12/12/2012 1:52:00 PM Funding the great American social agenda
Apparently, my math was wrong
Bill Forhan Publisher
Two of my critics did the math. One even provided a complete spreadsheet of his own - great! After their criticism, I'll admit I made a mistake in my analysis. I guess it has been too long since this CPA actually did taxes. But I am willing to admit my mistake in the interest of advancing the debate. I have fixed my chart and it is here for all who are interested in reexamining it.
I want to thank my critics for challenging the numbers so at least we can agree on the facts. So first let's examine where I went wrong.
The first mistake I made is I used the 2010 tax rate table. Each year the income levels are adjusted for inflation so my income levels were too low. I have gone back and replaced the initial tables with the 2011 rates and income levels from the IRS web site. I used 2011 rates because no one has actually paid any income tax under the 2012 rates. The second mistake I made was in the way I calculated the marginal taxes on the base year. I have now fixed those calculations. And except for the fact that I disagree with my critic that we should begin with the 2012 rates - which is what the big fight is about - my calculations do agree with the critic's spread sheet.
Here's the new bottom line - the Republican proposal currently proposes no change in tax for anyone. While the Obama plan adds two new tax brackets on the upper income earners and raises the tax on people in those brackets by 4 percent to 10 percent. At this writing it appears the Republicans are going to cave and give Obama what he wants.
The big question in admitting my math error, is did I change my mind about what needs to be done? If you can bear with me for a moment, I will answer that question unequivocally.
The message of the last election is Americans have chosen to go down the road of a bigger government and more social programs. Currently the Obama government is running a deficit in excess of 1 trillion dollars per year. And when Obamacare was passed, if you remember, full implementation was postponed until 2014 in order to prevent the program from increasing the deficit even more. Now the election and the Supreme Court have virtually eliminated any possibility of repeal. Social Security, Medicare and government guaranteed pensions remain woefully under funded. And during the campaign Obama said, the automatic budget cuts he previously agreed to, "won't happen." It is absolutely clear that government spending will continue to escalate.
This tax debate began because I suggested if American's truly want a European style socialist system then they need to be prepared to pay European style tax rates. And just last week Howard Dean, former Chairman of the Democratic National Committee, said in an interview; ""This is, initially, gonna seem like heresy from a progressive," Dean said. "The truth is, everybody needs to pay more taxes, not just the rich. That's a good start, but we're not gonna get out of this deficit problem unless we raise taxes across the board." He must have been reading my editorials.
It is time for all progressives to be honest with the American public. In my column on Nov. 21, I said we needed to raise rates 50 percent across the board. That was met with a charge of me being too radical and impractical. Here's some more inconvenient facts from the Treasury Department. Last year government revenue was $2.4 trillion. Spending was $3.5 trillion, leaving a deficit of $1.1 trillion. We need to raise revenue by 50 percent to cover the current deficit spending.
No, the correction of last week's errant math convinces me more than ever that my Nov. 21 assessment was right on target and the current debate over the fiscal cliff is just more insincere posturing by the Washington politicians - the math proves that.
Bill Forhan can be reached at 509-548-5286 or email@example.com.