The Federal Debt: Think of It as Opportunity Cost

I went to lunch today with a co-worker.  On the way to the restaurant, he asked if we could have a non-political discussion about the federal budget deficit.  I agreed so he asked, “Why do people think the budget deficit is important?”  The US economy is strong and growing.”

I considered that for a moment and responded that it is not the deficit itself that’s important, it’s the interest on the Federal Debt that is important.  The Federal Debt is the accumulation of all of the deficits from all prior Federal Budgets.  These interest payments must be considered because they represent a portion of the non-discretionary budget for which Congress has no choice but to authorize payment.  But it is also the portion that the Congress has the least ability to control.  Finally, the full faith and credit of the US Government is the foundation upon which the world financial system is based.  If the US Government were to default on its debt, the entire world financial system would be thrown into chaos.

The budget for Fiscal Year 2018 (FY 2018) calls for $315 billion to be spent servicing the US Federal Debt of $19 trillion.  That seems to imply an average interest rate of 1.65% which makes sense given our recent economic climate during the Great Recession. And that $19 trillion will become $19.44 trillion at the end of this fiscal year because the FY 2018 budget deficit of $440 billion will be added to the prior debt balance.

No problem, right?  Well, not exactly.

There is a concept in Economics called opportunity cost.  Opportunity cost is the cost of not being able to choose the benefit of investing in something you want to do because you must pay the cost to do something else.  Generally this other course of action is dictated to you by your circumstance or previous choices.

Our opportunity cost as a nation is that we can’t do many things we would like to do because we must service the Federal Debt.  Without even accounting for rising interest rates, the next budget will require almost $321 billion to service the existing debt.  The budget after that will require even more.  Think of the roads and bridges that could be rebuilt and the people we could help with $320 billion available each year without having to raise taxes.  We could do that if we didn’t have to service the Federal Debt.

As of the close of the financial markets today, the yield on the 5 year Treasury Note is 2.57%, the 10 year Treasury Note yield is 2.85% and the 20 year Treasury Note yields 3.03%.  That means that the average interest rate on the Federal Debt for next fiscal year could be in the neighborhood of 1.8% to 2% depending on how much of the outstanding notes have to be refinanced at the higher rates.  That means the interest payment for the Federal Debt could rise to $388 billion.  If the government doesn’t raise taxes or reduce expenditures, this extra $73 billion will just be added to the Federal Debt.  This will lead to even higher borrowing costs in future years.

Unless…we figure out how to reduce the debt.   A focus on just reducing the annual deficit is a distraction because any deficit amount is merely added into the debt.  We must eliminate the deficit, run a surplus, and pay down the debt.

That will not be easy because we really only have four options and none of them are very appealing.

1. We can print $19 trillion of currency and exchange it for the Treasury Notes held by our creditors as they mature.  The US Government is one of the few sovereign bodies that could actually do this and make it stick.  This would add $19 trillion to the money supply, spark massive inflation in the USD-denominated economies sending prices sky high, forcing employers to raise wages, and wrecking our economy.  You’d make more money than you ever made in your life and not be able to afford to buy anything.  By the way, this is what the Quantitative Easing program run by the Federal Reserve during the past five years was doing.  The bonds are held by the Fed instead of by other creditors.  The Fed is reducing their holdings right now.  They increased the money supply and now this additional debt will have to be refinanced at the higher interest rates.
2. We can cut discretionary spending to offset the new interest cost.  This will affect things like the military, healthcare, other human services, law enforcement, and the arts.  Please understand that buried in those budgets are dollars supporting research for things that might become consumer products that the people in the private sector can make and buy after the government (e.g. military) has worked out the bugs.  We got Corning Ware from the heat shields on the Mercury, Gemini, and Apollo space capsules of the 1960’s and 1970’s.  The History Channel has a show called Tactical to Practical that explores many of these outcomes.  These research projects also employ many highly skilled, highly paid people who on becoming unemployed would flood the job market and depress wages for highly skilled workers.  Cancellation of Federal programs would also require we furlough many government employees and fire contractors which would also impact wages in the entire economy.  And don’t forget the impacts on our national security if we have to cut the budgets of the Justice and Homeland Security departments.
3. We can cut the Federal Entitlement programs and use that money to offset the new interest costs.  This will reduce the incomes of people who are unlikely to be able to replace it due to age or infirmity.  It will also have similar effects on federal employment as mentioned above.
4. We can raise taxes.  Not really, we just lowered taxes and the economy got really excited.  It got so excited, interest rates started to creep up because people want to borrow money to invest in their businesses.  Those people compete with the US Treasury for this money and that raises interest rates.  But raising taxes now could extinguish this economic euphoria and throw the economy into the tank again.  It might keep interest rates down but who wants to relive the economy of the past ten years?

