Reality check on taxes and the U.S economy

Dispatch contributors like Marc Perkel and Lisa Pampuch seem to
be chasing idealistic, social progressive goals while ignoring
sound economic principles.
By Jim Langdon

About 100 years ago, the United States government imposed the first income tax pegged at 1 percent! Those who protested postulated that this would, over time, lead to increased taxation.

 Now Gilroyans pay a variety of federal and state taxes taking as much as 60 percent of their earnings (see my list in ‘Dispatch Letters’ Oct 2008). After surveying the onslaught of taxes imposed on the citizenry, one blogger recently queried, “What the heck happened?!” 

I’ll tell you what happened.  Corruption, excessively wild and reckless spending and social progressive policies pervaded the government!

Politicians of the former Union of Soviet Socialistic Republics enslaved those who objected to their liberal, socialistic ideals, forcing them to live in places like the 250-mile stretch in Siberia, where they were systematically worked to death.  Those, who embraced or made no objection to socialism, were given promises, employment, job security and were paid by the U.S.S.R. 

These socialist workers had no incentive and soon lost their initiative and enterprising spirit.  In 1991, after 70-plus years of socialism, the Union of Soviet Socialist Republics’ reign ended as the economy of the U.S.S.R. collapsed. Instead of “pretending to work”, many became homeless street people who refused to find work.  Nineteen years later, they are still uttering, “Who’s going to take care of us?” Sadly, there is no one. 

While not saying U.S. social progressives will follow the U.S.S.R.’s style of socializing the populace to achieve their social utopia, they shrewdly use a different tactic to meet their socialistic ideals. They are okay with allowing the citizens to stay in their place and work, allowing them to feel well-to-do with good wages and salaries, while encouraging the forming of labor unions.

At the same time, they implement enormous social programs which created a huge and unsustainable national debt. Then they strive to tax everything under the sun thus stifling free enterprising commerce, resulting in higher prices, eliminating many jobs for Gilroyans, making it harder to put food on the table, make car payments and pay the rent. All of which threatens to collapse the U.S. economy.  Do they not understand, “You cannot help the poor by tearing down the rich?”

Dispatch contributors like Marc Perkel and Lisa Pampuch seem to be chasing idealistic, social progressive goals while ignoring sound economic principles. Consider the left’s idealistic social goal that every American should own a home even when they have insufficient income to pay. A nice ideal but not if the payments cannot be made. Because of the political pressure brought upon them by social progressives, regulators turned a blind eye to sound guaranteed mortgage-loan regulations, allowing banks to lend to unqualified home buyers. 

Then progressives quietly pushed and assured investment banks of guarantees, should any loan losses occur. Social democrats didn’t believed or didn’t care that unqualified buyers couldn’t make their payments when their interest rates rose sharply. 

Americans remember the turning-a-blind-eye term used for “stated income” (“liar loans”) on mortgage applications.  They also remember the blind-eye term used for “no down payment” on home loans and “interest only” and “partial-interest only” payment provisions. 

They remember the regulators turning a blind eye because their tax dollars are now paying for this colossal social-economic disaster brought about because basic economic principles were ignored. Yet progressives continue to embrace wild spending and extracting additional taxes such as Obama’s Mandatory Health Care Plan and other programs.  

Gov. Jim Douglas of Vermont on the other hand has cut taxes, namely the capital gains tax and eliminated the death tax; vetoed new tax increases and cut spending. Businesses and new jobs are returning to Vermont!   

Eventually, because the nation’s enormous debt cannot be solved by increased taxation and Congress refuses to cut spending, America will be hard pressed to keep from printing trillions of dollars resulting in strong inflation, if not super inflation. 

Such inflation robs Americans of anything they can or have saved and would collapse the economy. High unemployment is currently holding back inflation, but the inevitable will be upon us: excessive taxation or excessive inflation … or both.

The finger of blame for America’s enormous financial crisis can be pointed at many: the consumer, the mortgager, the banker, the regulators who caved in to pressure and promises from social progressives – but the true onus is upon those who imposed their idealistic social policies to begin with.

Gilroyans and Californians need to vote for a different candidate in November if their state and national politicians refuse to openly and specifically promise to embrace sound, economic policies like Vermont.

Guest columnist Jim Langdon has lived in Gilroy since 1955. He is a retired owner of a credit business, former president of Gilroy Chamber of Commerce and state director of Gilroy Jaycees.