Sequestration or “The Sequester” is
simply put a budget cut strategy. This strategy consists of automated budget
cuts on the spending of the United States Federal Government upon particular industry
areas of the nation.
This budgeting strategy was commenced
due to the severity of the fiscal policy as a result of the Budget Control Act
2011 (BCA), which was signed at 2nd august, 2011 by President
Barrack Obama (Congress). The initial objective of sequestration was to simply
provide incentives for the “Supercommittee.” The Supercommittee refers to the selected
joined committee on the deficit reduction (Matthews). Despite valiant
efforts, that remained far from reality.
Although the initial idea behind
the strategy was well-designed, the implementation created various problems for
the general public instead of creating ease. According to this strategy, a
total of $85.4 billion will be saved by various budget cuts. The industrial
areas where these cutting would take place include:
Country Defense (almost $42.7
billion cut or 7.7% of the original amount)
Domestic Discretion (almost $28.7
billion cut or 5.1% of the original amount)
Medical needs (almost $9.9
billion cut or 2% of the original amount)
Other Mandatory needs (almost $4
billion cut or 5.2% of the original amount)
These values have been obtained
from an article by The Washington Post (Matthews).
The effectiveness of
sequestration can be checked by its impact on the citizens of the State because
after all the government provides for the people. The Sequester has affected
military personal, federal employees and the unemployed as well. Moreover, it
has also resulted in the loss of jobs.
Although the salaries of the military
personnel are exempt from this strategy, the additional benefits are not. The
additional benefits such as TRICARE, Education assistance etc. These programs
are affected by this strategy and the military personnel are being affected by
it indirectly, if not directly.
Moreover, the initial plan was to
not cut the salaries of the federal employees. However, in the implementation
stage, the time off was granted an unpaid title. This means that the salaries
of the employees are also cut indirectly.
“Make no mistake about it;
sequestration is no picnic, and I have sympathy and respect for the jurors who
put up with that incredible hardship.” – Marcia Clark
In addition to that, the third
party affected is the unemployment insurance. The insurances at a state level
are exempt because they are paid with the taxes collected by the state itself.
However, the EUC (Emergency Unemployment Compensation) is headed by the federal
government and thus, is also a subject to budget cuts.
Despite the individual loses, The
Sequester has resulted in almost 900,000 less jobs opportunities every year (Matthews). Moreover,
approximately 1.8 million people will lose jobs (Matthews).
Thus, sequestration has effected
the military personnel, federal employees, and the unemployed as well. Moreover
it also resulted in the annual reduction of jobs available. It is due to these
factors, that the sequestration is recommended to be eradicated as it brings
more disadvantages as compared to the advantages.
Tax Internet Commerce
With the modern technology, almost
everything can be accomplished online. Moreover, even selling and buying goods
online is easily accomplished these days. However, the increase in sales in online
stores means a decrease in sales in physical stores. Thus leading to an overall
reduced amount of tax paid. So in order to gain maximum tax from the civilians,
States are pushing tax on online stores such as Amazon, EBay etc.
It started off by applying taxes
on the sales of the companies that had a physical store as well as an online
presence (bricks and clicks business). An example of such a business would be
Amazon and EBay etc. However with the advancement of time, they moved on to
companies with only online presences too (clicks only business).
Currently thirty nine stores are collecting
taxes from online stores (Mercado). The interest
towards charging taxes for online sales has only begun for a few years. At the
end of 2016, only 29 states were collecting taxes, but now that number has gone
up to 39.
The question arises that why the states
and local government are applying these taxes anyway? The answer is simple, in
order to provide the public with the best services, the States and the local government
apply these taxation policies. An example of this can be Amazon which payed
approximately $13.8 million in the form of tax to South Carolina in 2016 (Brachmann).
Majority of the states that haven’t
already applied these taxations, are awaiting permission from the federal
Government. These include: Alaska, Delaware, and Montana etc.
Although this puts a strain on
the customer as they have to pay more, this is creating an ease for the government.
One of the main reasons why people preferred online sales was that they cost
less as compared to physical retail stores. However, with the application of
these taxes, the difference is reduced.
On the other hand, in order for
the government to function at its peak, it would require taxes for fire
stations, schools, public hospitals, and police department etc.
Another benefit would be to the
economy of the country. With proper taxations and policies, the economy would
have the upper hand and would easily flourish.
So despite the government giving
back the taxed amount, it is simple put an indirect way of increasing the
“The move to tax internet sales, clothed
as a “fairness” issue, is the typical wolf-in-a-sheep’s-clothing ploy so often
used by the government unwilling to cut expenditure to match revenues. It matters
not whether its proponents have a ‘D’ or an ‘R’ after their name. It is a tax
increase in either way.” – Bob Barr
Thus, the local or the state
government should not be focusing on creating more taxes such as online sales
tax. Not only because this creates problems for the individuals but also
because in order to meet the required budget of the government expenditures
should be cut as discussed in the previous question.