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View Full Version : Why are Americans so opposed to tax increases?


Dr. Drake
08-06-2011, 11:00 AM
Nobody likes paying higher taxes. I get that. But it seems like the idea of increasing taxes on middle-class Americans* is anathema, political suicide, six steps beyond super-ooper-duper crazy, and slightly worse than worldwide financial meltdown. Note: I'm from California, and Prop 13 passed when I was in first grade, so my perspective comes from that. Please correct any mistaken assumptions here.

It seems like Americans' attitudes towards tax, particularly income tax, are dramatically different from those in other Western nations. If that's so, how long has it been like that? Was there a time when Americans were more willing to consider tax increases, and if so, when did it change and why?



*Whether or not to raise taxes on higher incomes is a separate issue, and a bit easier for me to understand why the Ds & Rs have their respective positions.

BlinkingDuck
08-06-2011, 11:10 AM
I think, mainly, but is only a guess. that Americans are not used to GETTING much from their taxes. In other Western countries you appear to get something. Like health care. In the U.S. you pay and pay and pay but never really seem to get anything back. Whenever you need it, there doesn't seem to be much help available. You really do feel 'on your own' with little safety net and so your attitude is 'well, if I don't get anything, why should I pay more in? I NEED that money as my safety net'.

I know I know, Americans supposedly DO get benefits from their taxes. It just doesn't seem like you do.

Chessic Sense
08-06-2011, 11:15 AM
Because independence is at our nation's core. We loathe the idea of giving the ant's food to the grasshopper. If he wanted food, he should have worked all summer like I did.


Secondly, I already pay 33% of my income in taxes to local, state, and federal governments, and that doesn't even count the sales tax, excise tax, property tax, utility tax, etc. How much more do you need?!

dolphinboy
08-06-2011, 11:26 AM
You shouldn't base everything on what the republicans say. The country is still pretty evenly divided. I think there are an equal number of Americans who are willing to except modest tax increases as long as they are fair, and that's the rub. Large corporations and the ultra-wealthy aren't necessarily paying their fair share so why should the middle class make up the difference? Get rid of the loopholes for the rich and corporations, and perhaps the middle class would be even more willing to swallow a tax increase.

Shakester
08-06-2011, 11:28 AM
There isn't a simple answer to this question. It's a GD, not a GQ.

I'd tell you my opinion, but I've been shouted at by mods for expressing opinions in GQ before, so I'll leave it.

Exapno Mapcase
08-06-2011, 11:29 AM
Whiskey Rebellion (http://en.wikipedia.org/wiki/Whiskey_Rebellion).

A segment of Americans have always gotten hysterical over paying taxes.

It's the same today. A vocal segment is driving the discussion. Many polls show that the majority would agree to tax increases, especially if they fell on somebody else - and remember that is the only proposal that is on the table today.

There is a segment that doesn't seem to understand the different between government budgeting and other types - as soon as you hear that government should be run like a business or a home, rational argument ends. And some people are using this as a manufactured crisis for ideological reasons.

Americans are highly in favor of government that benefit them. That's why social security and medicare reform is impossible. And that's why there have been articles in the papers about some tea party freshman representatives earmarking billions in projects for their home districts, even though they ran to cut earmarks. It's probably this hypocrisy that's at the root of the issue. A segment will always believe that other people are getting all the benefit, and that fear of the other is exploitable. Fear of the Other is behind most every action that Americans have ever taken in their history. Even though we're the safest and most protected country that's ever been. There's a dissertation waiting to happen.

Dr. Drake
08-06-2011, 11:34 AM
There isn't a simple answer to this question. It's a GD, not a GQ.

I'd tell you my opinion, but I've been shouted at by mods for expressing opinions in GQ before, so I'll leave it.Well, the GQ questions are "is there a difference in America vs. other nations" and "if so, when did this come about". "Why" is a GD, I'll admit, but I'm more concerned with the former. dolphinboy suggested it's a false premise, and a couple of people have expressed the belief that the middle class are paying a disproportionate share. I just can't imagine that this was the attitude that passed the 16th amendment, though, but I'll admit my knowledge of US history is pretty shaky in the 20th century.

Shagnasty
08-06-2011, 11:35 AM
Part of the reason is that tax increases are not usually (but not always) tied with some very specific goal. They are usually asked for after the money has already been spent and it is time to try to start digging out of the hole. The only problem is that is basically an admission of bad government, bad budgeting, and poor fiscal discipline. The right way to ask for taxes would be to stay within budget almost all of the time but constrain what is attempted. If a new demand becomes clear like better infrastructure, new taxes could be proposed to pay for those and then that money could also be also carefully managed for what it can realistically accomplish. Taxpayers know it doesn't work that way. A given tax increase could be used for anything including digging us further in a hole. We could easily pay much more in taxes and have nothing to show for it at the end including just as much debt or even more. That is not good and it is one of the biggest reasons don't like to hand the government blank checks.

md2000
08-06-2011, 11:38 AM
Because independence is at our nation's core. We loathe the idea of giving the ant's food to the grasshopper. If he wanted food, he should have worked all summer like I did.


Secondly, I already pay 33% of my income in taxes to local, state, and federal governments, and that doesn't even count the sales tax, excise tax, property tax, utility tax, etc. How much more do you need?!

Hmmm? On income of $68K (Taxable income of $65 after assorted deductions) I paid $15,567 in federal and provincial taxes, with a marginal tax rate of 35%. Mind you I pay $6000 in property taxes (school and municipality) and sales taxes across the country vary from 5% to 15% I think. Unlike Americans I don't have to pay any health care. (My employer does pay a prescription plan and a dental plan, but it hardly compares with what an American has to cover). As of today, the Canadian dollar is a few cents more than the US$.

So either you live in a very high-tax state or you are pulling in one heck of a paycheque. Take comfort that instead of health care, you occupy several pockets of land in Iraq and Afghanistan and have several space shuttles. Plus, your doctors make substantially more than ours. That's where the money goes.

BigT
08-06-2011, 11:58 AM
IN these other countries, how easy is it to kick out the people who do something you don't like? Politicians around here are always in campaign mode, and thus are scared to do anything that decreases their chances.

Furthermore, there seems to be a much larger incidence of the far right in our country, in the form of those that constantly wants to decrease the size of the government.

Finally, and this is a stretch: we have the highest incidence of creationists per capita. This indicates that a lot of people iare used to ignoring inconvenient facts, hence there are a fairly loud (and possibly large) group of people who do not see the problem with decreasing taxes without decreasing spending, or even while increasing it.

John Mace
08-06-2011, 12:04 PM
You shouldn't base everything on what the republicans say. The country is still pretty evenly divided. I think there are an equal number of Americans who are willing to except modest tax increases as long as they are fair, and that's the rub. Large corporations and the ultra-wealthy aren't necessarily paying their fair share so why should the middle class make up the difference? Get rid of the loopholes for the rich and corporations, and perhaps the middle class would be even more willing to swallow a tax increase.
Unlikely. How many Democrats are proposing that? The OP is asking why Americans are opposed to raising taxes on the middle class. I think it's accurate to say that only a small minority in the US are willing to consider that option. Especially now.

isaiahrobinson
08-06-2011, 12:11 PM
Partly it's because the US is such a large country. Here in the UK you don't generally get the sort of radical "all tax is government theft!" Ayn-Rand-libertarians that you get in the US, but the UK is much smaller geographically and has a much smaller population. A better comparison would be the EU, which is roughly the same size as the US. A lot of Brits, particularly on the right, are indeed fiercely opposed to giving any money at all to the EU. There's a sentiment that it's just shipping money hundreds of miles away to be wasted on bureaucracy.

Obviously there's other factors, including the strand of American culture that emphasises hard work, self-sufficiency and suspicion of government; whereas much of Europe, particularly the further east you go, still has a soft spot for communism. But I suspect if all the states in the US were their own countries, with their own completely separate tax and spending systems, the views on taxes in those states would be slightly less fierce and more akin to those you find in places like the UK.

PrettyVacant
08-06-2011, 12:16 PM
From afar, it seems what is dwhat isn't acceptable for the electorate doesn't really matter any more - it's what the folks who pay for the politicians to become elected want that matters.

There isn't a 'democracy' - if that's indeed what the USA still is - with this level of disconnection between electors and elected.

2ply
08-06-2011, 12:17 PM
I think, mainly, but is only a guess. that Americans are not used to GETTING much from their taxes. In other Western countries you appear to get something. Like health care. In the U.S. you pay and pay and pay but never really seem to get anything back. Whenever you need it, there doesn't seem to be much help available. You really do feel 'on your own' with little safety net and so your attitude is 'well, if I don't get anything, why should I pay more in? I NEED that money as my safety net'.

