Ken Connor
The road ahead: tax and spend or cut and save?
By Ken Connor
November 20, 2010

As Congress' lame duck session gets underway, the nation is watching to see if the Democrats will attempt to capitalize on their last few weeks of hegemony before a huge shift in power occurs. Foremost on the agenda are the soon-to-expire Bush tax cuts. Happily for the middle class, there appears to be universal agreement that those cuts should be extended. The real contention lies with the question of whether or not to extend tax cuts to those Americans earning over $250,000 a year.

Aside from the obvious political implications of using the lame duck session to ram through a tax increase that would undoubtedly fail if put forward under the new Congress, there are two key issues at the heart of this debate. They represent different sides of the same coin: Taxing and Spending. When it comes to taxation, the real issue is how the federal government views the earnings of the American people. With regard to those earnings, does the government have an entitlement mentality? The second involves the American people's view of government programs. Concerning such programs, do the American people have an entitlement mentality?

In discussing his opposition to an across-the-board extension of the Bush tax cuts, President Obama has repeatedly insisted that the government "can't afford to borrow and spend another $700 billion on permanent tax cuts for millionaires and billionaires." Nancy Pelosi echoed the President's position in an interview with NPR: "It's too costly. It's $700 billion. . . . That's a lot of money to give a tax cut at the high end. And I remind you that those tax cuts have been in effect for a very long time, they did not create jobs."

It's probably worth pointing out to the President that earning $250,000 a year doesn't make one a "millionaire" — or a "billionaire" for that matter — and Nancy Pelosi's implication that tax cuts are somehow responsible for the nation's current economic woes is just plain silly. More importantly however, in making their arguments against tax cuts for America's top earners the President and Ms. Pelosi reveal an attitude of entitlement that pervades the government at virtually every level. To say that the government "can't afford" a tax cut is to say that the government has already laid claim to the $700 billion in question. As far as the politicians are concerned, that money does not belong to those individuals who will get up and go to work every day for the next year in order to earn it; it belongs to the government. In other words, if a politician decides that you make more money than he thinks you need, that extra money isn't really yours, it's his — his to appropriate, his to redistribute, his to use to "stimulate" the economy.

How can we trust our representatives to lift us out of the economic chasm we are in when, deep down, they don't really believe that we are entitled to keep the money we earn and they are not good stewards of the money they take from us through taxation?

On the flip side of the coin, if the American people reject tax hikes, then they must be willing to embrace significant cuts in spending, which will translate to cuts in government benefits and services. History shows, however, that people do not respond well when their government "entitlements" are threatened. When we talk about cutting spending, it's inevitably the "other guy's" benefits and programs we want cut, never our own. We love our Social Security, our Medicare, our government pensions, our government-backed mortgages, and the like.

The time has come for discipline and decisiveness. Our government stands at fork in the road, and it will be the American people who ultimately decide which direction we will travel. If we are unwilling to make the sacrifices necessary to rein in government spending and regain fiscal solvency, then we better get used to high taxes, high unemployment, and greater government intrusion into our everyday lives.

We can have fiscal discipline backed by self-denial and self-reliance, or we can have fiscal decadence backed by insolvency and dependency. Which vision is truer to America's Founding vision? Which one can we afford? Which road will take us back to prosperity and independence? Do the politicians and the people have the will for what it will really take to get us back on track? Only time will tell.

© Ken Connor


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