Fiscal Cliff's Dirty Secret: It's Not About Taxes At All, But Too Much Spending

According to the author, the current debate over tax hikes is an empty one with a false premise. President Obama's proposed tax increases on the top 2% of earners would fund the federal government for about eight days. If one actually does the math, "taxing the rich" ends up being no real solution at all.

By Sen. Rand Paul
Posted 12/18/2012 07:07 PM ET
Investors

There's a lot of talk right now about an impending fiscal cliff. But we already went over a cliff economically in this country a long time ago.

The current debate over tax hikes is an empty one built upon a false premise. The debate is whether raising tax rates will address our current crisis. The premise is that it is a lack of taxation that has led to the crisis. Both are hopelessly wrong.

President Obama's proposed tax increases on the top 2% of earners would fund the federal government for about eight days. Even if we taxed Americans earning over $1 million on 100% of their income, we would raise only about $600 billion in revenue.

Taxing citizens at this level is a tyranny even Europe hasn't reached, and still it would only address about one-third of our deficit.

If one actually does the math, "taxing the rich" turns out to be no real solution at all, only fantasyland rhetoric.

Every dollar the government takes is another dollar used unproductively. Every dollar removed from the private sector and wasted in the hands of bureaucrats is a dollar that will not be used to purchase goods, to pay for services or to meet a payroll.

Every dollar the government ever takes — today, tomorrow and forever — is an attack on jobs and the economy.

Instead of sitting around trying to think of new ways to vote away someone else's money, Washington leaders should finally begin to address the real crisis that has threatened us long before the current handwringing: spending.

With a $16 trillion national debt and well over $1 trillion annually in deficits, we barreled over the edge of fiscal insolvency long before this month.

Why do we lurch from deadline to deadline with no apparent action on our nation's problems until the next deadline approaches? I presented Social Security and Medicare reform to the Senate over a year ago. I directly spoke to the president and vice president about my plan. And their response? Absolutely nothing!

Is it any wonder people are fed up with their government? The president announces we have no time for spending reforms, but when the deadline passes I predict not one committee will step into the breach to begin the process of reform.

Why? Because Democratic leadership still insists that Social Security and Medicare are just fine. Meanwhile, Social Security actuaries tell us that Social Security this year will spend $165 billion more than it receives. Medicare will spend $3 for every $1 it collects. Yet, the president says he doesn't have time for entitlement reform.

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