 

A fifth option could be to grow the economy and pay down the debt with the extra tax revenue a larger economy would generate.  This is what the politicians say should happen.  That would be a great plan if our government was really willing to do that.  Unfortunately, our government has never seen a surplus of money they couldn’t spend today rather than pay down the debt so they had a reliable stream of money to spend later.  For an elected politician, the only opportunity they might have is now and they spend like there is no tomorrow.

Fixing this problem is going to take a kind of leadership in Washington, DC that we have never seen.  It will have to be a bi-partisan effort.  It will be really hard.  It will take serious people to do a serious job and there are not many of them elected to office in this country.  It will probably take a crisis even worse than our recent Great Recession to create the sense of urgency required.

Or we can keep kicking the can down the road and let our children deal with this.  After all, that’s what our parents did to us.

Perception IS Reality

I am usually amused by the the “studies” conducted by elements of our government and by private foundations.  They seek to explain very complex phenomena but they only seem to be able to manage these explanations in very complex terms.  Take for example this article on MSN Money today.  I don’t know how much money the Dallas Federal Reserve Bank spent producing this study but it’s a very poor investment to make during an election year.  The nuances exposed in this piece are too ethereal for the average voter and the average voter has far more input to the current election cycle than does the Dallas Fed.

The “facts” presented in the article referenced may very well be factual. Some of them are even corroborated by the Kaiser Family Foundation.  So what if healthcare costs have lagged general inflation on a “technical” basis?  Unfortunately, these facts don’t mesh with the realities faced by most of the public.  Those realities currently in the public conscientiousness are:

• ObamaCare has spent twice the amount of money envisioned to insure about half the people it set out to cover.  In the process it completely changed the cost structure of health insurance in America.  The cost of private and group health insurance is up considerably and many people who used to be able to afford it cannot any longer.  Others must alter their spending priorities in order to secure coverage.  Most people who gained access can only afford it by qualifying for government subsidies.  Many of those can’t afford the deductibles and co-payments required by their new coverage.  This did not make it better or cheaper for the average person.  Perception is reality.
• Pharmaceutical costs are out of control.  The Epipen fiasco is just the latest episode of Big Pharma gouging the US public.  It turns out that the technology cited as the barrier to entry for competitors was developed by the US military and paid for by the US taxpayer.  How did Mylan Pharmaceuticals obtain a patent for that?  Why won’t the Food and Drug Administration approve more manufacturers?  Did a certain Democrat senator from West Virginia have anything to do with that?  Perception is reality.

I understand that the Federal Reserve need to understand the intricacies of the US economy.  I realize that the people to whom their reports are aimed understand the nuances contained therein.  I understand that news outlets like Business Insider and aggregaters like MSN want to provide interesting and provocative content.

I warn any candidate seeking to justify his/her support of the current healthcare situation in this country by referring to these studies to tread carefully.  The Dallas Fed and the Kaiser Foundation will not be electing our next set of leaders.  The American voters will be doing that.  And their perception of the rise in healthcare costs does not mesh with the reports cited.  And perception IS reality.

Who’s the Winner in the Minimum Wage Debate?

Every debate has its winners and losers.  The minimum wage debate is no different. However, unless you really think about it, you will not chose the correct side because it is not obvious.

According to this article published in The Guardian and republished by MSN, the state of Oregon has now passed a state law mandating an increase in their minimum wage rate. According to the article, fourteen states have now mandated increases to their minimum wage.  The trend seems to be around $15.00 per hour by 2018.  They are all blue states.

Oregon has structured a tiered system with workers in Portland reaping the bounty of $14.75 for each hour that they labor.  This is up from the $9.25 per hour mandate that already made Oregon a beacon of light in the darkness of the minimum wage fight.  This means that the annual income for a 40 hour per week minimum wage worker in Oregon will increase from $19,240 to $30,680.  That means these Oregonians have an extra $11,440 to push back into the Beaver state economy.  Right?

Wrong!