I know I know, Americans supposedly DO get benefits from their taxes. It just doesn't seem like you do.

This is the correct answer.

John Mace
08-06-2011, 12:26 PM
Partly it's because the US is such a large country...

That's an important part. We have Federal, State, and Local taxes. As you get more local, you will find people more willing to increase taxes. For many Americans, the federal government is a remote entity and if they get benefits from it, it's hard to see. Most of our interactions with government are going to be on the state and local level. That controls our sales tax, our driving laws, our property taxes, our schools, our police, our fire departments...

Dr. Drake
08-06-2011, 12:26 PM
This is the correct answer.It can't be the whole answer, because schools, roads, and parks are all paid for with taxes, and those are pretty tangible everyday benefits. Perhaps people don't make the connection, but I know I've spent a lot more time on the road and in school than at the doctor's. Everyone in California is complaining about the roads.

Some of my own problem in the US was the confusion between federal and state. My state taxes were much lower than federal taxes, but the state or local authority was the point of contact for most services. In Canada I was astounded that federal and provincial taxes were filed together: you send one cheque, the government divides it appropriately. In the US the state and federal taxes are distinct and separate entities.

ETA: I didn't see John Mace's reply when I wrote this. Interesting.

John Mace
08-06-2011, 12:34 PM
ETA: I didn't see John Mace's reply when I wrote this. Interesting.

The big exceptions to what I wrote are Medicare and Social Security, which mainly affects older people. They do vote like the dickens, though!

Magiver
08-06-2011, 12:37 PM
Why are Americans so opposed to tax increases?

Because there is no end to it. Votes are purchased with other people's money and eventually people figure out that it's their money.

The problem is exacerbated by politicians who deliberately spend more money than is taken in. This compounds over time so that less is available to spend because it's servicing the debt of past decisions. Eventually this financial house of cards collapses. It's not "if" it will collapse, only when. We're seeing the results in countries like Greece. It's a guaranteed event if it isn’t stopped.

I'll give a clear example of this in my home town. The last stimulus package allowed my city to purchase hybrid buses. They are very expensive machines and we already have a fleet of electric buses. If you assume that everybody got similar expenditures of other people's money one has to ask who is paying for it? Is your city paying for my city's "stuff"? If we can’t afford the new buses we certainly can’t afford the stuff your city received. So the answer to this question is no. It's being financed by China and the cost is passed down to the next generation with a premium attached to it. That means, before the next generation spends a nickel of tax money for their own use, they owe money on today's debt. By default, more money is collected and less benefit is received for it.

The opposition to tax increases is just an acknowledgment of this process that no matter how much money is taken, it will be squandered. The answer to debt is always a balanced budget. Reversing the debt burden means we have to be willing to get less benefit today for the tax money collected regardless of the amount collected.

md2000
08-06-2011, 12:39 PM
IN these other countries, how easy is it to kick out the people who do something you don't like? Politicians around here are always in campaign mode, and thus are scared to do anything that decreases their chances.

Furthermore, there seems to be a much larger incidence of the far right in our country, in the form of those that constantly wants to decrease the size of the government.

Finally, and this is a stretch: we have the highest incidence of creationists per capita. This indicates that a lot of people iare used to ignoring inconvenient facts, hence there are a fairly loud (and possibly large) group of people who do not see the problem with decreasing taxes without decreasing spending, or even while increasing it.

Canada (like many other parliametary countries) governments come in 2 flavours - minority, which are deadlocked, even worse into perpetual election mode, and constantly daring the other side to pull the plug... and majority, where the prime minister is dictator for 5 years, and they operate on the theory (usually true) that the public has a short memeory and pretty much anything unpopular can be done as long as there's at least 2 years to go before an election.

Some countries have regional or factional parties or proportional representation, and so can never achieve majority nirvana. Then you end up like Greece, where nobody can make a difficult decision without a bank pointing a gun at their heads.

The problem with the USA is the primary system. In most other countries, candiadates are selected by a vote of the party; just like the delegates used to do in the old US conventions. The group of party activists doing the selection was rarely more than 1% or 2% of the poulation. The USA by contrast, has primaries where the voters are not necessarily dues-paying party members. Instead of an election between 3 to 10 cnadidates, you have primaries. There. small but organized groups can have an undue influence. Just see how few people it takes to "win" a caucus state -somewhere like a few thousand. As Obama found when he ran for senator, the trick was to win the primary.

A riding nomination in Canada is remarkable if there are 500 people or more attending, and each has to pay $10 to join the party (or the organizer does it for them). Anyone trying to run for congress probably has to work his butt off for 2 years just to win the primary. Also, the head office has to approve the nomination, so there are often subtle messages to "don't challenge this guy" and sometimes favoured candates are parachuted into a riding.

The issue in any country is going to be willingness to compromise vs. zealot intransigence. Democracy only works if the losers are willing to admit they can't always win and can't always get things their way (and the winners don't exploit their power beyond reason). If even one side holds the position they will not compromise, then eventually the other side will call their bluff - where it inflicts the most damage. However, it takes real damage to get the message across that compromise is necessary.

fumster
08-06-2011, 12:48 PM
That's an important part. We have Federal, State, and Local taxes. As you get more local, you will find people more willing to increase taxes. For many Americans, the federal government is a remote entity and if they get benefits from it, it's hard to see. Most of our interactions with government are going to be on the state and local level. That controls our sales tax, our driving laws, our property taxes, our schools, our police, our fire departments...I think this is completely wrong. First, there have been cuts at the state and local level. Many states have written tax limits into their constitutions, going as far as requiring a super majority to raise taxes. Those states that are the most conservative, and the most concerned with "states rights", have lower state and local taxes and less local services, with the expected outcome of poor education, low wages, higher rates of infant mortality, and generally poor health. Those states also receive more back from the Federal govt in services than they pay in taxes.

My only guess is that the current opposition to taxes in an extension of the Civil War, the Civil Rights movements, and the Culture War. All things that rural, southern, religious, conservatives lost. Now they just want to starve the apparatus that they see responsible for their humiliation conveniently forgetting how bad things were before.

Colibri
08-06-2011, 12:52 PM
Moving to Great Debates from GQ.

Colibri
General Questions Moderator

Sateryn76
08-06-2011, 01:03 PM
It can't be the whole answer, because schools, roads, and parks are all paid for with taxes, and those are pretty tangible everyday benefits. Perhaps people don't make the connection, but I know I've spent a lot more time on the road and in school than at the doctor's. Everyone in California is complaining about the roads.

Some of my own problem in the US was the confusion between federal and state. My state taxes were much lower than federal taxes, but the state or local authority was the point of contact for most services. In Canada I was astounded that federal and provincial taxes were filed together: you send one cheque, the government divides it appropriately. In the US the state and federal taxes are distinct and separate entities.

ETA: I didn't see John Mace's reply when I wrote this. Interesting.

Sure, I use roads everyday, but they are always full of potholes, including one section on a state road that will literally tear off your suspension, so you have to go over the 10 feet of potholes as if it were a speed bump. Our schools are good in this town (although I paid $400 dollars yesterday to register two kids, and will be required to pay for all of the extra activities and have at least two fundraisers pushed on me) but in 50% of this county, the school are almost warzones. Our parks are okay, I guess, so I'll give you that (even though each one has an entrance fee).

So, in this mish mash of state, Federal and county taxes, it seems that all the things they are doing, they are doing half-assed, if not outright badly.

It is correct that I am loathe to give any taxing agency any more money, since it seems that they are pissing it away on owl vomit studies and other assorted crap. For example, my county just recently went into an multi-year upheaval over property taxes. Now that it has calmed down (and my taxes went up), I read in the paper that our school district has approved spending $53K on sending the administrators to a "teaching retreat". Now, $53K is a lot of bread for this small town, and I'm just thinking that I just paid $400 to register my kids - had that $53K not been spent, might the fees have been $395? And that extra $5 per school family spent here in town would have made a difference as well.

Grumman
08-06-2011, 01:15 PM
Part of the reason is that tax increases are not usually (but not always) tied with some very specific goal. They are usually asked for after the money has already been spent and it is time to try to start digging out of the hole. The only problem is that is basically an admission of bad government, bad budgeting, and poor fiscal discipline. The right way to ask for taxes would be to stay within budget almost all of the time but constrain what is attempted. If a new demand becomes clear like better infrastructure, new taxes could be proposed to pay for those and then that money could also be also carefully managed for what it can realistically accomplish. Taxpayers know it doesn't work that way. A given tax increase could be used for anything including digging us further in a hole. We could easily pay much more in taxes and have nothing to show for it at the end including just as much debt or even more. That is not good and it is one of the biggest reasons don't like to hand the government blank checks.
This is a good answer. It's like someone asking to borrow your car because they just crashed theirs. The reason they're asking for more is the same reason you shouldn't trust them enough to give them more.

