Your President has been going around the country talking about taxing millionaires and billionaires. This is an election year and every four years it is vogue to address income inequity and "soaking the rich."
The difference this year is that the rhetoric is louder and more shrill. And, unlike other years, the President is carrying this banner rather than big labor bosses or socialist elected officials.
Just who these "millionaires and billionaires" of the country are may surprise you. We need to look at some demographics of the country to see who will pay more. A glance at the country's balance sheet and income statement will tell us why we need to change the status quo.
Let's start with where the financial condition of the country now stands. When President Barack Obama assumed office, the U.S. was running a deficit of about $1.5 trillion dollars each year. The deficit had just blossomed to that point under G.W. Bush and stood at $10 trillion.
In other words, the sum total of all accumulated deficits from George Washington through G. W. Bush was $10 trillion as is expressed by the level of the national mortgage owed, aka the National Debt. This President, through his spending habits of your money, will have the debt up to $16 trillion by the time of the November election.
Now I know that it's all G.W. Bush's fault because my socialist pals all tell me that. However, high school and undergraduate college takes four years and at what point does your school's reputation depend on you, rather than a previous graduating class? Is it when you are a freshman, a sophomore, a junior, or a senior? My point is that the President is in his senior year. When does the responsibility for the national debt and the deficits become his property?
How big is this $6 trillion figure on a per-family basis? Well, let's just divide the debt by 330,000,000 which is around the number of folks in the country and we find that he has added $18,181.82 to each citizen's indebtedness, or $72,727.27 for a family of four in just four years.
The average household income is about $54,000 annually and this means that half of the U.S. families earn less and half earn more. We also know from tax statistics that about 45 percent of America does not add to the government's revenues through income tax, so only about one-half of us are going to pay for the debt. That makes your family's share is around $145,000 in round numbers.
The President has dropped his "raise the taxes for everyone over $250,000 in income" proposal because there just isn't enough income. The new proposal includes taxing your accumulated wealth. His new tax would includes all wealth your savings and checking accounts, the house equity, the boat, the whole enchilada.
And who are the "millionaires and billionaires?" No, they are not those who make a million a year, as there are simply too few of them. The group includes those people but it includes you too.
I fiddled around with the present value of a $54,000 annual income and added it to a modest house and some retirement accounts. The sum total was around one million dollars. Welcome not to the land of the rich, but rather to the reality of taxes necessary to support huge (46 percent) overruns year after year by the federal government. You guys above $54,000 income are the millionaires too!
What are the choices for our country? There are three: reduce the deficit by reducing governmental programs, increase taxes to cover the deficit by 46 percent, or de-value the currency by an amount which would de-value the debt held by folks around the world.
It's your choice, you millionaires.
Stephen Fletcher was graduated decades ago from Cornell University with an A.B. in Economics and from Michigan State University with an M.B.A. He has lived and worked in the decades from graduation until now in the Alpena area. He thinks that Economics is fun and interesting.