Americans, Get Ready for an Enormous Tax Bill
October 18th, 2008Mmm hmm.
Via: Yahoo Finance:
“America’s economy is facing unprecedented challenges. We’re responding with unprecedented measures,” President Bush declared in a press conference Friday.
Bush, of course, was speaking of the government’s coordinated efforts to tackle a financial crisis that has roiled global markets and brought down venerable financial institutions.
“These measures will require us to put a significant amount of taxpayer dollars on the line,” the President added.
Ah, yes. There is no free lunch. Just how significant an amount of taxpayer dollars remains unknown, but it’s going to be massive.
Estimates of the proposal to let the government buy bad assets from banks range from $500 billion to $1 trillion — and that’s in addition to costs already incurred for various government actions this year, including, but not limited to:
* $29 billion to fund JPMorgan’s takeover of Bear Stearns
* Up to $200 billion each for nationalization of Fannie Mae/Freddie Mac
* Up to $85 billion for AIG
* $50 billion to insure money market funds
* Approximately $300 billion of Fed liquidity measures this week alone.
“It’s impossible to put any reasonable estimate on what it’s going to cost us as taxpayers,” says Tom Brown of Bankstocks.com and Second Curve Capital. “We know it’s going to cost an awful lot [and] the more they borrow the more interest rates go up and the more taxes we’ll have to pay.”
I have to suspect taxes are going to become a very contentious issue over the next two to three years — i.e. a growing movement to simply not pay them anymore. I wouldn’t be surprised if talk of this starts going round before next Spring.
I’m already running into people who are taking taxable decisions this year that they would never have made if they didn’t believe the same decisions will become FAR more costly when the next President has been chosen.
Taxes for this year will be a tough burden on a lot of people, especially the self-employed. The following year, many may simply be unable to pay. Should the ranks of those who can’t pay become large enough, will that be incentive for the disaffected to simply join the the crowd by willfully withholding payments, in hopes that by sheer numbers there can be no recriminations?
Will all today’s bandwagon-Democrats finally feel disillusionment for the two-party system when their hero Obama begins tightening the screws down on the tired, the poor, the huddled masses yearning to be free?
Am I misreading the situation here?
It seems like they are throwing around the word “taxpayer” an awful lot here. The problem I see with that is that many equate the word “taxpayer” with those in the workforce, but as far as I can tell, these dealings are going to hit everyone. I haven’t heard about a new tax or an increase in existing taxes, except that which Ron Paul calls an “inflation tax” i.e. printing more money and thereby devaluing the existing currency. While this will certainly hit the taxpayer/worker, I think the wording may make those outside the workforce think that they will be okay, while this is not the case. The worker will at least have a chance to earn more to make up for the decreased value of their paycheck. What about the retirees? The boomers, who have been retiring at like 1 every ten seconds since last year, which even in a good economic environment were going to be in trouble. From what I understand, their cost of living adjustments lag far behind real inflation figures. Couple this with the fact that retirement savings they made themselves have been wiped out in the last few weeks and you have a double whammy that makes things look very grim for America’s seniors. It may be that only the lucky ones are able to afford to subsist on dog food.
Today’s Gospel reading in the Catholic church was the story about the Pharisees who tried to trap Jesus by asking whether he believed that the subjugated people of Israel should pay taxes to Rome. Jesus, of course, gave them the now famous answer to render unto Caesar what is Caesar’s. In the homily that followed the reading, I was astounded (and pleased) to hear Father Bob give a straightforward case for war tax resistance, including both the how’s and why’s. He received applause from a good portion of the congregation when he stepped down from the lectern, something that I don’t think has ever happened in my memory. The anger over the bailout and the wars runs deep.
@rotortillerman:
Thanks for that. It’s good to know not everybody in this country is sleepwalking through life.