Thursday, January 18, 2007

Expect Your Taxes To DOUBLE

US Comptroller Testifies That US Taxes Will Have To Double

Only Reuters covered this story:

WASHINGTON, Jan 11 (Reuters) - Tax increases are essential to avoiding long-term fiscal ruin and overcoming a "demographic tsunami" that would eventually swamp the U.S. budget with senior citizen health care and retirement costs, Comptroller General David Walker told Congress on Thursday.

At a Senate Budget Committee hearing on America's long-term budget outlook, Walker urged Congress to waste no time in cutting spending on massive government programs, many of which will grow significantly as large numbers of "baby boomers" retire.

But Walker also warned the new Democrat-controlled committee that cutting spending will not be enough.

Tax revenues at the current 18 percent of Gross Domestic Product "won't get the job done," said Walker, who heads the U.S. Government Accountability Office, the investigative arm of Congress.

Republicans have been steadfast against any federal tax increases and are hoping to make permanent a series of President George W. Bush's tax cuts that expire after 2010, despite the hundreds of billions of dollars in lost revenues.

Asked what level U.S. taxes revenues should be at, Walker said, "I can't tell you an exact number ... but more than 18.2 percent (of GDP), but below 25 percent."

Since nearly the beginning of Bush's presidency, the U.S. has suffered chronic budget deficits caused by a combination of a then-slowing economy, huge new domestic security costs, the war in Iraq, tax cuts and rapidly growing government health care costs for senior citizens.

Those deficits peaked at a record $412.7 billion in fiscal 2004 before falling to $247.7 billion by fiscal 2006.

They would be significantly higher, however, when taking into account government programs paid with annual Social Security surpluses, which will last for only 10 more years. Without this diversion of retirement money, the fiscal 2006 budget deficit would have been about $434 billion, Walker noted.

"The picture I will lay out for you today is not a pretty one and it's getting worse with the passage of time," Walker said.

For example, in 2000, the government's major future liabilities, including publicly-held debt, Social Security and Medicare and other pension-related costs, totaled about $20 trillion, Walker said. By 2006, he said that figure had grown to about $50 trillion.

Budget Committee Chairman Kent Conrad, a North Dakota Democrat, said he would spearhead a bipartisan effort this year to rein in long-term government spending. That effort, he said, would include input from the White House and would require a "supermajority" of negotiators and the entire Congress to approve. Tax code changes are likely to be part of that review.
Hmmm... I wonder why neither the Mainstream Media nor either political party wants to talk about what's going to HAVE to happen soon? That is, of course, broadly raising taxes to pay for Bush's idiotic $2 trillion dollar war and the old Republican congresses additional $2 Trillion in profligate spending combined with their regressive tax cuts for the rich.

Could it be no one wants to discuss tax raises because the Presidential Primaries are already heating up, and that everyone wants to pretend that there isn't a problem until the 2008 elections are over? There's precedent for just such a "conspiracy theory" to be put forth... in 1988 the Republicans and Democrats agreed to hide the scope and nature of the Savings & Loan Crisis until after the '88 Presidential Election. Both parties knew that the winner would be left holding the bag for the tax raises, tax raises which proceeded to be a partial cause of the early 90's recession that cost George Herbert Walker Bush the Third his Presidency in 1992. The most amazing part? That economy-hobbling scandal ONLY cost $150 Billion. Billion with a B. Bush & the Republicans have increased the Federal Debt by more than $4 TRILLION over the last six years. Imagine what the tax raises to pay for THAT is going to do to the economy.

I mean, Bush won't care... he'll be out earning cash for giving speeches to his Chinese and Saudi overlords by that point, but the rest of us are going to feel it, and how.

Walker's full statement can be accessed at the GAO website. Go read it... it's terrifying.