Dr. Drake
08-06-2011, 01:38 PM
Because there is no end to it. Votes are purchased with other people's money and eventually people figure out that it's their money.But how is this particular to the USA?

Dr. Drake
08-06-2011, 01:43 PM
Sure, I use roads everyday, but they are always full of potholes, including one section on a state road that will literally tear off your suspension, so you have to go over the 10 feet of potholes as if it were a speed bump. Our schools are good in this town (although I paid $400 dollars yesterday to register two kids, and will be required to pay for all of the extra activities and have at least two fundraisers pushed on me) but in 50% of this county, the school are almost warzones. Our parks are okay, I guess, so I'll give you that (even though each one has an entrance fee).

So, in this mish mash of state, Federal and county taxes, it seems that all the things they are doing, they are doing half-assed, if not outright badly.

It is correct that I am loathe to give any taxing agency any more money, since it seems that they are pissing it away on owl vomit studies and other assorted crap. For example, my county just recently went into an multi-year upheaval over property taxes. Now that it has calmed down (and my taxes went up), I read in the paper that our school district has approved spending $53K on sending the administrators to a "teaching retreat". Now, $53K is a lot of bread for this small town, and I'm just thinking that I just paid $400 to register my kids - had that $53K not been spent, might the fees have been $395? And that extra $5 per school family spent here in town would have made a difference as well.(Now that we're in GD): Help me understand. The half-assed middle clearly isn't working. So in one direction, you pay more taxes and suddenly they have money to fix the roads, incidentally hiring people to do it. In the other direction, you pay less taxes and... you save more money so you can pay for the car repairs you need navigating the third-world roads?

I'm not saying there isn't waste, just that I don't understand how paying less in taxes will solve the pothole problem.

John Mace
08-06-2011, 01:49 PM
I think this is completely wrong. First, there have been cuts at the state and local level. Many states have written tax limits into their constitutions, going as far as requiring a super majority to raise taxes. Those states that are the most conservative, and the most concerned with "states rights", have lower state and local taxes and less local services, with the expected outcome of poor education, low wages, higher rates of infant mortality, and generally poor health. Those states also receive more back from the Federal govt in services than they pay in taxes.

Yes, it does vary by state, but it's easier to get a tax increase at the state level than at the federal level. That can manifest itself as a property tax or sales tax increase. In more liberal states, it's easier to get income tax increases.

But more importantly, at the local level, the easiest tax increase to get (in my experience) is a school bond that ups property taxes. This is not statewide, but can be county or even city/town. They are instituted as a ballot initiative, and where I live I have never seen one voted down.

gonzomax
08-06-2011, 01:55 PM
Because many Americans are simple folk who can be convinced with simple concepts.
We do not pay too much tax. But if they were cut, there would be more money in your pocket. Who does not want that? Keep cutting them and I will have even more money in my pocket. When they are gone, I will be rich. Utopia has been reached.

Ludovic
08-06-2011, 02:06 PM
Because there is no end to it.
At the rate of tax hikes we've had in the past 30 years, pretty soon we won't have any taxes at all.

Magiver
08-06-2011, 02:10 PM
Because many Americans are simple folk who can be convinced with simple concepts.
We do not pay too much tax. But if they were cut, there would be more money in your pocket. Who does not want that? Keep cutting them and I will have even more money in my pocket. When they are gone, I will be rich. Utopia has been reached.or we could give it all to the government and let them dictate how it's spent.

So what's the perfect tax rate? It's a rhetorical question because it doesn't address the real problem and that's spending more than is taken in. If we gave the government 100% they'd spend 110%.

Dr. Drake
08-06-2011, 02:15 PM
Because many Americans are simple folk who can be convinced with simple concepts.So are you saying that Americans are simpler than the folk of other Western countries? Or just that American system gives more weight to the ignorant masses?

Magiver
08-06-2011, 02:16 PM
But how is this particular to the USA?

It's not. Taxes hikes are not loved in other countries. Neither are budgets that increase debt until the bubble bursts.

Sateryn76
08-06-2011, 02:21 PM
(Now that we're in GD): Help me understand. The half-assed middle clearly isn't working. So in one direction, you pay more taxes and suddenly they have money to fix the roads, incidentally hiring people to do it. In the other direction, you pay less taxes and... you save more money so you can pay for the car repairs you need navigating the third-world roads?

I'm not saying there isn't waste, just that I don't understand how paying less in taxes will solve the pothole problem.

Well, first of all, no one is talking about decreasing taxes. They are talking about raising them. This is an important distinction that seems to be left out of these debates.

FWIW, I would support tax increases if I could some feeling that it wouldn't be pissed away on teacher's retreats and owl vomit studies.

It seems to me that if we could get rid of those poor spending habits, we could have nice roads. Instead of me spend more money to the state to get the damn road fixed, they could just use the money I've already sent, by moving it to road repairs and away from the mud mats emblazoned with the state seal.

Lobohan
08-06-2011, 02:33 PM
FWIW, I would support tax increases if I could some feeling that it wouldn't be pissed away on teacher's retreats and owl vomit studies.Please tell me what percentage of the federal budget is spent on teacher's retreats and owl vomit studies.

Magiver
08-06-2011, 02:57 PM
Please tell me what percentage of the federal budget is spent on teacher's retreats and owl vomit studies. It was obviously a rhetorical statement. Are you under the impression that there isn't government waste that could be corrected?

Ludovic
08-06-2011, 03:35 PM
Are you under the impression that there isn't government waste that could be corrected?
Are you under the impression that correcting government waste will eliminate the deficit?

Little Nemo
08-06-2011, 03:40 PM
Part of the reason is that tax increases are not usually (but not always) tied with some very specific goal. They are usually asked for after the money has already been spent and it is time to try to start digging out of the hole. The only problem is that is basically an admission of bad government, bad budgeting, and poor fiscal discipline. The right way to ask for taxes would be to stay within budget almost all of the time but constrain what is attempted. If a new demand becomes clear like better infrastructure, new taxes could be proposed to pay for those and then that money could also be also carefully managed for what it can realistically accomplish. Taxpayers know it doesn't work that way. A given tax increase could be used for anything including digging us further in a hole. We could easily pay much more in taxes and have nothing to show for it at the end including just as much debt or even more. That is not good and it is one of the biggest reasons don't like to hand the government blank checks.I think there's a good point here. Shagnasty and I would probably disagree on what programs are worth the cost. But I fully agree that it's a bad idea to buy now and pay later.

If we were asked to pay the tax at the time we were spending the money, we'd put more thought into whether the program was worth the cost. But we've gotten into the habit (and both parties are guilty of this) of spending borrowed money. We get the program we want now and we will pay for it "someday" - so the costs seem minimal at the time.

But the costs seem so much larger later when it's time to pay them. Who wants to pay for something we've already had? So we grumble and complain about paying our bills ad think it's unfair that we have to pay now for the fun we had in the past.

Sateryn76
08-06-2011, 03:56 PM
Are you under the impression that correcting government waste will eliminate the deficit?

Who said anything about the deficit? We're talking about tax hikes. Stay on topic, please.

gonzomax
08-06-2011, 04:03 PM
So are you saying that Americans are simpler than the folk of other Western countries? Or just that American system gives more weight to the ignorant masses?

Yes we are simpler folk.
When happiness is rated in world industrial countries, the highest ones are the countries who have government run healthcare and solid social safety nets. Living a sickness away from bankruptcy is a bit unsettling.
We are cutting unemployment when we need it the most. We have people who once had middle class homes living in tent cities. One eighth of Americans get food assistance. Most Americans are living in terror of losing their jobs. Unemployment is far over the 9.1 reported. Most of us know people who have lost everything or have relatives who have. Many unemployed Americans have given up looking for jobs . Suicides are up. Foreclosures are up. It is ugly and getting uglier.

Ludovic
08-06-2011, 04:58 PM
Who said anything about the deficit? We're talking about tax hikes. Stay on topic, please.Tax hikes should be supported more than "cutting government waste" because they will be more effective at eliminating the deficit. All this blathering about waste when it is a pretty darn small but not minuscule part of the budget is what people say when they oppose tax increases.

