In the recent past, politics has become very polarized in this country. It began on a small scale with Ronald Reagan, but really escalated during Bill Clintons years in the White House and then became even more bitter following the 2000 election for George W. Bush.
George Bush ran on being a uniter. I believe this was a mistake. To be united, both sides must be willing. Once one man declares he will unite the two sides, the other side, if unwilling, can only make him look bad by being obstinate on everything that comes from the White House.
This trend of the past seven years has narrowed down much of the debate between the two sides to two very distinct positions. One side believes that government has the solutions. That government can move the country for the people. The other side believes that the solutions reside within the people. The classic liberal vs conservative. This is also known as the Community Society vs the Ownership Society.
See the following chart comparing the Community Society to the Ownership Society:
Community Society ***********Ownership Society
Government-Social Security ***Your personal account
Government Medicare and Employer Health Care*** Health Savings Accounts and Individually owned health plans
Employer Pension Plans ***Your Individually owned Savings Accounts
Your Personal Savings ***Your Enhanced Savings through Consumption Tax
The above chart is enlightening. Government believes that retirement responsibility
should be through Social Security and forcing employers to provide pension plans.
While the Ownership Society believes that people can save for their own retirements,
do a better job of it and provide themselves a higher and better prepared income for
Social Security was begun in the 1930’s under the leadership of Franklin D. Roosevelt.
However, even President Roosevelt said that it should become privatized. In addition,
he said that Social Security is only meant as a supplement to whatever people do on
Social Security money was moved from it’s own Trust into the General Fund which then
allowed Congress to borrow the money. Pension plans were taken by employers when
they ran short of funds. This happened in Germany in the 1980’s and then spread to the
In two instances of forced savings by government and employers, both have failed.
Congress in one instance, and employers in the other. Yet ,government feels they can
do a better job for people’s retirement than the people are able to do for themselves.
As we know now, Social Security will be operating in the Red starting in 2017 and will
be exhausted by 2041. The only thing said to this point is that for Social Security to
continue beyond 2041 is to reduce the benefits by 30% in 2041 or taxes would need to
be increased. So if you’re receiving $1,800 per month, it will be reduced to $1,260 per
month in 2041. By the way, if you that’s beyond your lifetime, think of this. People born
in 1976 are the ones first affected. Those born in 1976 turn 32 this year!
Then there is health care. Take a look at the next chart:
Community Society -Health Care- Ownership Society
Opposes Individual Accounts ****Favors Individual Accounts
Mixed feelings on “Cap Adjustments ****Opposes Tax increases
Favors “locked box” on Trust ****Favors Wage to price indexing
Favors Universal Health Care Coverage ****Opposes Universal Health Care Coverage
Costs imposed on employer/individual/government*** Favors Free Market Health System
Tax subsidy for small employers ***Tax deductions/credits to purchase health insurance.
Expand Medicaid & SCHIP ***Encourage State initiatives
Drug Price Negotiations ***Expand HSA’s
Pay for coverage thru Medicare Restructuring/expired ***Limit SCHIP
Again, the Community Society advocates government as shown in the chart above.
Let’s look at how well the government has done with the health care they do have now.
Medicare will be operating in the red during the year 2008. That’s THIS YEAR!!
Medicare will be exhausted in the year 2019. Those born in 1954 will be put onto
Medicare but there will be no money to pay for it. Do we really want to turn our health
care over to the government that hasn’t been able to run the health care system they do
They will put the costs on the employer, the individual and the government. Government
doesn’t earn any money. They only confiscate it. So while they will be responsible for
writing the check for the health care, they’ll get the money to write those checks from
employers. The employers won’t pay for this out of the kindness of their hearts, so
they’ll collect the money from the employee. That’s you and I.
The ownership society advocates people finding their own health care and paying for it.
There are plans out there that not only pay for health care, but also help the people
save money within their health care plan. Again, the solution found within the people
and not from the government….AND IT’S AFFORDABLE!!
Finally, there is tax reform. Again, the community society wants to increase taxes. The
Alternative minimum tax has affected people in ways that weren’t planned, but the
Community Society says to reduce it, maybe eliminate it, but not without making it up
They are willing to reduce SOME of the capital gains, but not all and they want to raise
the death tax.
The ownership society wants more and more to move to the Sales tax, also known as
the Fair Tax. They want to make the Bush tax cuts permanent and they want to reduce
and/or eliminate the Estate Tax. See the chart below.
Community Society -Tax Reform- Ownership Society
Eliminate/Reduce AMT ***Consumption tax
Some cap gain reductions*** Sales (Fair) tax
-Business startups*** - VAT
First $250 ***Make Bush Tax Cuts permanent
Raise the Estate Tax Exemption Level ***Eliminate/Reduce Estate Tax
So what happens if they let the Bush tax cuts expire? The answer is, on January 1, 2010 our taxes will increase. I’ve posted the following before, and I’ll do it again. This comes from www.taxfoundation.org/publications/show/151.html
Taxes during the 1990’s *****Taxes under Bush
Single making $30 K- Tax $8,400 **Single making $30k-Tax $4,500
Single making $50k- Tax $14,000 **Single making $50k-Tax $12,500
Single making $75k- Tax $23,250 **Single making $75k-Tax $18,750
Married making $60k-Tax $16,800** Married making $60k-Tax $9,000
Married making $75k- Tax $21,000 **Married making $75k-Tax $18,750
Married making $125k-Tax $38,750 **Married making $125k-Tax$31,250
It is mind boggling that the Community Society can get away with saying that the rich got the tax breaks while the poor didn’t when looking at the facts.
If the Bush tax cuts are allowed to expire, we’ll all be getting an income tax increase less than one year after the new President takes office. In addition, if the new President is to take on Social Security we can expect yet another tax increase. If they take on Medicare, we can expect another tax increase, and if they work on health care, we can expect a huge tax increase to pay for “free” government health care. One thing is certain, nothing is free. By the way, Happy Tax Freedom Day. From January 1, 2008 until today, you've been working to pay your taxes. Today, you begin earning money for yourselves.
If the tax cuts are allowed to expire, tax freedom day will move back into May.
Power is in the people, but "loaned" to the government.
I welcome your comments.