
And some politicians still are saying that the “rich” aren’t paying enough taxes!
As Fox Business News' John Stossel likes to say, "Gimmie a break"!
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You can learn all about "going offshore" personally and financially, about legitimate and legal offshore financial centers in my just published 4th edition of Where to Stash Your Cash Legally: Offshore Financial Centers of the World. Find out how here.
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