2010 Q1 | The French Quarter
Upon picking up my oldest children at BWI for Easter Weekend, it was with some amusement that I listened to both complain on the way home about the amount they were paying in taxes. Proving the apple falls not far from the tree, the oldest son’s observation remains unprintable—let’s just say that the visual equivalent might be akin to sharing one bunk with 3 inmates at the Fallsway Apartments, aka the Baltimore City Jail.
With recent developments emanating from the Augean Stables 35 miles south of here, that inmate number is likely to increase exponentially. In fact, if Einstein is to be believed—the definition of insanity is doing the same thing over and over again and expecting different results—some might conclude the inmates are running the asylum. And if the notion of Einstein intimidates, a highly recommended alternative would be F.A. Hayek’s The Road to Serfdom. But I digress…
Quite simply, we are on an unsustainable path. Matthew Continetti, Associate Editor of The Weekly Standard, had this to say in the lead editorial of magazine’s March 15, 2010 issue:
As it stands, Social Security, Medicare, Medicaid, and debt service constitute more than 60 percent of all government expenditure. The number is set to rise more than 75 percent within a decade. Left unchecked, these four items will consume the entire federal budget by midcentury.
American Enterprise Institute scholar Andrew Biggs estimates the federal government would have to impose an immediate and permanent 30 percent increase on every tax in order to balance its books—in 25 years.
And yes, folks, that was written a week before the historic passage of the Patient Protection and Affordable Care Act, aka Obamacare.
In a related vein, I was reminded that in some years past we have turned to the Tax Foundation (www.taxfoundation.org) to check up on the occurrence of Tax Freedom Day. Having last consulted this source three years ago, under the circumstances it was surprising to learn that this year’s Tax Freedom Day, April 9th, will arrive more than two weeks earlier than in 2007. The reasons for this may be found at their website, but before getting carried away by this apparent good news, the Foundation adds this:
Tax Freedom Day does not count the deficit even though deficits must eventually be financed. Since 1948, when Tax Freedom Day was first calculated, the difference between what governments are spending and what they’re collecting has never been as great as during 2009 and 2010. If Americans were required to pay for all government spending this year, including the $1.3 trillion federal budget deficit, they would be working until May 17 before they had earned enough to pay their taxes—an additional 38 days of work. …Americans will pay more taxes in 2010 than they will spend on food, clothing and shelter combined.
Incidentally, each state has its own Tax Freedom Day—ranking #4 when it comes to state tax burden, we Marylanders can adjust the date to April 19th. And whereas the loyal opposition proposed a 2.3% reduction in spending and a plan to eliminate Maryland’s structural deficit by fiscal year (FY) 2014, the FY 2011 budget just passed by the Maryland House of Delegates will leave the state with a structural deficit of $1.5 billion for FY 2012 (that, according to my representative, Delegate Wade Kach, R. 5th District). There’s more than a little truth to the claim that Maryland is “America in Miniature.”
We’ll end with this thought from George Washington—“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”
—Geordie French