Congress’ fiscal cliff bill rewards large corporations with “tax extenders” to the tune of $205 billion. The multi-billion dollar tax incentives caused some CEOs to suggest the government should go ahead and tax the rich a bit more. Goldman Sachs CEO Blankfein, for example, announced that he “wouldn’t preclude” increasing taxes on the rich. Not surprisingly, the bill awarded $1.6 billion in tax-free financing for Goldman Sachs’ new headquarters. It was subsidized schils like banker Blankfein who flew to Washington in November and December to “discuss” the fiscal cliff with Congress.
In addition to Goldman Sachs, the bill snuck in tax credits for two- and three-wheel electric cars, Hollywood studios such as Disney, asparagus farmers, mining companies and railroads. Joe Weisenthal of the Business Insider observed, “Some might think this is nefarious Â— that politicians see a huge bill and then sneak in all these random things.” Quite true. But then he justified the whole program when he tersely remarked, “It’s just how it works.” How can he admit that Congress snuck in all of these pork barrel corruptions and then assure us the system is working? The system does not work.
The fiscal cliff bill does nothing to address the obvious problem: government is too expensive. It does not require special logic to know that a more expensive government must come from taxpayers. And the solution is not as simple as taxing the rich – they might not work as hard or invest as much as their taxes increase. The government’s debt is turned into money and the result is lower purchasing power for the existing money of taxpayers, i.e. theft. The bill does nothing to reduce spending. Rather than reducing the government’s bills, the politicians will continue to lie about the need to “pay the bills” by raising the debt ceiling, which is really the way to avoid paying the bills.