"It'll be just wasted" is a code word for "no tax increases at all!" because just like most people will never think they pay a fair share of tax, most people will never think that there is no government waste to cut. As a matter of fact those opinions are probably linked, because if you don't benefit from a particular government program you're more likely to think it totally useless and therefore a waste of your tax dollars which are therefore too high. But not raising taxes unless 100% of the population thinks all of the government dollars are well-spent is no way to run a nation.

I wonder if those who think that tax increases will always be wasted have come to believe that government was 100% efficient in the late 90s when we were running a surplus. In fact, the canard of "taxes go up, ALWAYS swallowed up by waste!" can be shown to be completely reversed in the late 90s-early 2000s. Taxes went down in the 2000s, followed by a huge increase in expenditures -- a frivolous war and Medicare giveaways -- although whether wasteful or not is up to debate, the reasons to think them so are as justified as many.

So one could point to the late 90s-early 2000s and equally say "hey, I don't want my taxes to go DOWN -- that'll just mean governement will spend MORE!"

Sateryn76
08-06-2011, 05:03 PM
I would support tax hikes if they were dedicated to paying down the deficit exclusively. I think most anti-tax people would as well.

Lobohan
08-06-2011, 05:11 PM
I would support tax hikes if they were dedicated to paying down the deficit exclusively. I think most anti-tax people would as well.Then you should support the revoking of the Bush Tax Cuts. Because there is no way increased spending would get through this congress.

Sateryn76
08-06-2011, 05:15 PM
Then you should support the revoking of the Bush Tax Cuts. Because there is no way increased spending would get through this congress.

I would absolutely support that, along with hikes in capital gains, as long as it's dedicated to paying down the deficit exclusively.

Magiver
08-06-2011, 06:12 PM
Then you should support the revoking of the Bush Tax Cuts. Because there is no way increased spending would get through this congress. I've watched taxes climb in my state and jobs leave the state. So no, I would not support the tax hikes because they chase jobs away. If you want more tax revenue, then keep taxes lower AND legislate to encourage business AND increase the mining of our own oil and natural resources AND reduce the debt so we can spend what we take in instead of using it to pay off past mistakes.

The reason the Tea Party came into being is in the news we see on a daily basis: Greece and other countries on the brink of collapse, our own credit rating falling and and no end in sight for any of it. The bill that was just passed had no short term reductions in debt and left open future reversal of what was a token reduction.

Tax rates are not a linear method of increasing tax revenue. And the tax rate does nothing to address the problem of unbalanced budgets. The solution to unbalanced budgets is to BALANCE them.

gonzomax
08-06-2011, 06:23 PM
I've watched taxes climb in my state and jobs leave the state. So no, I would not support the tax hikes because they chase jobs away. If you want more tax revenue, then keep taxes lower AND legislate to encourage business AND increase the mining of our own oil and natural resources AND reduce the debt so we can spend what we take in instead of using it to pay off past mistakes.

The reason the Tea Party came into being is in the news we see on a daily basis: Greece and other countries on the brink of collapse, our own credit rating falling and and no end in sight for any of it. The bill that was just passed had no short term reductions in debt and left open future reversal of what was a token reduction.

Tax rates are not a linear method of increasing tax revenue. And the tax rate does nothing to address the problem of unbalanced budgets. The solution to unbalanced budgets is to BALANCE them.

Strange. Most states give businesses tax abatements for moving in. That way we middle class people can pay their taxes for them.
Sure, lets balance the budget. that would require raising taxes and closing loopholes. i am for that too. End tax breaks for offshoring work. Stop tax shelters that only benefit the chosen ones. I am glad we can agree on how to fix the problem. We all know cutting will not do the job.

Magiver
08-06-2011, 06:32 PM
Strange. Most states give businesses tax abatements for moving in. That way we middle class people can pay their taxes for them.
Sure, lets balance the budget. that would require raising taxes and closing loopholes. i am for that too. End tax breaks for offshoring work. Stop tax shelters that only benefit the chosen ones. I am glad we can agree on how to fix the problem. We all know cutting will not do the job. tax abatements are short term incentives to lure businesses in. And I don't think it's states, I think it's local municipalities that give abatements.

I disagree that cutting would not do the job. I'd eliminate all income tax on businesses and shift it to payroll taxes.

Wesley Clark
08-06-2011, 06:46 PM
There are a variety of reasons I can think of:

Even though we don't like to admit it, we are a nation with a lot of racial/class divisions. And 'increasing taxes' i usually seen as code for 'taking money away from hard working white people and giving it to blacks and latino immigrants who didn't earn it'. So there is that. In fact, that is a major reason we don't have universal health care. It was considered in the 40s, but southern democrats opposed it since they feared it would lead to integrated hospitals (according to Paul Krugman). You'd be surprised how much issues like 'free public education and health care for mexican immigrants' or 'prisons and welfare for blacks' comes up in anti-tax circles.

Most of us have no idea what we get for our taxes, so it is easy to say it is wasted. Things like public education (which costs over a trillion a year), military, police, etc. fade into the background. Programs like medicare & SS apply when you are older. I recently saw on Bill Maher he quoted a poll that claimed 40% of people on medicare say they do not get any government services. People that old get both medicare and social security. So we've learned to not notice the benefits of the public sector. Even when we get government services in exchange for our taxes, we are so ill informed that we aren't even aware of it.

Maybe we are just 'spoiled'. We've been told we shouldn't have to pay taxes for so long we've come to belive it. If people were constantly telling me I didn't have to pay rent, I'm guessing sooner or later I might believe it to be an unnecessary expense too.

I'm guessing we are more individualistic and less collective here.

FWIW, I think most americans who aren't rabidly partisan are ok with paying higher taxes just as long as the burden is shared and we see something in exchange for the taxes.

Shagnasty
08-06-2011, 07:06 PM
I would support tax hikes if they were dedicated to paying down the deficit exclusively. I think most anti-tax people would as well.

I agree. I would go for that as well and that is the ultimate example of not getting anything for increased taxes other than peace of mind for future stability. I would love to have a special tax that is for nothing but debt reduction and itemized as such. It should have no other benefits associated with it. A lot of us fiscal conservatives really are sincere and always have been even when we have been accused of just being narrow minded or unfair. It really is as simple as managing money well over the long term being the boom or death of a nation.

Ludovic
08-06-2011, 07:24 PM
Tax rates are not a linear method of increasing tax revenue. And the tax rate does nothing to address the problem of unbalanced budgets. The solution to unbalanced budgets is to BALANCE them.
No one said they were linear. In fact not only can they be restrictive at high levels but at low levels they can multiply the economy by enabling effective security, safety, and transportation.

Of course the tax rate addresses balanced budgets. In the past 30 years, taxes go up, deficits go down, it is as simple as that, despite all the counterintuitive handwaving by the ultra tax phobic. This firmly demonstrates that we are not in a revenue-restrictive tax bracket.

When the taxes were slashed in the early 2000s, it was promised that the rich would use their windfall to invest and create jobs. They have their trillions in bankroll: where are the jobs?

Grumman
08-06-2011, 07:45 PM
I would love to have a special tax that is for nothing but debt reduction and itemized as such.
Unfortunately such a thing is impossible, as you could simply create a new expenditure that takes the money out as fast as the tax puts it in.

tumbleddown
08-06-2011, 07:47 PM
It was obviously a rhetorical statement. Are you under the impression that there isn't government waste that could be corrected?
The thing is, what average people consider "waste" translates pretty readily to "whatever doesn't personally benefit me" and "stuff that I dismiss as unimportant because it's outside my understanding" like "owl vomit studies" or we can recall Bobby Jindal's incredulous scoffing at "volcano research" from his SOTU response a couple of years ago. But it's much more difficult to justify that response when the budget it taken as a whole, and the justification process for funding scientific studies, for example, is actually understood.

And of course there's the question of balancing values. There's a not small contingent of people in this country, taxpayers and legislators alike, who believe that any spending on K-12 education is wasteful and would like to see public schools and all public funding of education on any level abolished. There are people who feel that putting any additional money into military action in Iraq/Afghanistan/Pakistan/Libya is wasteful and want to see military spending slashed drastically. Right now, almost the entire freshman class of the House of Representatives believes Medicare is a waste and they're going to move forward with a bill to abolish it and throw seniors to the vagaries of private insurers, even though it won't pass the Senate and would be vetoed if it did.