In addition to the unintended consequences of this unilateral move by a state or local government that I chronicled here when Seattle did a similar thing back in the summer of 2014 (BTW, McVending machines are starting to show up as predicted), there is another reality for these recipients of legislative pandering.  These poor folks (yes, they’re still poor) are about to run into the federal tax tables. You see, Congress has to tax people in all fifty states using the same tables; they can’t have a set of rates for the fourteen enlightened states and another set for the thirty-six Luddites.  Therefore, Oregonians and their brothers and sisters in the other blue states are going to start looking like affluent middle-class taxpayers to the IRS when compared to the minimum wage earners in the lower thirty-six.

For the uninitiated, middle-class wage earners actually pay federal income taxes.  There will be no earned income credits to redistribute wealth to them. The federal inflation indexing won’t advance the tax bracket floors fast enough to absorb the jolt imposed on the system by Oregon.  The Congress will not be able to make adjustments to cushion the taxation blow.

These newly-minted middle-classers will join the 52% of Americans who actually pay for the privilege of being US.  That’s a good thing for the country because it will increase tax revenues at the federal level.  That is, if my other predictions made in 2014 don’t come true and the economies of these enlightened states stay healthy allowing these folks to remain employed.  We’ll see…

What does that mean?

It means that people who live in Portland, Oregon who make the new minimum wage will begin to pay taxes they never paid before.  This comes out of their take-home pay increase.  Just as the tax tables can’t change to accommodate Oregonians, neither can the ACA eligibility thresholds and premium assistance rates. The federal public assistance thresholds will remain intact making Oregonians less eligible than they were before. Things Oregonians could afford before, they may not be able to afford in the future given their upgrade in economic status.  So, for now we’ll say the federal government is the winner because revenue increases without them doing any work and public assistance expenses can be pushed down to the truly needy and unemployable. At least in those fourteen blue states.

So what to do?

Since the federal government can’t help, it will be up to the state government to provide the assistance required to keep these folks whole.  Oregon already has the highest state tax rates in the country.  Every new middle-classer will be immediately thrown into the 9% marginal rate bracket on all income over $8400.  They will get to deduct their new federal income taxes paid from their state incomes but it’s going to take more than that.  I predict that Oregon will have to increase their ceiling on their 5% and 7% brackets and probably increase their top bracket rate to make up the difference.  The people in that top bracket are the same people who will have been mandated to increase the wages of their minimum wage employees and then the wages for all their other employees who were at that rate and don’t view themselves as having minimum-wage skills.

I’ll bet they will be ecstatic!

The Bluff is Over

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government’s budget deficit and rising debt burden.

This is not a statement about the rancor of the process that just transpired to raise the debt ceiling. This is a statement about the system the US Government is using to fund itself. Forty cents of every dollar spent by the US Government is borrowed. S&P seems to believe that this is now unsustainable even for the US Government and that the President and Congress had better come up with a different formula for paying for things.

It is totally cynical and dishonest for our leaders to hide the true cost of government services from the taxpayers by borrowing money to balance the books. Most people see the amount of the “national debt” as a nebulous number without real meaning. S&P’s action demonstrates that it does have real meaning and the meaning is bad.

We need a balanced budget amendment requiring budgeted government business to be supported by current revenues. It should further require that all government activities be reflected in the budget.  There would need to be circuit breakers to allow the government to borrow in the short term to pay for unexpected extraordinary items until tax levies or other current spending could be adjusted. However, all borrowing would have to be short-term and require a super majority of Congress to approve the initial issue and any subsequent roll-over.

Furthermore, there should be a single flat rate for the taxation of all individual incomes and all wage earners should have to pay some amount of income tax. It is very easy for voters to elect people who will promise to raise someone else’s taxes. It takes all of the pain out of the decision. The only way to truly vote intelligently is to have to suffer the consequences of your vote. The candidate who campaigns to give you more will have to admit to having to take more from you in order to do it.

The bluff that we can continue to run budget deficits and heap up our national debt has been called. The people want to know whether our leaders are going to show or fold.

The Phantom Trust Fund

Well, it finally happened. This week President Obama threatened that August Social Security checks might not go out unless he can get the Republicans in Congress to raise the debt ceiling. Huh? What about the Trust Fund and all that cash that’s keeping the Social Security program solvent for the next 8-12 years?

Here’s what’s happened…

Congress has taken the 15.3% payroll tax that every worker paid into the trust up until this year (the tax is only 10.2% for 2011) and used it to purchase government-issued bonds. They then took the cash and added it to the general fund and spent it. These bonds are supposed to have priority over all other government obligations.

