Tuesday, July 19, 2011

Cuts, Cap, And Tax

Some things make me wonder, like the latest plan to forestall financial disaster. I read that the proposal is to institute 75% in spending cuts along with 25% in tax increases. Sounds good for the good guys, right? Maybe, but why make it so complicated? Let's do the math:

Reduce spending by 3 dollars, raise taxes by 1 dollar = 2 dollars net in reduced government spending.

Call me simplistic (read: skeptical), but couldn't we just have easily had a deal which reduced federal spending by 2 dollars and achieved the same result? Well...yes! So why don't we? It's really simple, the only reason to tie tax raises to spending cuts instead of simply agreeing on reduced spending is because you want to raise taxes and not cut spending. Keep it simple, stupid, and don't get snookered.


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