Tax Day 2010: The Boiled Frog

I presume you know the story about the Frog in the Pot? It goes something like this…

They say that if you put a frog into a pot of boiling water, it will leap out right away to escape the danger.

But, if you put a frog in a kettle that is filled with water that is cool and pleasant, and then you gradually heat the kettle until it starts boiling, the frog will not become aware of the threat until it is too late.

My fear on this Tax Day is my greater realization that we American citizens are the frog and the operator of the stove are the politicians in Washington.

Like millions of Americans, I filed and paid my taxes yesterday. For most, it is not a day we look forward to. Unless of course you are a Washington politician, because that is the day that treasury coffers re-fill. The problem is the taxes we pay are no longer enough to re-fill the coffers.

Outside of Washington, American families’ gathers around the dinner table to pick and choose what they will purchase vs. “pass on” so they can live within their means. “If we are going to send our kids to private school, we have to pass on new vehicles, a new boat, and that coveted Disney vacation” the conversation goes.

Washington politicians don’t have conversations like that. They don’t make hard decisions like you and I. They just spend, and spend, and spend into oblivion. When the money runs out, they just pile on debt, they borrow money from other countries, and they endanger our country’s long term welfare. Why? They can’t say no…AND…it isn’t their money anyways.

At some point the debt will come due and the only way to pay the bill will be for Washington politicians to stick it to you and me. But how do they raise our taxes and still manage to get re-elected? Simple, they do it very slowly…they increase the temperature of the pot 1 degree at a time…they levy 1 new tax at a time…so we don’t notice.

Because these politicians can’t keep soaking “the rich” (the wealthy don’t have enough money to pay for all of Washington’s debt), they will slowly target their next prey: the coveted middle class. The largest class of Americans, this class represents a real prize to money hungry politicians. But how?

A tiny little VAT tax. Made popular by our friends in Europe, the Value Added Tax is an extra 8-20% tax on just about everything you consume. Every time you buy something, just plan to add an extra 8-20% to the purchase price. This “shared sacrifice” tax will help us finally become “fiscally responsible”. Right?

I doubt it. With more money flowing into the treasury via the VAT, Washington politicians will just find more stuff to spend the money on. Washington politicians have yet to demonstrate any ability to say no to new spending. Why should you or believe them now? If we are smart, we won’t.

The pot is heating up, and unless we the citizens become engaged and demand meaningful change to restructure our entitlements and live within our means, we’re dead meat. My fellow Americans, it’s time to kick the politicians out.