Well, apparently these bonds are no better than any other government obligation because holding up the Social Security payments is the only thing that has been mentioned as a way to conserve cash should the government lose its ability to borrow. That means that every other claimant who gets paid from the general fund could have as good or better chance of getting his money than do the Social Security recipients. People holding public US Government bonds having a lower priority than the Social Security Trust Fund bonds will get paid. Presidential and Congressional staffs get paid. Federal Employees get paid. Federal contractors get paid. Federal transfer payment recipients get paid. People whose payments are supported by the highest priority obligation issued by the US Government? They apparently won’t get paid.

So what is it Mr. President? Is this your idea of leadership? Is this your latest scare tactic to put heat on the Republicans? Or is this a warning to everyone that the solvency of the Social Security program is like everything else and lives and dies with the current cash flow of the bankrupt US Government?

On Budget Gridlock

The state of Minnesota shut down its state government today. They don’t have a budget under which their state can operate because they can’t figure out how to close a $5 Billion gap between revenue and planned expenditures. The finger pointing and demagoguery have already begun. The Republicans ran on a platform of no tax increases. The Democratic governor ran on a platform of taxing the wealthy to pay for programs benefiting the non-wealthy.

President Obama and Congress are about to let our country default on its public debt. Republicans in Congress, some elected and some cowed by the Tea Party, have finally dug in to rein in the spending of a government that borrows 40 cents of every dollar it spends. The President and Democrats in Congress want to raise taxes on the wealthy to pay for their programs benefiting the non-wealthy and raise the statutory borrowing limit to boot.

How can we have such gridlock?

I suspect it comes from this. Republicans are elected by people who make enough money to actually have to pay taxes. Tax credits for the non-wealthy effectively cancel any tax bill they would owe under the current income tax laws. Since these non-wealthy people pay no taxes (and they equate to about 50% of the American population), they are more than happy to elect people who want to create programs that benefit them that they don’t have to pay a dime to get. So, they elect Democrats. I know there are people who pay taxes and yet vote for Democrats. They must have more money than they know what to do with. Please don’t tell me they’re civic-minded because there are better ways to perform public good than using a government’s taxing authority to take the money from other people for programs that make them feel good about themselves.

We need a new system in which everyone is made to understand the cost of government. A flat tax is a good method for doing this. How much did you make? Send the government x% of it. No deductions, no credits, just simplicity and the experience of being charged to have the government you want. Social Security and Medicare kind of work like that. That way, if the non-wealthy think their taxes are too high, they can elect people who will work to make government less expensive. If they like those programs that drive up the cost of government, they can make themselves more valuable so they can earn more money to pay for that extra government.

That sounds fair. Taking extra money from people who have it to pay for programs that won’t benefit them doesn’t sound fair. Taking money from people who pay taxes just to give it to people who voted for you because you promised to do things for them for which they didn’t have to pay. That’s immoral.

Tax Breaks for the Rich

Apparently President Obama and the Republican Minority in Congress came to an understanding today about the need to extend the “Bush Era Tax Cuts” for every earner for two more years.  This means that the President broke his campaign promise to stop the breaks for the wealthy.  The Democratic Majority in Congress says the deal isn’t done yet.  The President says that he’ll sell everybody on the package.  It will all be done in time for Christmas.  Great…

So, what did we all get?

The American Taxpayer got the shaft because the Federal Debt will rise by $400 Billion over the course of the extension because of the lost tax revenue and other items discussed below.

Small Business owners got the shaft because tax policy was not changed to solve one of their biggest problems in that the tax code does not differentiate between income and retained earnings (accumulating capital) for the pass-through entities that most of them use for paying taxes.  Maybe they’ll feel better that at least those retained earnings/income will be taxed at the lower rate for the next two years.

I’m not sure what the Republicans really did get.  Maybe a large constituency of theirs is high earners that make political contributions but I get the sense that many of the people who actually vote for them live far below the $250,000 wage level.   I guess they value cash over actual votes or they think they can have it both ways.  In fact, I think a large number of voters for Democrats work on Wall Street and in Hollywood. I’m pretty sure they live above the $250,000 wage level.  I guess what Republicans got was the humiliation of the Democratic Majority thanks to the President.

The wealthy got to keep their lower tax rate on their incomes over $250,000 and it doesn’t really matter who they voted for in the last election. 

