Taxation

House Democrats recently adopted a budget with massive tax hikes, many of which are directed at those Americans who can least afford them. By allowing the Bush tax cuts to expire in 2010, this budget will raise income taxes not only on those in the highest income brackets, but raises the lowest bracket from 10% to 15% as well. Estates would again be taxed at 55%. The child tax credit would drop from $1000 to $500. Senior citizens relying on investment income would be hurt by increases in dividend and capital gains taxes. It's not just that the Democrats want to raises taxes on the rich. They want to raises taxes on everybody.

The problem is, policing the world is expensive, and if elected officials insist upon continuing to fund our current foreign policy, the money has to come from somewhere. The wars in Iraq and Afghanistan have already cost us over $1 trillion. The Democrats' budget gives the President all the funding he needs for his foreign policy, so one wonders how serious they ever were about ending the war. While Democrats propose to tax and spend, many Republicans aim to borrow and spend, which hurts the taxpayer just as much in the long run.

It is becoming harder and harder for Washington and the mainstream media to ignore the ripple effect the collapse of the housing bubble is having on the economy. Inflation is up, cost of food is up, oil and gold are up, foreclosures are up, unemployment is up, government spending is at record highs, its seems that the only thing down is the value of the dollar. The middle and lower classes are getting squeezed as prices jump and wages stay flat.

Though it is good that Washington is acknowledging the problem instead of sweeping it under the rug, I always get nervous at their ideas of solutions. A proper solution requires an honest, in-depth look at the root of the problem.

A topic that is on the lips of many people during the past few months, and one with which I have greatly concerned myself, is that of moral hazard. We hear cries from all corners, from politicians, journalists, economists, businessmen, and citizens, clamoring for the federal government to intervene in the economy in order to forestall a calamitous recession. During the boom, many of these same individuals called for no end to the Fed's easy credit. Now that the consequences of that easy money policy are coming home to roost, no one wants to face those ill effects.

We have already seen a plan from the administration to freeze mortgages, a plan which is alleged to be only a temporary program. As with other programs that have come through this committee, I believe we ought to learn from history and realize that “temporary” programs are almost anything but temporary. When this program expires and mortgage rates reset, we will see new calls for a rate-freeze plan, maybe for two years, maybe for five, or maybe for more.

One major concern I discussed a few weeks ago regarding the Trans Texas Corridor is where the land will come from. Another concern is where the money will come from. Official government websites for the TTC assure that public-private partnerships will shield the taxpayer from bearing too much of the cost burden, but a careful reading shows the door is definitely open to public funding sources, while at the same time there is no doubt of the intention to charge tolls on the road.

Taxpayers already pay for their transportation system through hefty gasoline taxes, vehicle registration fees, and other fees. They have every right to expect the roads they have already paid for to be properly maintained and toll-free.

For decades we have welcomed new immigrants to our American "melting pot". We respect those who come here peacefully to pursue their American Dream. But Americans have noticed lately that modern problems associated with illegal immigration are at a crisis point. Taxpayers are now suffering the consequences.

Costs of social services for the estimated 21 million illegal immigrants in this country are approaching $400 billion. We educate 4.2 million children of illegals at a cost of $13.8 billion. There have been almost 2 million anchor babies born in this country since 2002, with labor and delivery costs of between $3 and 6 billion. There are currently 360,000 illegals in our prisons and we have spent $1.4 billion to incarcerate them since 2001. In Prince William County near DC, ICE can't deport criminal illegals fast enough and has actually asked its local jails to slow down on referring them. Jurisdiction over illegal immigration lies at the federal level, yet many municipalities are struggling with the compounding problems of mandated costs and tied hands. My office has heard from at least one sheriff in my district considering seeking compensation from the Federal government for the cost of so many illegal immigrant inmates that wouldn't be here if the Federal government was doing its job and protecting our borders. The problems are widespread.

"The one thing I fear if either of these cretins become president is higher taxes because I don't want to give the bums any more than I'm already giving them. They're bleeding me dry. I don't want to give the bums in the street another turkey sandwich. I don't want to give junkies another needle. I am sick and tired of the taxes I pay, and I don't want to pay another dime."

from Trevor Zimmer: Savage claimed Lantos used the Holocaust as "a weapon the rest of his life"

The Constitution guarantees Americans the right to be secure against all unreasonable seizures. My home state of Texas is unfortunately planning on some very unreasonable seizures of land with the monstrous Trans Texas Corridor highway project. The TTC plans call for a highway to cut through about 4,000 Texas miles, and with separate rail lines for passenger and freight, a multi-lane highway with separate truck lanes, utility and cable easements, this highway could be as wide as 1200 feet across. In the end this project would consume something like half a million acres of land in Texas . However, since the exact path of the road has not been determined, it is putting much more acreage in jeopardy, and in limbo.

