I discovered this graphic through the Thomas Jefferson Club blog at http://thomasjeffersonclubblog.wordpress.com/2010/07/15/taking-apart-the-federal-budget/.  They always have good information there.  Well done!

Fox news has been reporting on the new Contract From America.  You can read it at http://www.thecontract.org/the-contract-from-america/.  It  is a document from Tea Party Patriots that contains common-sense commitments that our representatives should  be supporting.  Let’s hold our candidates to these committeemen.

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• Gingrich Calls for New “Contract with America” (politicalwire.com)

Required reading for all (especially Congressman Murphy): Declaration of Independence, US Constitution, and the Heritage Foundation 2010 Budget Chart Book.

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• Free Pocket Constitution and Declaration of Independence (freebiereporter.com)

The article also includes details on other job killing legislation including:

• ObamaCare
• Energy taxes (aka “Cap and Trade”)
• $3.8 Trillion dollar budget

The last thing we need is more spending and more taxes.  Our economy will collapse from these dangerous policies.  What happened to “Pay-Go”?

And let’s not forget the socialist takeover of private industry including:

• Banks (TARP)
• Insurance (AIG)
• Automotive (GM)
• Health Care (ObamaCare)
• Housing (Fannie & Freddie)
• Education (student loan take over in Health Care bill)

All of these job/economy killing policies were also voted for by Patrick Murphy.  Let’s stay motivated and vote them both out!

• Will the government decide to bailout one of their competitors or perhaps even take them over because they are “too big to fail”?  Will they need to compete with the government? 
• Will Cap & Trade pass and drastically increase their energy costs?
• Will health care reforms raise their cost of labor by as much as eight percent?
• Will out of control spending continue causing inflation and/or higher taxes?
• Will the Bush tax cuts expire?  What will the new tax brackets be? 
• What will happen to employer paid taxes including: corporate taxes, Social Security, Medicare, excise taxes, etc.?

I believe that:

• Taxes should not be increased and no new taxes should be created.
• Spending should be frozen at pre-bailout levels until our budget is balanced.
• Any additional spending, for programs such as health care reform, needs to be offset by spending reductions elsewhere.
• Increasing government spending and taxes will cause additional job loss (both blue collar and white collar).

We need to set a clear direction so our businesses know that we are serious about creating an environment that rewards entrepreneurship, creates good paying jobs, and eliminates the “fear of the unknown”.

This Real Clear Politics article outlines where our tax money will be spent in some detail.  Here is a summary of the articles findings: 

Our government is spending $33,880 per household in 2009 (nearly $8,000 more than last year).  The average household is paying $18,277 in taxes and the remaining $15,603 will be added to the national debt. 

Here’s a breakdown of the spending:

• $9,418 for Social Security and Medicare
• $6,327 for bailouts
• $5,850 for defense
• $4,745 for Anti-Poverty programs
• $1,210 in interest on the federal debt
• $982 on Federal employee retirement benefits
• $902 on unemployment benefits
• $819 on Verterans’ benefits
• $699 on Health Research and regulation
• $528 on highways and mass transit
• $452 on Justice administration
• $415 on education

How many pages are in the US Tax code?

That’s a really good question.  According to this web page, the US Government Printing Office says it is 16,845 pages.  The same web page quotes some of our representatives saying it is anywhere between 2,500 and 2,500,000 pages long.  The original tax form was created in 1913 and was four pages, including instructions.  It can be found here.  I believe we need to be closer to 4 pages than 16,845.

Some history on income tax

As mentioned above, the income tax was instituted in 1913 with the 16^th amendment to the Constitution.  It was intended to levy taxes on the top one percent of income earners in the US. 

The Alternative Minimum Tax (AMT) was implemented in 1970 to target 155 (that’s correct one hundred and fifty five) high-income households that were paying little to no income tax because of deductions and loopholes.  Now it affects over 24 million people and essentially creates a tax penalty for the middle to upper-middle class.

Does our tax code favor sending jobs overseas?

It definitely does.  US Corporations can deduct their expenses on their US tax forms (a 35% deduction) and declare income in another country with a lower tax rate (Ireland’s is 12.5%).  They need to pay the difference between the 35% and the 12.5% when they bring the money back into the US.  So, they keep it overseas and “loan” money to their US divisions.  You can read USA Today’s take on it here.

What about our high corporate tax rate?

Many people point out that the US tax rate of 35% is the second highest in the world and must be lowered.  However, this Center on Budget and Policy Priorities summary shows US corporations pay an average of 13.4%.  What I find really interesting is that the lowest tax rate is -46%.  Basically, these are companies where our tax money is subsidizing companies through tax breaks and loopholes.  Obviously, we need to reform corporate taxes to “level the playing field”, especially for small businesses.