November Decision - Part 6

Reason #6: Taxes, present & future:

You and your spouse sit down and discuss the family finances. On the upside: you've finally paid off all your credit card debt. Downside: there have been a couple of burglaries in the neighborhood; you've decided you need to install a $500 alarm system and pay $10/month for monitoring. That money has to come from somewhere.

You propose to cancel this fall's family trip to the in-laws', and just send your spouse. That'll save the $500. You then propose to cancel the Better Homes and Gardens and Women's World subscriptions; that'll cover the monitoring costs.

Your spouse has a counter-proposal. You'll save the $500 by not going fishing with your buddies this year, and the monthly $10 will come from cancelling Fox Sports on cable.

We have an impasse. You're not willing to give up your fishing trip & sports channels; your spouse isn't willing to give up taking the kids to her parents' & her magazines. But security requires you put in the alarm system...

While you're trying to solve this impasse, you bring up another issue. Your spouse has always wanted to stay home with the kids, and really you've wanted her to as well. So you easily agree she should quit her job and stay home.

Now, you have to look at cancelling the trip to the in-laws' altogether... and cancelling HBO and Showtime too... Neither of which is acceptable to either of you.

So you decide to put the alarm system - and whatever else you can't pay for once your spouse quits her job - on your credit cards. Just take it out of the kids' inheritance...

That's pretty much what we're seeing in current U.S. fiscal policy.

We need to spend more money to fight terrorism.

At the same time, W feels we need a tax cut.

Which would be fine if we could cancel enough government programs to bring things back into balance.

But we can't. Decades of battles have taught anyone with half a brain that liberals will never accept the destructive cuts in social programs that would be necessary. And that conservatives would never accept the cuts in pork-barrel defense and road projects and business subsidies that would be necessary.

The prudent thing for our couple to do would be to hold off on the spouse quitting her job until the family budget can be returned to a place where that income can be spared.

And the prudent thing for the government to do would be to hold off on tax cuts until revenue returns to a point where necessary expenditures can be balanced.

Our couple will be taking it out of their kids' future - and so is our administration.

The GOP argues that tax cuts for the mega-wealthy "trickle down" to the average wageearner. Those who were around in 1980 know how true that allegation is. (NOT!) 25 years ago, the tax relief went into huge leveraged investments - which if they were lucky created huge returns for the investors but nobody else. More often, it was necessary to slash wages and employment to retain enough cash to pay the interest.

Tax cuts do little or nothing for the average wageearner; they can even be counter-productive. They also sure don't do much for the worker who loses his job!

More to follow.

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