A Call for Higher Taxes Part II [Reader Post]

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Crossposted from Brothers Bob Blog

With the looming budget showdown the President and Democrats are standing steadfast in their assertion that we can not make any budget “cuts” without what they call “increases in revenue”, or in layman’s terms, “higher taxes on the people who actually create real jobs”. I had written previously about my own tax increase proposal, but where it differs from Democrats’ suggestions is that rather than punish activity that creates jobs, mine would punish activity that destroys jobs, and in turn lead to hiring and greater economic growth. Since we know that my proposal has no chance of seeing the light of day I started thinking along the lines of the current debate – entitlement reform, increased revenues – and then it hit me.We have a serious entitlement problem. What would you say if I told you that we have an entitlement program that is being enjoyed by over 6.5 billionpeople who contribute nothing in tax dollars to fund it? That’s right, I am talking about the US military budget. Despite the fact that according to the U.S. Census Bureau only 4.5% of the world’s population lives in the United States, Uncle Sam is responsible for 43 % of the world’s military spending. You read correctly; nearly half of all expenditures to keep the world safe are being funded by fewer than one out of every 20 global citizens. Whether it’s taking down terrorist regimes, rebuilding countries ravaged by war, keeping shipping lanes safe, it’s American treasure and lives that shoulders most of the burden. So to borrow the vernacular that the left likes to use in referring to America, “Isn’t it time that the world paid its fair share?”

The best part is that there is something for everyone to love:

  • Other countries wouldn’t even have to pay directly – it can be paid to the US by increasing their dues to the United Nations, which can then be disbursed to the U.S.
  • U.N. bureaucrats will jump at the chance to launch any program that allows them to become middlemen with plenty of graft opportunity
  • Tax levels can be worked out by per capita GDP, and include extra penalties for countries that contribute to the need for global military (read: Iran, North Korea)
  • The US government has found more revenue!
  • The biggest beneficiaries, such as Europe, Canada and South Korea will be thrilled to pay this tax – really! If you listen to the likes of Tom Friedman or Joe Biden, paying taxes is one’s patriotic duty and increases ones appreciation for for being an American, or in this case, Global citizen. This will naturally give the rest of the world a greater appreciation for the United States!
  • Any countries that don’t like the idea of this tax can receive tax credits by increasing their own military spending. Discounts would be determined by a DC bureaucracy that would weigh how much the spending increases would improve global security (eg: the United Kingdom) or detract from it (Somalia,Lebanon Hezbolah) to determine the amount of the tax credit, or in the cases of the latter, tax penalty.
  • Further tax credits can be granted to nations that actually put their own soldiers in the line of fire in places like Afghanistan, which will further complicate the tax code to the delight of our bureaucracy, not to mention giving more muscle to our diplomats who deal firsthand with these countries.
  • The US military might not like this since the scope of its mission will decrease as nations decide to start fighting for themselves, but these changes would not happen overnight. It will be easier to retire obsolete weaponry and as the need for soldiers decreases we can allow them to retire to private life or use them to oversee the massive bureaucracy that will be needed to administer this new tax code. Or more spending can go toward high tech weapons that will allow the US to maintain its superiority thanks to the combination of increased revenues along with the need for fewer bases and soldiers. Of course, their mission won’t go away completely since…
  • More countries around the world undergoing military buildups will inevitably lead to more wars, for which the US will be needed to eventually intervene. To many leftists a few countries being destroyed and their civilian populations slaughtered would be a small price to pay for not having the US military standing over the world’s shoulder.
  • Defense contractors may be unhappy at first as they lose lucrative contracts that they had spent cultivating with our military, but with more countries competing for power we can expect greater demand for weaponry to prepare their now necessary armies!
  • The libertarion wing of American politics will love pulling back US intervention, and we can finally get an honest look at how well foreign countries’ generous entitlement programs really work when paying for their own defense gets factored into their budgets.

I know what you’re thinking – “This will never happen in a million years!” You are right, and I know that some of these assumptions are over the top. No, I don’t think that a global military buildup or more wars will be good for anyone. But the world has taken the American security blanket for granted for too long, and given our steady economic decline toward a Greek-style culture of dependency, to use a favorite term of the left, it is not sustainable.

I have no delusions that my proposal would ever see the light of day, but it would be a good starting point for a conversation that is just as inevitable as it is overdue.

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Our present unsustainable level of defense spending is weakening the nation rather than making it stronger. We’re paying for excessive military power using a credit card, exercising that power all over the world using a credit card, and then using a credit card to to maintain the frequently questionable results. Meanwhile, we’re allowing the internal infrastructure that’s totally essential to industrial strength and long-term national security to quite literally fall apart.

The predictable result of such an imbalance is an over-size, over-extended military apparatus that’s no longer affordable, protecting a broken down, second-rate nation at home. When nations and empires in the past have reached that point, they have defeated themselves.

Our Defense spending is roughly 600 to 700 Billion if you consider various PMC contracts that logistically support Military movements…

Our Healthcare Law passed into effect will cost 1.3 Trillion dollars for its first 6 months of operation.

Our Social Security unfunded Liablities will be a worth of roughly 100 Trillion dollars..

United State’s Interest payments on incurred debt is 3 times that of National Defense payments.