So whose definition of "waste" holds? We can say that whoever wins elections gets to choose, but the problem with that is that despite holding the position, none of those freshman GOP congresscritters ran on a "Medicare must be abolished" platform, even though many are Tea Party favorites who proclaim, in broad stripes, that all federal spending must be decimated.
I've watched taxes climb in my state and jobs leave the state. So no, I would not support the tax hikes because they chase jobs away.That would be a legitimate position to take if you could actually demonstrate a causal connection between higher state taxes and a loss of jobs, especially if you're talking about job losses during the recent recession, when it was not in any way a localized phenomenon.
If you want more tax revenue, then keep taxes lower AND legislate to encourage business AND increase the mining of our own oil and natural resources
Because more mining will increase tax revenues, how, exactly, when the companies that ultimately profit haven't been paying their fair share for decades? AND reduce the debt so we can spend what we take in instead of using it to pay off past mistakes.
Would you like a pony too? The last time we had a balanced budget and a national surplus and deficit reduction, we had higher taxes. (Which occurred under Bill Clinton, btw.) That's just the long and short of it.

We cut taxes dramatically and revenue fell at a time when we increased spending dramatically and there went the debt and the deficit again, climbing ever upward. Basic reality says that you don't just stop paying your bills, you find a way to increase your income as well. Closing corporate tax loopholes and expiring the Bush tax cuts is the fastest, easiest and fairest means of significantly increasing revenues but the Cult of Grover Norquist has too many of us believing that it's tantamount to mortal sin to do so, with no valid explanation, only a reflexive religious belief.
The reason the Tea Party came into being is in the news we see on a daily basis: Greece and other countries on the brink of collapse, our own credit rating falling and and no end in sight for any of it.
The reason that the Tea Party came into being is because corporate political interests on the Right fomented a fake grassroots movement using a "news" network that traffics in misinformation and outright lies to dupe low-information voters into believing that we were on the verge of actual rather than man-made crisis. The Tea Party is not, never has been, and never will be a popular uprising of people who understand jack crap about fiscal policy, economics or the federal budget. The Tea Party's opinions on these subjects are about as relevant as your average third grader's, but because of the massive amount of money behind this faux movement, they get media play, and hence get a seat at the table. That's it.

When can we get honest and stop pretending that the Tea Party is anything other than Dick Armey and the Koch Brothers using sadly average Americans to do their dirty work?
The bill that was just passed had no short term reductions in debt and left open future reversal of what was a token reduction.
Because the Republicans refuse, as a matter of their Norquistian religion, to allow any discussion of new revenue or a reduction of the single largest aspect of the federal budget, which is defense. When you come to the table and say "we're in debt, but we can't bring in more money and we can't cut back the highest cost item in our budget because... because... because... because we say so!" not only are you not negotiating in good faith, whatever result comes from that negotiation is going to be so hamstrung as to be near ineffective.

And let us be perfectly honest about one other thing. One rating company has lowered the US credit rating for the first time and they were explicitly clear that it was the uncertainty of the GOP manufactured crisis surrounding the debt ceiling issue that led to the downgrade, and that new revenue, beginning with the expiration of Bush era tax cuts is the first step toward gaining our AAA back.

Magiver
08-07-2011, 02:49 AM
The thing is, what average people consider "waste" translates pretty readily to "whatever doesn't personally benefit me"

No, waste is pretty obvious when seen from any angle.


And of course there's the question of balancing values. There's a not small contingent of people in this country, taxpayers and legislators alike, who believe that any spending on K-12 education is wasteful and would like to see public schools and all public funding of education on any level abolished.

Nobody wants public schools to vanish.

There are people who feel that putting any additional money into military action in Iraq/Afghanistan/Pakistan/Libya is wasteful and want to see military spending slashed drastically. Right now, almost the entire freshman class of the House of Representatives believes Medicare is a waste and they're going to move forward with a bill to abolish it and throw seniors to the vagaries of private insurers, even though it won't pass the Senate and would be vetoed if it did.


That would be a legitimate position to take if you could actually demonstrate a causal connection between higher state taxes and a loss of jobs, especially if you're talking about job losses during the recent recession, when it was not in any way a localized phenomenon.

Taxes went up, businesses moved out. Make of it what you will.

Because more mining will increase tax revenues, how, exactly.... taxes from profits.


We cut taxes dramatically and revenue fell at a time when we increased spending dramatically and there went the debt and the deficit again, climbing ever upward. Basic reality says that you don't just stop paying your bills, you find a way to increase your income as well. Closing corporate tax loopholes and expiring the Bush tax cuts is the fastest, easiest and fairest means of significantly increasing revenues but the Cult of Grover Norquist has too many of us believing that it's tantamount to mortal sin to do so, with no valid explanation, only a reflexive religious belief.

Spending increased dramatically. That's the problem. Spending more than taken in. It's really that simple. Don't spend what you don't have. There is non hidden agenda or complicated math involved. If X amount of money comes in then spend .90X and save for a rainy day. Spending more then X automatically reduces the money available next time because the debt is paid first.

The reason that the Tea Party came into being is because corporate political interests on the Right fomented a fake grassroots movement using a "news" network that traffics in misinformation and outright lies to dupe low-information voters into believing that we were on the verge of actual rather than man-made crisis. The Tea Party is not, never has been, and never will be a popular uprising of people who understand jack crap about fiscal policy, economics or the federal budget. The Tea Party's opinions on these subjects are about as relevant as your average third grader's, but because of the massive amount of money behind this faux movement, they get media play, and hence get a seat at the table. That's it.

This is just John Kerry hyperbole. The man can't even pay his own taxes without the public humiliating him into it. moving on.


When can we get honest and stop pretending that the Tea Party is anything other than Dick Armey and the Koch Brothers using sadly average Americans to do their dirty work?

Really? You're demonizing the public for demanding the unpardonable sin of a balanced budget and trying to make this about corporate evilness? Really? Come the next election more heads will roll because of the last vote and the gross incompetence of those in office.


Because the Republicans refuse, as a matter of their Norquistian religion, to allow any discussion of new revenue or a reduction of the single largest aspect of the federal budget, which is defense. When you come to the table and say "we're in debt, but we can't bring in more money and we can't cut back the highest cost item in our budget because... because... because... because we say so!" not only are you not negotiating in good faith, whatever result comes from that negotiation is going to be so hamstrung as to be near ineffective.

And let us be perfectly honest about one other thing. One rating company has lowered the US credit rating for the first time and they were explicitly clear that it was the uncertainty of the GOP manufactured crisis surrounding the debt ceiling issue that led to the downgrade, and that new revenue, beginning with the expiration of Bush era tax cuts is the first step toward gaining our AAA back.yah, everything is just rosy and S&P is evil. You conveniently ignore Moody assigning a negative outlook because the long term fiscal problems have not been addressed. If nothing changes then they will downgrade their rating.

Dr. Drake
08-07-2011, 11:03 AM
Nobody wants public schools to vanish.I don't think that's true.

Two random examples:

A recent article (http://thenewamerican.com/opinion/sam-blumenfeld/7366-should-the-public-schools-be-privatized) on how public schools will lead us to atheism and socialism, and we should do away with them.

Milton Friedman / Cato Institute, 1995 (http://www.cato.org/pubs/briefs/bp-023.html) on how the system needs an overhaul, with vouchers for private schools. (Vouchers do seem to be more common that having the public schools just vanish.)

gonzomax
08-07-2011, 11:06 AM
tax abatements are short term incentives to lure businesses in. And I don't think it's states, I think it's local municipalities that give abatements.

I disagree that cutting would not do the job. I'd eliminate all income tax on businesses and shift it to payroll taxes.

Those are still taxes and the citizens have to support the company's infrastructure.

Shagnasty
08-07-2011, 05:03 PM
Unfortunately such a thing is impossible, as you could simply create a new expenditure that takes the money out as fast as the tax puts it in.

That would be the beauty of it. It wouldn't be a fixed amount. It would be variable like a minimum payment due on a credit card except geared to actually pay it off in a reasonable time. Every time there is a budget overrun, the bill is itemized among all Americans as an additional flat percentage tax and added to tax returns at the end for everyone to see.

gonzomax
08-07-2011, 05:19 PM
Our taxes are at the lowest level in 60 years. Yet some people are still too stupid to figure it out and claim they are too high. You can not convince people who can be trained with slogans instead of information.
Is there government waste?Has there ever been a billion dollar agency that doesn't have some? Is there a corporation that does not have waste? Is there waste in the military contractors?
If you can do something about waste, you should. But claiming waste is the reason the government is bad is just ignorant. but this is America. You say something simple long enough and loud enough, it gets ingrained in our simple little tea bagger minds. Then they run around repeating it like it is some huge revelation.