Taking land is destructive enough. But the perpetual threat of taking an undetermined amount of land is hanging over the heads of millions of Texans and putting their lives at a standstill. Land is a store of wealth and a source of stability. This highway project is tragically threatening that for so many Texans.

Madame Speaker, I find it odd that HR 5140, a bill allegedly designed to provide a stimulus for the anemic American economy, contains provisions that could damage the economy and hurt American taxpayers. Specifically, the provisions increasing the loan limitations of the Federal Housing Administration and the Government Sponsored Enterprises (e.g. Fannie Mae and Freddie Mac), will exacerbate the long-term problems in the housing market, and may even lead to a future taxpayer bailout of the housing industry. The recent bursting of the housing bubble should have taught my colleagues the dangers of government polices that distort the market by diverting resources to housing, when those resources would be more efficiently used in other sectors of the economy.

Ironically, many of the same members who insisted that upper income taxpayers be denied the tax rebates are enthusiastic champions of the provisions in HR 5140 increasing the FHA loan limit to $633,500 and the GSE loan limit to $729,750. This increase in the loan limits represents a generous taxpayer subsidy to high-income homeowners.

This past week in Washington there has been much talk about the economy. It seems by their actions the leadership and the Fed is finally willing to admit we have a problem, and we need to do something about the economic mess we are in. This is a good thing. However, they are still not being honest about the root cause of our impending crisis and want to deal only with symptoms, not the disease.

There are some positive aspects of the highly lauded economic stimulus package that has been negotiated. I am in favor of taxpayers getting some of their money back, however temporary tax cuts and one-time rebates will not “fix” the economy. What we desperately need right now is real deep significant tax cuts that are enabled by big spending cuts and reduction of government waste that is so rampant. Unfortunately, too many in Washington still believe we can spend our way into prosperity, which does not work and never has.

Regarding the proposed stimulus package: What we see may be the government scrambling for solutions that make the problems worse. I know that it will fail in the long run. It might help if total expenditures are cut drastically and the 2002-03 tax cuts are made permanent. What we do not see is the cause of the problem and what the end result of this fix will be.

Congressman Ron Paul is an original cosponsor on legislation proposed by Representative Harry Mitchell (AZ-5) to block Members of Congress from receiving the automatic pay adjustment scheduled to take effect in 2009.

“With all the waste going on in government, the dollar losing its purchasing power, the collapse of the housing bubble, the economy is really struggling. We Members of Congress should not be padding our pocketbooks when our constituents are tightening their belts,” stated Congressman Paul.

Congress is re-convening this coming week and I would like to take this opportunity to give my legislative forecast for the coming year. Here are a few things we can expect to see from Washington .

First and foremost, we will see ramped up spending for the warfare/welfare state. There is no resolution or end in sight on the Iraq occupation. While the American people try repeatedly to communicate to Washington that enough is enough, there still remains little political will in Washington to bring the troops home. The war will continue to require mountains of taxpayer and newly printed dollars, and our economy will sink under the burden. If we are manipulated into a second war, the effects on our economy will be truly devastating. Welfare and entitlement programs will also be ramped up as the economy flounders and budgets in American households are strained.

The U.S. House of Representatives reports that Congressman Ron Paul has once again run his Congressional office in a frugal manner, and he will likely return tens of thousands of dollars to the Treasury once again this year. Preliminary estimates forwarded to Paul’s office indicate he has about $75,000 left in his account.

“Since my first year in Congress representing the 14th district I have managed my office in a frugal manner, instructing staff to provide the greatest possible service to the people of the 14th district at the least possible cost to taxpayers,” said Paul.

The total burden we carry due to governments is revolting. Some think it is 10 or 20 percent. Some think the value of what government returns to us from taxes would cost the same if provided by someone else. Most people do not have the facts. If they did, perhaps they would start to have revolutionary thoughts.

One Christmas tradition Congress could do without is the broken process of passing the annual Omnibus Spending Bill, which we recently did right before the holiday recess.

Every December Congress fights and argues over spending and never seems to be able to pass the necessary appropriations until the very last minute. There is panic and threats of government shut downs and reduction in essential services. And they always threaten the essential services, as if there is no waste they could possibly eliminate instead. This past December, right on cue the administration warned about dire civilian defense department layoffs if the money didn't come soon.