So, Greg, how do you explain why one of the smaller portions of our Budget is suddenly such a threat to fiscal responsiblity? Oh wait, I guess it has something to do with having a Standing Army to fight threats to the Nation, which do exist. I guess you don’t like war, well tough luck. As long as some Nation has the intentions to harm us, Defense spending is a need not a want. Entitlements are a want, not a need.

Military spending is not “one of the smaller portions of our budget”, nor has it been for decades. The budgeted amount for any given year doesn’t reflect the true total costs of military activity.

The officially budgeted total expenditures for the wars in Iraq and Afghanistan to date are around $1.219 trillion.

The Eisenhower Research Group recently completed a study that estimates the true total cost to the nation of the wars in Iraq and Afghanistan to date to be over $4 trillion.

@Mr. Irons, #2:

A $100 trillion in unfunded Social Security and Medicare liabilities…

What that figure represents is the total amount of obligation that critics project will eventually have been undertaken by the Social Security and Medicare systems over time, if those systems remain in place indefinitely.

What the “logic” of this observation neglects to take into consideration is that the money isn’t sucked into the system to disappear forever, as if it were flowing into a black hole. The money paid to recipients is spent by recipients, moving quickly back into the general economy. $100 trillion is a measure of how much cycles in and back out again.

How many times does any given dollar get spent during the course of its journey through the U.S. economy? Let’s say it’s involved in 200 separate transactions. Would we then conclude that it has in some fashion taken on a value of $200?

The point being, there will be no moment in time when the economy suddenly has to come up with $100 trillion to cover our Social Security and Medicare obligations. What we should really be thinking about is what the maximum demand on the economy when the the largest number of retirees are entitled to payment, and how long that level of demand will last. Any adjustments necessary to assure sustainability must be made with that in mind–not the total of all obligations over the entire life of the program.

Re: #4; a correction to the last paragraph:

What we should really be thinking about is what the maximum demand on the economy will be when the the largest number of retirees are concurrently entitled to payment, and how long that level of demand will last.

Tax proposals:
1. Abolish all mandates requiring construction workers to be paid Union scale.
2. Abolish all mandates requiring business or Government collection of Union dues.
3. Abolish all Czars.
4. Abolish the EPA.
5. Repeal Dodd-Frank.
6. Repeal Obamacare.
7. Defund all subsidies for Ethanol.
8. Release all freezes on drilling for oil. Just let the Greens move to Brazil or somewhere.
9. Mandate 12 year maximum terms in office for members of Congress. No grandfathering; anybody already in office for 12 years does not run again.
10. Abolish all regulations requiring Government approval to plant any crop whatever.
11. Abolish all agricultural price supports.
12. Immediately means-test Social Security; move the eligibility age up one year for each two years; discard the early 62 retirement completely; stop providing any Social Security to non-Citizens.
13. Move the medicare age up one year for each two years.
14. Abolish the Department of Education.
15. Abolish the minimum wage.
That will do for a start.

First, thanks for posting me, Curt!

@Greg, I think you missed my point. There will always be a need for spears and shields no matter how the world changes, and someone will always need to carry them and just as importantly, pay for them. My point is that whether the people carrying them to are American, British, or South Korean it’s time for the rest of the world to start paying for this generous benefit that the US has been providing the world.

@Mathman, good points – definitely worthy of their own post!

@Brother Bob, #7:

My point is that whether the people carrying them to are American, British, or South Korean it’s time for the rest of the world to start paying for this generous benefit that the US has been providing the world.

On that point, Brother Bob, we’re in complete agreement.

@Greg:

Given the fact you’ve proven yourself a liar and a cheat here, supply your “sources” and don’t try to even remotely try to explain what an Unfunded Liablity is on an Accounting sheet as you have no idea what Unfunded Liablity means in the case of the United State’s situation. As it stands now the United States has roughly 140 Trillion dollars in Unfunded Liablities, aka it will have to owe up this much money to receipiants of the program but has not current cash resources or physical assets to liquidate to even remotely pay off this debt. This means when the time comes, and it’s coming rather fast, to pay off these Unfunded liablities in Medicare, Social Security, and the like that a lot of people the Democrats were so blantly ripping off are not going to get nothing more than a Maddof sized screwing over on their, “investment” returns in the programs versus in what they paid in via taxes.

In total, yes, the Defense budget that was spent for over 12 years will add up to about 4 trillion dollars, wait… what’s this, Bill Clinton’s NATO Peacekeeping force actions are also counted into this little biddy? Oh and wait, that figure of counting is 20 years old? Hmm, yes. Thank you for playing, but you failed to win the prize in math. People complained about how much we send out in Military spending, ok. Then why are we turning a blind eye to the 500 billion cut out of Medicare for the new Healthcare law, and why are we seeing Congress trying to aprove a Debt Ceiling limit increase that alone will add about 4 trillion in Interest payments in Debt to the current 14 Trillion active debt to allow the Democrat plan to spend a borrowed 2 trillion on Chinese/Japanese credit for a second wave of Stimlus and for the Healthcare law? And if we do raise the Debt Ceiling, the United State’s credit rating is expected to decline, translating to higher interest rates the Federal Government (not private economy) will have to pay to the various groups it loaned from. That is not sane economical policy for a family on a credit limit of 10,000 whose reached that limit and barely able to pay current interest rates to seek approval to jack up the credit limit to 15,000 with declining household income. This is exactly the type of metaphor that the Federal Government has gotten itself into.