IdahoMauleMan
08-07-2011, 05:23 PM
Part of the reason is that tax increases are not usually (but not always) tied with some very specific goal. They are usually asked for after the money has already been spent and it is time to try to start digging out of the hole. The only problem is that is basically an admission of bad government, bad budgeting, and poor fiscal discipline. The right way to ask for taxes would be to stay within budget almost all of the time but constrain what is attempted. If a new demand becomes clear like better infrastructure, new taxes could be proposed to pay for those and then that money could also be also carefully managed for what it can realistically accomplish. Taxpayers know it doesn't work that way. A given tax increase could be used for anything including digging us further in a hole. We could easily pay much more in taxes and have nothing to show for it at the end including just as much debt or even more. That is not good and it is one of the biggest reasons don't like to hand the government blank checks.

That's a damn fine post.

gonzomax
08-07-2011, 05:55 PM
That's a damn fine post.

But horribly wrong. We had the deficits under control back in Clinton's time. That was not so long ago.Bush cut taxes and started 2 wars off the books. Then Bush did a drug program that was a huge giveaway to the companies. There is nothing intrinsically bad about the government. we have brought the deficits under control before. if we get the Repubs out of the way, we can do it again. It will not be done by cutting taxes . It will not be done by cutting programs alone. It has to have revenue and eliminating tax loopholes.
But tea bagger slogans will not do a thing.

Shagnasty
08-07-2011, 06:27 PM
But horribly wrong. We had the deficits under control back in Clinton's time. That was not so long ago.Bush cut taxes and started 2 wars off the books. Then Bush did a drug program that was a huge giveaway to the companies. There is nothing intrinsically bad about the government. we have brought the deficits under control before. if we get the Repubs out of the way, we can do it again. It will not be done by cutting taxes . It will not be done by cutting programs alone. It has to have revenue and eliminating tax loopholes.
But tea bagger slogans will not do a thing.

Forget the teabaggers, are you opposed to tying new taxes in the future with specific goals and demanding realistic budgeting? After all the the egghead economic talk dies down, it is still about spending about what you take in and achieving what you stated up front. When the money is gone, we (collectively) have to stop. That is just project management 101 no matter how grand the scale and common sense as well.

fumster
08-08-2011, 01:43 AM
Forget the teabaggers, are you opposed to tying new taxes in the future with specific goals and demanding realistic budgeting? After all the the egghead economic talk dies down, it is still about spending about what you take in and achieving what you stated up front. When the money is gone, we (collectively) have to stop. That is just project management 101 no matter how grand the scale and common sense as well.And just why is it about spending the money we take in and not taking in the money we spend? Budgets have two components: the funding and the expenditures. It is not prudent to always just spend less money. If that were true none of us would buy houses, no new factories would be built, and none of our infrastructure of roads and dams would be in place.

A realistic budget is one which directs funds towards those tasks with the best return. We can look at things like the internet and see the returns from our investments in ARPA/DARPA. Silicon Valley did not spring up just anyplace, it was in a state which saw the need for an excellent public educational system. This, combined with premier private Universities like Stanford that received research grants from the Federal government, and military spending in the aerospace industries created an economic powerhouse that made California by itself one of the largest economies in the world.

Is there waste, fraud, and abuse? I'm sure there is, just as there is in the private sector. I have news for you: liberals are opposed to waste too.

matt_mcl
08-08-2011, 01:58 AM
In Canada I was astounded that federal and provincial taxes were filed together: you send one cheque, the government divides it appropriately. In the US the state and federal taxes are distinct and separate entities.

Irrelevant aside: not in Quebec at least, or at least not for the way I have my taxes set up (not sure if it's different for others). I have to cut separate cheques (when I don't have a nice little tax credit coming my way from one or another level of government).

Are you under the impression that correcting government waste will eliminate the deficit?

Something like this in microcosm is going on in Toronto right now. The mayor was basically elected on a platform of eliminating the mountains of owl vomit studies he was certain were taking place, and thereby eliminating any deficit and being able to lower taxes. Problem is, he's now finding there isn't much in the way of owl vomit left, so he's left demonizing things like libraries and night buses, to which the citizens find themselves stubbornly attached.

In addition to all of the foregoing, we're now in the situation where the dominant budgetary ideology basically says that when times are good, we can afford to cut taxes, and when times are bad, we have to stimulate the economy by cutting taxes. When the response is the same to opposite set of circumstances, something's not right.

gonzomax
08-08-2011, 02:43 PM
Forget the teabaggers, are you opposed to tying new taxes in the future with specific goals and demanding realistic budgeting? After all the the egghead economic talk dies down, it is still about spending about what you take in and achieving what you stated up front. When the money is gone, we (collectively) have to stop. That is just project management 101 no matter how grand the scale and common sense as well.

Corporations are paying half what they did back 40 years ago. The wealthy are paying much less. We have tax loopholes, offshore banking and zillions of ways for the wealthy and corporations to shrink their share of the tax load.
Our problem is lack of revenue.

XT
08-08-2011, 04:45 PM
Corporations are paying half what they did back 40 years ago. The wealthy are paying much less. We have tax loopholes, offshore banking and zillions of ways for the wealthy and corporations to shrink their share of the tax load.
Our problem is lack of revenue.

And yet government revenue is up from 40 years ago...by a large amount in fact. How do you explain how 'Corporations are paying half' and 'The wealthy are paying much less' when total government revenue is actually up. Are you positing that everyone else is paying more, as a percentage of their income than they did 40 years ago? If so, do you have any evidence that this was the case?

I think our problem(s) are more complex than simply saying we have a lack of revenue.

-XT

Sam Stone
08-08-2011, 08:31 PM
If deficits are the result of low taxes, could someone please explain why the Euro zone is awash in debt?

Why is Britain heavily in debt, when its taxes are about 11% of GDP higher than U.S. taxes?

How come Greece is defaulting, when its taxes are about 7% of GDP higher than the U.S.'s?

Italy, which is also in big financial trouble, has taxes almost 15% of GDP higher than the U.S.

Portugal and Spain, also under threat of default, also have much higher taxes - in the same range as Greece's.

Do all those countries have a revenue problem as well?

Here's the problem: Any time the government spends more than it takes in, you can claim it's a revenue problem, or you can claim it's a spending problem. The problem is the gap. The Republicans would argue that Democrats have been saying that deficits were a revenue problem in 1985, when total government revenue was about 32% of GDP. But by 2007 revenue had reached almost 37% of GDP - and there were still deficits.

The Republican argument is this: The government will grow until it consumes all revenue, and until it borrows as much as it can politically or economically get away with. This is a given. Therefore, attempts to correct the fiscal deficit with revenue increases will, in the long run, result in even bigger government and even larger debt. The real problem is out of control spending, and the only check on that spending is the government's ability to consume ever more of society's resources. The only way to stop it is to stop feeding it. And looking at the history of tax increases, they have a point. TEFRA was a 'grand bargain' in which Reagan agreed to tax increases in exchange for a 3:1 ratio of spending cuts to tax increases. Both sides agreed to this because of increasing public pressure over the deficit. So the taxes were implemented immediately, and the spending cuts were 'to be determined'. But once the deficits began to fall because of the tax increases, the political pressure to cut spending vanished, and so did the cuts.

The same thing happened to Bush I, who broke his "Read my lips - No New Taxes!" pledge on a promise from Democrats to cut spending 3:1. Only this time they'd really mean it! The taxes came, the spending cuts didn't.

True spending control didn't happen until the Republicans took back the House and Senate under Clinton. Then they simply refused Clinton's first attempts to grow the government, and then Clinton switched teams and became a born-again small government guy, declaring "The era of big government is over." This combination of fiscal discipline and a roaring economy is what eliminated the deficits in the 1990's.

Have a look at this graph: Federal Spending as a percentage of GDP, 1980-2010 (http://www.usgovernmentspending.com/downchart_gs.php?year=1980_2010&view=1&expand=&units=p&log=linear&fy=fy12&chart=F0-fed&bar=0&stack=1&size=l&title=&state=US&color=c&local=s). You can see the story of the Clinton era - spending declined dramatically compared to GDP. This wasn't primarily because of cuts to government, but because government growth was stopped for 8 years while the economy boomed.

This Chart (http://www.usgovernmentspending.com/downchart_gs.php?year=1980_2010&view=1&expand=&units=d&log=linear&fy=fy12&chart=F0-fed&bar=0&stack=1&size=l&title=&state=US&color=c&local=s) shows spending in constant dollars, corrected for population growth. And it tells the same story - spending rose dramatically between 1980 and 1990, and deficits went up. Then spending was held flat for almost ten years, and the deficits vanished. Then under Bush, and then Obama, spending started going up again, increasing in rate.