The President got the one year extension of unemployment benefits for the long-term unemployed without having to pay for it with other cuts to the Federal Budget.  This is included in the screwing the Taxpayers took as is the one year 2% cut in the employee Social Security Tax.  That money will be replaced by other federal revenue which means we all get to borrow a 2% take-home pay raise.  Whoopee.

The liberal wing of the Democratic Party just got the biggest shaft.  Their President told them to bend over and take it while he relegated their majority to irrelevance.  Their President broke the signature promise of his campaign which was either “stick it to the rich” or “no more back room deals”.   Either way, he lied to them.

The long-term unemployed got to keep receiving a token paycheck for the next year.  Unfortunately, the lack of stimuli to create jobs for them by helping small businesses accumulate capital or borrow at low interest rates for expansion will continue to stymie their abilities to find employment.  They will probably still be unemployed this time next year as the Great Recession moves into the Greater Depression.

Actually, we all got the same thing for Christmas.  We got nothing while the people we sent to Washington spent billions we didn’t have so they could celebrate with Champaign we can’t afford.

The Price of Civilization?

David Horsey is a political cartoonist working for the Seattle Post-Intelligencer website.  Since he lives and works on the left coast, you’d be correct to assume that his politics lean to the left also.  This doesn’t make him bad or even wrong.  This just means that his vision of America and mine are completely different and that we will disagree on most things.  I’m pretty sure he would think that I am either bad or wrong because that’s how most Liberals deal with right-leaning arguments.  That’s too bad because it creates hostility in any discourse we might have.  Horsey also writes a blog and he had some interesting observations about the Libertarians and the anti-tax movement.  In it he illustrates my point that he thinks any other point-of-view is just wrong and that the people holding it are bad.  I want to look at two passages from his essay.

In the first passage he says:

I make a pretty good income and have no loopholes or tax shelters to exploit like the wealthy, so I pay more taxes than most people. I don’t love it, but I don’t resent it, either, because I agree with. Oliver Wendell Holmes who said, “Taxes are the price we pay for civilization.” The anti-tax zealots don’t seem especially concerned about civilization. Whether holed up with their assault rifles in a wilderness cabin, riding high in a private jet on their way to a Palm Springs golf course, or busy running another anti-tax ballot campaign, they feel scant obligation to their fellow citizens.

Really David?  Is your disdain for people who work hard, earn a lot of money, and don’t want the Government to confiscate it from them in order to give it to other people who don’t work so hard so high that you think they feel scant obligation to their fellow citizens?  Libertarians are strict constructionists when it comes to the Constitution.  They want the Government to fulfill its obligations as spelled out there and stay away from everything else.  The U.S. Constitution directs the Government to provide for the common defense, collect tariffs, and to maintain some uniformity of laws throughout the country.  That is the Libertaian’s view of promoting the common welfare.  Other than the weather, life shouldn’t be much different in Fort Kent, Maine as it is in San Diego, California.  It means everyone should have the same chance, not the same outcome.

Libertarians do not like the way Liberals justify their massive intrusion into the lives of the citizenry through the words in the Constitution, “insure domestic Tranquility, provide for the common defence, promote the general Welfare”.  Apparently, these words are justification for using 50% of the 2008 federal budget to transfer wealth from people who have it to people who don’t.  Libertarians think charitable work ought to be done by charitable organizations and they don’t see where the Constitution sets the U.S. Government up as such.  While the Preamble to the Constitution suggests the spirit of our nation, the remainder of the document does not support charitable works or the transfer of wealth as governmental functions.  When Libertarians want a tax revolt, it is a revolt on this half of the budget.

Horsey goes on to say:

One way or another, if the problems of a city, a state or a nation are neglected, those problems will spread and eventually end up on everyone’s doorstep. Forget empathy, generosity, humanitarianism or Christian charity. Be selfish, but still grasp this hard truth: Taxes are anarchy insurance, the fee we pay to guarantee we don’t lose it all.

Horsey now sounds like Neville Chamberlain.  In 1938, Chamberlain thought Europe should allow Adolph Hitler to absorb the Sudetenland as a bribe to keep the peace before World War II.  We all know how that turned out.  Apparently Liberals believe that the purpose of the U.S. Government is to buy off those who don’t have on behalf of those who did have until the Government took it from them so that they don’t riot.  That hasn’t worked since the 1960s and in their feeble attempt to make it work; Liberals have grown the bribe fund, calling the payments “entitlements”, to 50% of the Federal budget.  The insurance premium is way too high for the amount of peace we are receiving.  Maybe we should take our chances and do without that insurance.  Maybe we should then let the American public fund charitable organizations to bridge the gap for the truly needy. Maybe the remainder of the populace on the public dole just needs an attitude adjustment.

