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I’m not a fan of taxes anymore than the next person.  At the same time, I really dislike being irresponsible in how we deal with our national finances. 

We have a fiscal problem in this country.  Our problem came as a result of having two wars start at the same time we did very large tax cuts.  In fact, it was the first time in our countries history that we not only started down the road of wars; we decided not to even try to pay for them.

Since those tax cuts were put in place we’ve added over $10 trillion dollars to our national debt.  You may remember that when George W. Bush came into office we had a budget surplus.  I don’t know about you, but $10 trillion dollars is a lot of money.  So much money, I can’t even fathom it.

Yes, we have a deficit problem

This is not a Republican or Democratic issue.  It’s an issue of will.  Do we as a country have the will to start being fiscally responsible?  For me, I would have rather seen the “fiscal cliff” come with nothing done.  The Bush tax cuts would have been rescinded and all Americans would pay more.

I have a question for Mr. Norquist.  What’s wrong with putting our old tax rates in place and then cut spending?  We seem to get it backwards in our country.  We’ve done it since Ronald Reagan.  We cut taxes with the promise of cutting spending, but we never get around to cutting spending.

If Grover was being an honest broker, he would see that killing government is not the answer.  The answer is being fiscally responsible, then if we choose to kill government, we can then and only then lower taxes.

This might sound like a Democratic screed

It’s not - I’m approaching this problem like any business owner would.  If my business isn’t making enough money I have two choices.  I can raise my prices (increase taxes) or decrease spending.  Sometimes I do both, but in many cases increasing prices will have a much more dramatic and rapid result than decreasing spending.

It takes a long time to decrease spending.  Not all spending is easily decreased.  In a business you and I have made commitments for items that can’t be quickly or easily reduced.  This is not only about headcount, but commitments we’ve made that take time to unwind. 

It’s the same for the government.  They have commitments that are not easily unwound and will not show up in our national ledgers for years.  On the other hand, a price increase shows up very quickly and can make a dramatic effect.

Sharing the pain is the right thing to do

We have close to 50% of the people in our country pay no income taxes.  To me this is an unconscionable situation.  If we don’t have the vast majority of our citizens paying into the system something is wrong.  Yes, those at the top seem to have gotten much of the benefits from our tax policies for the past twelve years.  At the same time we’ve seen a significant portion of our fellow citizens fall off the tax roles.

I know that when I pay nothing for something I value it less.  That might be part of the problem we have.  Most of us don’t really care about the deficit because we’re not seeing our paychecks diminish as a result of our national deficit.  We need to have national will if we want a smaller government.  Until then everyone needs to pay more.  It’s the only responsible thing to do.

This post is about budgeting.  Budgeting is something many private business owners do poorly as well.  I believe this is because we make our budgeting process too cumbersome.  We’ve written a special report on a simplified budgeting process.  To get this report, click on the button below.

Securities and Investment Advisory Services offered through NFP Securities, Inc. (NFPSI), Member FINRA/SIPC. Stage 2 Planning Partners and NFPSI are not affiliated.

This article is published for residents of the United States only.  Registered Representatives and Investment Adviser Representatives of NFP Securities, Inc. may only conduct business with residents of the states and jurisdictions in which they are properly registered.  Therefore, a response to a request for information may be delayed.  Not all of the products and services referenced on this site are available in every state and through every representative or advisor listed.

The opinions in this post are those of Josh Patrick alone.  Neither NFP Securities or other members of Stage 2 Planning Partners agree or disagree with this post.

Topics: cost decisions, Change, strategic planning

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