Now, if you think there's a revenue problem, look at this chart of federal government revenue over the same period:

Federal revenue as % of GDP, 1980-2010 (http://www.usgovernmentrevenue.com/downchart_gr.php?year=1980_2010&view=1&expand=&units=p&log=linear&fy=fy12&chart=F0-fed&bar=0&stack=1&size=l&title=&state=US&color=c&local=s). Notice that federal revenue peaked at just over 20% during an economic bubble, and while the size of government was held low. That's the absolute highwater mark of federal revenue. Over time federal revenue has averaged about 18.5% of GDP, regardless of tax rates. It fluctuates within a couple of points of that number, generally moving with economic conditions rather than tax rates.

Right now, the federal government is spending about 25% of GDP, and revenues are about 15% of GDP. Without any tax changes at all, you could expect revenues to come back to historical levels of GDP once the economy is relatively healthy. That would still leave a gap of 6.5% of GDP between spending and revenue.

So if revenue was at historical levels, but spending is 7% of GDP higher than it was at the end of the Clinton administration, how can you define this as a revenue problem?

Right now, I think you could argue that revenue might have to be increased. But increasing tax revenue as the country slides into a double-dip recession is a very dangerous thing. And you're not going to get it from the 'rich', since they don't have it. In fact, one of the reasons revenue fell so dramatically in this recession is because the tax system has been increasingly skewed towards depending on the rich, and its' their income that is most susceptible to a downturn (they have lots of capital writeoffs when asset bubbles pop). You'll have to go to the middle class for your taxes, perhaps with a VAT.

But even a VAT will only get you 2 or 3 percentage points of revenue - you're still going to have to cut the size of government twice that amount.

Ludovic
08-08-2011, 10:15 PM
How come Greece is defaulting, when its taxes are about 7% of GDP higher than the U.S.'s?

[...]

Do all those countries have a revenue problem as well?


Greece does. With better enforcement it could raise more revenue and still not squeeze anything out of the economy since the extra revenue would come from the tax evaders.

gonzomax
08-08-2011, 10:57 PM
And yet government revenue is up from 40 years ago...by a large amount in fact. How do you explain how 'Corporations are paying half' and 'The wealthy are paying much less' when total government revenue is actually up. Are you positing that everyone else is paying more, as a percentage of their income than they did 40 years ago? If so, do you have any evidence that this was the case?

I think our problem(s) are more complex than simply saying we have a lack of revenue.

-XT

No they are not. Our tax structure has been slashed. It was not long ago we actually had a balanced budget. You may remember Clinton. You may not. But Bush cut taxes twice, started 2 wars off the books and pushed a huge giveaway to the Pharmacy companies. That is what happened to the budgets.
We could have paid for the wars and we would have trillions less debt. We could have stopped the tax breaks for the rich and we would have trillions less debt.
No XT it is just that simple.

RickJay
08-08-2011, 11:05 PM
It was obviously a rhetorical statement. Are you under the impression that there isn't government waste that could be corrected?
To be honest I am not convinced there is.

Every government - EVERY new politician - promises to get rid of waste, and they never do. The truth is that

A) Much of what you call waste isn't waste, and
B) There's simply a level of actual waste that a government of a given size and structure will create and there's nothing you can do about it.

A famous local case is that of Toronto's new mayor, Rob Ford, who promised to "stop the gravy train." Toronto is a pretty big government - it has a larger population than six of the ten provinces and fifteen of the U.S. states - and has serious deficit problems.

Well, they hired consultants to find the waste. Surprise; there simply isn't anything substantial that could be cut without seriously impacting basic municipal functions. The only way to get rid of the deficit would be to cut things people don't want cut, like firing a bunch of cops (which they could do but God forbid you suggest that) or raising taxes.

If you think cutting waste is easy, take out a budget for any government and give it a shot. It's amazingly hard, really, unless we're talking about a rare case of a municipal government going insane, like Glendale trying to have an NHL team.

XT
08-08-2011, 11:13 PM
No they are not.

Then it should be no problem for you to find a cite showing that government revenue has dropped steadily since the 80's, when taxes went down substantially. Feel free to do so.

Our tax structure has been slashed.

Has it? Well, again, feel free to demonstrate rather than assert.

It was not long ago we actually had a balanced budget.

What's with the change of subject? We were talking about government revenue. Focus here.

You may remember Clinton. You may not.

Well, I voted for him in his second term, so I'm pretty sure I remember him, yes. :p

But Bush cut taxes twice, started 2 wars off the books and pushed a huge giveaway to the Pharmacy companies.

All of which had enough Democratic support to pass. Yes, I seem to vaguely recall...I think it was in the papers. But we were talking about government revenue, remember?

That is what happened to the budgets.

Again, we were speaking of government revenue, not the budget. You claimed that corporations pay half (and if we are talking about federal taxes I'd actually buy this one, at least nominally) and 'the wealthy are paying much less' (presumably less than half...'much' less than half I assume). So, it should be child's play for you to demonstrate that government revenue has gone down substantially, or that everyone who isn't 'wealthy' or a 'corporation' is making up the difference and laboring under crushing taxes. So...feel free to so demonstrate. Please don't give me a drive by link to some article about the budget, or something concerning 'Pharmacy companies'...that's not what we are discussing or what you claimed. I'm not asking for more than a drive by link, since I know it's futile for me to get any sort of effort or analysis from you. All I ask is that you focus on providing some cites (or even A cite) that actually demonstrates what you are claiming. Is that fair enough?

We could have paid for the wars and we would have trillions less debt.

It would have been better if we hadn't had those wars, and I have serious doubts that not having the Bush tax cuts would have cut trillions from the debt, but that's neither here nor there...I'm not asking about those things. I'm asking you to back up your statements.

No XT it is just that simple.

Life is NEVER 'just that simple', gonzo. If it seems that there are simple answers to complex questions, it's almost surly that you are wrong.

-XT

handsomeharry
08-09-2011, 12:13 AM
nm

foolsguinea
08-09-2011, 01:38 AM
But more importantly, at the local level, the easiest tax increase to get (in my experience) is a school bond that ups property taxes. This is not statewide, but can be county or even city/town. They are instituted as a ballot initiative, and where I live I have never seen one voted down.I have, once, if you count a university as a school.When the money is gone, we (collectively) have to stop. That is just project management 101 no matter how grand the scale and common sense as well.No. It is not. Else projects would never go over budget, & all kinds of things, from life-saving surgeries to fixing a motor vehicle to new building construction, would go unfinished far more often than they in reality do.

I'm sorry you think that way, I guess you will be doomed to leave things unfinished; but the successful, in any field, do not think that way. Not surgeons, not architects, not mechanics. Some indifferent civil servant or middle manager might think that way, but anyone who ever did anything worthwhile knows that an estimate is an estimate, & results are results.

treis
08-09-2011, 07:06 PM
It is correct that I am loathe to give any taxing agency any more money, since it seems that they are pissing it away on owl vomit studies and other assorted crap. For example, my county just recently went into an multi-year upheaval over property taxes. Now that it has calmed down (and my taxes went up), I read in the paper that our school district has approved spending $53K on sending the administrators to a "teaching retreat". Now, $53K is a lot of bread for this small town, and I'm just thinking that I just paid $400 to register my kids - had that $53K not been spent, might the fees have been $395? And that extra $5 per school family spent here in town would have made a difference as well.

I don't think "owl vomit studies" aka basic research, is pissing away money. Nor is sending managers to a training retreat outside the norm of practice in private companies.

Realistically, the money we spend on government goes to good purposes. The majority of it is spent on SS, Medicare/caid, interest, and the military.

Sateryn76
08-09-2011, 08:41 PM
I don't think "owl vomit studies" aka basic research, is pissing away money. Nor is sending managers to a training retreat outside the norm of practice in private companies.

Realistically, the money we spend on government goes to good purposes. The majority of it is spent on SS, Medicare/caid, interest, and the military.

Really? You do not think that any of the money spent on government research is wasted on unnecessary studies that can be done more efficiently in the private sector? How about things like the $330K outhouse built in Pennsylvania? Or the story of the Feds who spent hundreds of thousands of dollars debating whether to make it acceptable for people to market "prunes" as "dried plums"? How about the growth of the Dept of Agriculture when compared to the negative growth of the farming industry? Wool subsidies? Federal Flood insurance? Cash for Clunkers?

The difference in spending $53K on the public school and the private sector is that if the private company pisses away money, it goes out of business. (and, before you go there, I would cut their subsidies and bailouts as well). The public school has no accountability for their spending. The schools are a great example of this, actually - we have thrown millions and billions to "fix" schools, and none of it has worked. Schools have gotten worse, and private schools have done far more in bad areas with much less income.