By eliminating the transfer payments in the Federal budget and eliminating the unfunded mandates foisted upon the States in order to prevent Federal taxes from being even higher, there would be money at current tax rates to eliminate budget deficits, pay the national debt, and fund State and local budgets.  That’s all the Libertarians are saying.  That’s all the Constitution demands.

Wealth and Tax Policy

I’d like to be rich; wouldn’t you?  I’d like to not have to worry about being able to pay my bills or being able to retire comfortably.  Yes, I’d like to be rich.  How can I make that happen?  As I see it there are three roads that could lead to becoming rich.  I could win the Lottery.  I could inherit the money from someone else.  I could chase the American Dream and build something of value.

“Winning the Lottery” is so American these days.  In today’s short-attention-span, instant-gratification society, the BIG Lottery win is the road of choice.  I have a friend who invests six dollars per week to the Mega-Power-Million-Balls game.  He’s not so naïve as to think it’s an investment in his future.  He just understands that it’s the only game of chance where he can keep his emotions under control and thus manage to keep his losses within his budget.  It’s his one vice and it’s entertaining.  Besides, someday he might just “win the Lottery”.

Inheriting a lot of money is kind of like “winning the Lottery” but the gamble is won early by being born to the right benefactors and then waiting it out until they don’t need their money any more.  If that’s who you are, you can probably stop reading, you’re already set.  That is unless you were expecting a big gift from Bill Gates or Warren Buffett.  Warren Buffett’s view in passing inheritances along is “give them enough that they can do something but not enough that they can do nothing”.  Furthermore, Buffett and Gates are embarking on a campaign to severely restrict these rights of passage by working now to make sure that their fortunes and those of other super-rich are bequeathed to causes rather than just people.  It might not pay to win the race of the gene-pool in the future.

There is always the American Dream.  It’s the promise that anyone can grow up to be President or Bill Gates for that matter.  All you have to do is decide what you want to do, work hard, and grow your dream.  Everyone agrees that this is the economic engine that makes America great because this is where the majority of our jobs are created.  People who are building dreams get to the point where their dream is getting big and they need help keeping it going and growing and they hire other people to help.  People invest in their dreams when they see their dreams about to come true.  Unfortunately, the President wants to take their means of doing so.

Now we must consider tax policy.  The Bush-era tax cuts are about to expire and the only impediment to renewing them is disagreement over how to treat people who make over $250,000 a year.  This group starts with liberal academics, trial lawyers, and those people who have a dream starting to build into something great.  It then goes on up to those who have already made it.  Then it goes up to Bill Gates and Warren Buffett.  The only group that really should invoke any sympathy is the dreamers and I don’t mean the academics.  We need to figure out how to keep the government from stifling the economic engine that grows small business.  The others can pay since they are not as active in the building process.

Businesses pay taxes using one of two structures.  Most large businesses are corporations that are organized as free-standing entities.  They pay their own taxes on their profits and pay their investors the excess after-tax profits through dividends. These dividends are taxed also.  This double taxation of profits is not a serious concern for very large corporations but it is disadvantageous to small businesses so they generally choose the other structure, called a pass-through, which only taxes profits once. The problem is, those profits are added to the owners’ incomes and taxed whether they are taken out of the business or not.  This robs the business of the capital it could use to expand.  This is why including the dreamers in the high tax bracket of the current tax law is a bad idea.

I think it’s right for people to pay their own way and to pay the taxes they owe.  But I think we ought to figure out how to help those people who by providing jobs are helping other people pay their way.  Perhaps the argument shouldn’t be whether we should be taxing the rich or not; but rather, whether we should be taxing business or not.  Perhaps we should be discussing the tax on dividends rather than the tax on profits wrongly defined as pass-through income.  It should be OK to tax income but not OK to tax capital.

Per the status quo in Washington, the discussion/argument will be about rich versus poor.  Perhaps we should change it to be about the ability to produce wealth and do everything we can to re-enable the American Dream and let the dreamers pull us out of this economic malaise we’re in.  No one ever got a job from a poor man.