Scrambled thoughts about taxes

Just an interesting thought about how our government spends its money, when looking at how our different presidents have used money and budgeted, we find some interesting facts.

I decided to take a look at the Government Printing Office’s (GPO) website, I’d like to first show you a small portion of the 2008 budget written by President Bush:

“The President’s 2008 Budget also outlines a comprehensive series of budget reforms that will
improve transparency and accountability in Government spending, including earmark reform.
Earmarks are provisions included in legislation that are often not subject to adequate legislative or
public scrutiny and that often lead to wasteful Federal spending. They have grown dramatically,
nearly tripling in the last decade. The President has called for full disclosure of all earmarks,
prohibiting earmarks from being slipped into so-called report language instead of actual legislation,
and cutting the number and amount of earmarks by half. The President has also called on the
Congress to enact a legislative line-item veto. This would help the Executive and Legislative
Branches work together to strike unwarranted earmarks and other wasteful and unnecessary
spending from the budget.”

I couldn’t agree more with the elimination of earmarks being slipped into certain bills and other legislation that keeps our political world going in circles, ie. beaurocracy!

Here is an excerpt from President Obama’s 2011 Budget:

“In addition to closing loopholes that allow wealthy investment managers to not pay income taxes
on their earnings and ending subsidies for big oil, gas, and coal companies, the Budget eliminates
the Bush tax cuts for those making more than $250,000 a year and devotes those resources instead
to reducing the deficit. Our Nation could not afford these tax cuts when they passed, and it cannot
afford them now.”

I think it is very interesting that we will end subsidies for oil companies, where do you think the oil companies will make up that lost revenue?  Thats right, YOU AND ME, the people who are paying at the pump will pay for those deceased subsidies!  Not only does the budget eliminate the bush tax cuts for people making over $250,000/yr , it also eliminates many other tax cuts for businesses.  If you were wondering who makes over 250,000/yr, I’ll tell you, the people who employ most of the people living in the United States.  Those employers are going to be passing on the savings to us in the form of pay cuts and job losses. If our government could learn to spend wisely and conservatively than we would not need all of these tax hikes that the current administration is trying to push through I’ll elaborate on some of these below after I talk about gas taxes.

After thinking about gas taxes, and how much we pay, I decided to look a little more in depth on how much money the government brings in per gallon of automotive unleaded gasoline. It all starts at the federal level, with a fixed tax of 18.4 cents per gallon.  Then add in a state tax of any where from 8 cents a gallon (average is 27.2 cents/gal.) all the way up to 40+ cents a gallon.  And for the most part that doesn’t include excise tax, which drives the price up even higher, then we can add in charges for inspection fees, sales tax, ect.  On average oil companies make about 8% on the dollar profit, with the companies with higher prices bringing in closer to 10%.  So you do the math, depending on oil prices your government makes more money per gallon than the oil companies themselves do!  We need to lower taxes on everything.

When I looked at part of Obama’s initial tax hikes, I thought it was interesting that he wants to create more jobs with minimal tax breaks on hiring new employees when he wants to tax them so much on everything else, that cannot create jobs when we charge businesses so much to operate.  Below is a list of new tax increases under Obama’s new tax plan.

1) On people making more than $250,000.

$338 billion – Bush tax cuts expire
$179 billion – eliminate itemized deduction
$118 billion – capital gains tax hike

Total: $636 billion/10 years

2) Businesses:

$17 billion – Reinstate Superfund taxes
$24 billion – tax carried-interest as income
$5 billion – codify “economic substance doctrine”
$61 billion – repeal LIFO
$210 billion – international enforcement, reform deferral, other tax reform
$4 billion – information reporting for rental payments
$5.3 billion – excise tax on Gulf of Mexico oil and gas
$3.4 billion – repeal expensing of tangible drilling costs
$62 million – repeal deduction for tertiary injectants
$49 million – repeal passive loss exception for working interests in oil and natural gas properties
$13 billion – repeal manufacturing tax deduction for oil and natural gas companies
$1 billion – increase to 7 years geological and geophysical amortization period for independent producers
$882 million – eliminate advanced earned income tax credit

Total: $353 billion/10 years

Think about it.

Numbers and quotes obtained from the Government Printing Office, and abcnews blogger -jpt