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01/13/2003 Archived Entry: "The costs of war"
The United States is heading toward a record deficit of $350 billion. As the London Spectator notes, "the cost of tax cuts and increased military spending threaten to unsettle the world's largest economy."
Meanwhile, the U.S. dollar continues to fall on talk on tax cuts which may be funded by "dramatically increased borrowing by the US federal government."
Is the Bush tax cut even a real tax cut -- what Murray Rothbard used to call a "cut-cut" to distinguish real tax relief from the phoney sort. Lew Rockwell doesn't think so. Rockwell writes, "The Bush tax cut does not address what will be the most aggressive means of taxation in the coming ten years, the thoroughly evil Alternative Minimum Tax. If nothing is done about this, it will become a larger revenue generator in the future than the current income tax."
In an article on the dangers of the AMT, Mark Thornton observes, "If you work too hard, are too productive, and place your hard-earned savings in assets that are protected against taxation, the government is going to slap you with an AMT of 26 percent (28 percent over $175,000). The AMT originally was designed to make sure that the extremely wealthy paid their "fair share" of the tax burden. But it was instituted at a time when the highest marginal tax rate was 90 percent, and the tax code provided lots of juicy tax loopholes for wealthy Americans. Tax rates have droppedóbut now the AMT, like a stealth bomber, is raising the tax burden on those earning as little as $33,000."
The money grab, sped along by war and Homeland Defense, is not merely on the federal level. State budget deficits are also prompting state governments to institute increases in every minor tax/fine/filing fee they can get away with. For example, California is raising the tax on cigarettes by $1.10 a pack.
Of course, in the midst of phoney tax cuts and real hikes in vice tax and other "fines," government on local, state, and federal levels are being reduced.
The economic costs of the current War on Terrorism and the imminent War on Iraq are not lost on the American public, who are not stupid. An anti-war protest on Saturday in Los Angeles drew thousands of people, some of them wearing the slogan "Don't Cut Medicare for Bombs and Missiles" on T-shirts, buttons and baseball caps.
On Movement News:
Mark Skousen has published an article on his stint as head of the Foundation for Economic Education, including his take on his forced resignation.
On a Personal Level
My brother-in-law's team won the basketball championship yesterday, with Brad and I applauding from the bleachers.
Now back to work.