Tax “Freedom” Looms, But No Time to Celebrate
April 8, 2010
The Tax Foundation has completed its annual measurements regarding “Tax Freedom Day,” and finds that April 9 is the big day, this year. Translation: all of you have been working for Obama until now; from now on you work for you – almost.
You see, “Tax Freedom Day” doesn’t take into consideration the Federal deficit. Somebody’s got to pay for that, don’t they? Notes the Foundation: “Since 1948, when Tax Freedom Day was first calculated, the difference between what governments are spending and what they’re collecting has never been as great as during 2009 and 2010. If Americans were required to pay for all government spending this year, including the $1.3 trillion federal budget deficit, they would be working until May 17….”
And if some prognosticators are right, Tax Freedom Day may become a distant memory–especially if Obama keeps going down the socialist road. Notes Shawn Tully, Senior Editor at Large for CNNMoney.com, with reference to the “Fiscal Commission” recently created as part of the health care fiasco, “The Administration is acknowledging that the immense weight of the national debt poses a dire threat to the economy, unless America takes radical action….Even before the bill became law, many economists – and this writer – argued that only one tax could raise the giant revenues needed to escape a ruinous rise in debt: a European-style Value-Added Tax, or VAT.”
Tully goes on to point out that the health (so-called “reform”) measure is a debt laden monster for three particular reasons:
- A whole bunch of the dough needed to cover all of the wonderful newly promised entitlements is going to have to be borrowed from Social Security and Medicare which, themselves, are already fiscal fiascoes.
- New “draconian price controls” to be imposed on the medical service providers in this country will likely force hospitals to close and doctors to find something else to do, rather than become enslaved to government dictated financial lids.
- Projections on the number of Americans who will collect health care subsidies are unrealistic at best. “That figure will be double or triple the official projections,” opines Tully.
Another unsettling aspect to all of this is that notwithstanding the CBO’s
projection of $143 billion deficit reduction in the first decade of “reform,” the Democrats have failed to account for the looming, so-called “Doc Fix,” consisting of a more than 20% increase in reimbursement schedules. In a letter to Congressman Paul Ryan (R-Wis), the CBO says that including the over $200 billion in Doc Fix would erase the fiction of deficit reduction, instead creating a shortfall of $54 billion.
And the list of problems with this health “reform” mess goes on. Sooooo, get ready to start paying what is essentially a sales tax, to your poor old Uncle Sam, on just about everything you purchase, if a VAT does, indeed come along. And in doing so, feel just like all the rest of your European socialist brethren whose standard of living is right down there around where yours is headed.
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matter. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He is also a contributor to the recently published 13th edition of Tax Savvy for Small Business. He may be reached at 831-7288, and welcomes comments below.