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Monday, Aug. 29, 2016

Making some sense of budget numbers

Thursday, February 9, 2006

President Bush sent Congress a new $2.77 trillion budget this week and to be real honest, I'm not even sure how many zeros are in a trillion. The budget is heavy on defense, as would be expected in a time of war. But to address a soaring deficit, Bush also proposes to cut the rate of spending on a host of domestic programs from farm subsidies to Medicare.

Well the prospect of any reduction in long-term spending has the Democrats hot under the collar. As expected, Minority Leader Harry Reid says the budget is filled with "pages of giveaways to special interests and cuts to those who can least afford it." Of course, Reid is all wet as usual.

The Democrats know that the American public jumps at the words "special interests." It has become a buzz-word for big business or oil or some other evil supported by the Republicans. But they don't take the time to look at the fine print.

But more importantly, the Democrats always talk about the cuts that will leave the poor without food or medical care. What they won't say is that no program is being cut. The truth is the budget calls for a lower rate of growth. Instead of pumping an additional $500 billion into a program the budget wants to grow the program by only $200 billion, for example.

However, you'll never hear those words because we react to the word "cut." It's just a game played in Washington.

Bush also wants to make permanent the tax cuts adopted last year. And on that topic too, the Democrats are strong in their opposition.

But let's look at some tax numbers that were put on my desk this week.

The top 1 percent of all taxpayers - those fat cats making more than $295,500 per year - pay 34.3 per cent of all taxes. The top 5 percent of taxpayers pay over 54 percent of all taxes. And if you take the top 10 percent of all taxpayers - everyone making over $94,900 annually - they pay 66 percent of all taxes.

What about the low income population? Ok, let's talk about the lower half of all taxpayers. That group pays just 3.5 percent of all taxes.

The low income population pays virtually no taxes. It won't be long before 75 percent of all wage earners in the United States pay no taxes at all. That puts a hefty burden on those who make higher wages. And that is why you have to target tax relief toward that population. They are the only ones paying taxes.

This debate will continue and the budget will be revised. But the next time you hear a politician talk about spending cuts, don't believe one word they're saying.

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Michael Jensen
Michael Jensen