Leaving aside the issues of entitlements and defense (which are the biggest chunks, as you note), you also listed "interest". Does it make sense to you to spend more, when interest is one of our biggest expenditures? On what planet does that make sense?

At what point are any of these politicians become accountable for where we are now? I will not support any tax increases until such time as public servants are held responsible, from both sides of the aisle. We can start with Obama's unfunded social programs, go back through GWB's wars, and on down the list. And then we can come up with a plan to cut waste, shore up what we're keeping, and pay back what we owe. If tax increases are a part of that plan, then I'm fine. But otherwise, I'm done writing a blank check for the government, left or right, local, state or Federal.

Ludovic
08-09-2011, 08:46 PM
(and, before you go there, I would cut their subsidies and bailouts as well).How's that workin' out for ya?

Sateryn76
08-09-2011, 08:47 PM
How's that workin' out for ya?

I don't get it.

Shagnasty
08-09-2011, 09:17 PM
I'm sorry you think that way, I guess you will be doomed to leave things unfinished; but the successful, in any field, do not think that way. Not surgeons, not architects, not mechanics. Some indifferent civil servant or middle manager might think that way, but anyone who ever did anything worthwhile knows that an estimate is an estimate, & results are results.

You are making a number of mistakes here. Very few project management goals are unpredictable based on the wealth of collective knowledge we have and the laws of statistics and large numbers. Good project management takes all that into account and leaves room for error for individual projects but not nearly as much for all of them collectively. In other words, if asked a team of engineers to build one bridge and they told me it would cost $1 million dollars, I wouldn't be surprised if the project ran into obstacles and ended up costing $1.5 million.

If I asked them to build 100 bridges for $100 million and it ended up costing $150 million, then they had a 50% cost overrun and the managers of that project should be fired. You can make a mistake on one project but realistic budgeting goes both ways. Sometimes you go over and sometimes you come in under budget. The way the current system is set up, you rarely see the latter. Excess money gets pissed away to keep budgets intact so most of the deviations are for overruns. That is not acceptable project management methodology. Given a large number of projects, the actual cost versus the final true cost should always be within a few percent. If it is not, something has gone horribly wrong in management.

The Boston Big Dig is an extreme example of that. The original cost was supposed to be $2.8 billion and the final cost is $14.6 billion and still growing. People did get fired over that and one newlywed female got killed because a substandard ceiling tile dropped on her on the way to her honeymoon flight as a direct result of corrupted contracts. You seem like a feeling type person. How does it make you feel when budgeting incompetence kills innocent people?

Forgive me if I call your ignorance on this but you have no idea what you are talking about and probably don't even understand why. To use your examples of surgeons, sure some cases have going to have unforeseen complications and require very expensive interventions to keep the person alive. The flip side of that of that is that some patients will make a remarkable recovery and require less so it all balances out. The actuaries at insurance companies and hospital managers understand all of this so that the difficult cases are offset by the easy to miraculous recoveries using modern statistical tools. The government doesn't work the same way. Underestimating is expected and tolerated because the expectation is that they can always come back for more. That is simply unacceptable.

When we are talking about government as a whole. We aren't talking about one especially problematic patient that bankrupts the insurance company and the hospital. We are talking about not only every patient in a hospital but also every patient in the nation and someone in that field better know with a percentage point or so how much those treatments are going to cost. If the patient gets better on her own overnight, the doctors and nurses can't just take the night off and spend the rest of the budget on pizza and beer. They have to move on to the next one and figure out how to cut costs but not the quality of work to do better next time. The government should be just as accountable to the costs of their work and operate the same way but the don't have many incentives to right now. It could be done because the knowledge is there.

In short, you are looking the potential for cost overruns on individual projects when that isn't an issue in well-managed projects that are grouped together because estimate deviations go both ways and the true costs as whole are easy to calculate. Responsible government would also have an emergency reserve only to be used in times of true emergencies like 9/11. However, the point still stands that when you have budgeted the best that you can and you run out of money in total, the government has to stop, think, reflect, and readjust priorities. In that case we are in a sinking lifeboat and have to concerned with survival as a whole and not looking at the people cast overboard wishing life was more fair.

treis
08-09-2011, 11:12 PM
Really? You do not think that any of the money spent on government research is wasted on unnecessary studies that can be done more efficiently in the private sector? How about things like the $330K outhouse built in Pennsylvania? Or the story of the Feds who spent hundreds of thousands of dollars debating whether to make it acceptable for people to market "prunes" as "dried plums"? How about the growth of the Dept of Agriculture when compared to the negative growth of the farming industry? Wool subsidies? Federal Flood insurance? Cash for Clunkers?

Like the $2000 toilet, I'm guessing most of the things you say aren't quite as they are typically represented. In other words, cite.

Cash for Clunkers and Federal Flood insurance aren't wastes. You might disagree with the wisdom of the programs, but it's not like they are setting piles of money on fire.

As for the dept. of Agriculture. A common theme I've noted in these type of debates is that the people going on about waste don't actually know what the departments they want to cut actually do. The Dept. of Agriculture runs nutrition programs, regulates the nation's food supply, does rural development, manages natural resource, and funds basic research. There is little reason to see a correlation between the growth of the farming industry and the budget of the dept of Agriculture, unless of course, you don't know what the Dept of Agriculture does.



The difference in spending $53K on the public school and the private sector is that if the private company pisses away money, it goes out of business. (and, before you go there, I would cut their subsidies and bailouts as well). The public school has no accountability for their spending. The schools are a great example of this, actually - we have thrown millions and billions to "fix" schools, and none of it has worked. Schools have gotten worse, and private schools have done far more in bad areas with much less income.

Yes, I've heard this rhetoric time and time again. It's one of those things everyone knows, but can't provide any actual proof for. You mention schools, but there's no evidence that private schools are better than public schools. The only thing they are better at is being able to pick their students. In terms of actual effectiveness, I've never seen the proof.


Leaving aside the issues of entitlements and defense (which are the biggest chunks, as you note), you also listed "interest". Does it make sense to you to spend more, when interest is one of our biggest expenditures? On what planet does that make sense?

What makes sense to me is to have a tax level that matches long term spending. I, of course, support having a tax level that will fund spending. That is a separate debate from where government expenditures should be.

Sateryn76
08-10-2011, 12:02 AM
The Outhouse - http://www.theplumber.com/outhouse.html

Quick details on the "dried plum" debacle - http://abcnews.go.com/Health/story?id=117656&page=1. For some reason, prune grower had to apply to rename prunes - and it took several years for the name change to be "approved". Aren't prunes just dried plums? Why the need to administer the name of a fruit?

The Department of Ag runs food stamps and school lunches, true, but puts a big chunk of money toward food and farm subsidies and enact trade restrictions. Also, their subsidies of "rural areas" don't seem to do any actual good most of the time, even outside the issue of whether or not they are appropriate.

So far as schools go, pretty much across the board, I have not seen any evidence that increasing funding has produced better outcomes. If you have some, I'd be happy to see it. Here is an excellent piece on spending versus outcome - http://www.cato.org/pub_display.php?pub_id=12775

I don't know that private schools pick and choose their students - I'm sure they can, but in inner city areas where the public alternative is a crime-ridden hellhole, it is my understanding that they do not. They require the kids to work a little harder, both mentally and by helping out, but they provide a much-needed stability to the neighborhoods. I will concede that the biggest single factor is probably that the parent has to act to get the kid in a private school, which may also indicate an involved parent. Either way, government is not involved in those decisions.

Smitty
08-10-2011, 11:35 AM
Our taxes are at the lowest level in 60 years. Yet some people are still too stupid to figure it out and claim they are too high.

If your herpes outbreak is the lowest it has been in years, do you then conclude that what you need is MORE herpes?

Everyone who yells that taxes are too low is really saying that OTHER people's taxes are too low. Would you personally be willing to pay more? The same amount more, relative to your income, that you advocate others paying?

If not, you are a hypocrite and a thief. You want to forcefully take what belongs to someone else to pay for something you want. If you are willing to do so, then feel free. The IRS will happily accept your donation. Just keep your grubby little paw out of my pocket.

Dr. Drake
08-10-2011, 11:52 AM
If your herpes outbreak is the lowest it has been in years, do you then conclude that what you need is MORE herpes?

Everyone who yells that taxes are too low is really saying that OTHER people's taxes are too low. Would you personally be willing to pay more? The same amount more, relative to your income, that you advocate others paying?

If not, you are a hypocrite and a thief. You want to forcefully take what belongs to someone else to pay for something you want. If you are willing to do so, then feel free. The IRS will happily accept your donation. Just keep your grubby little paw out of my pocket.The thing is, I could give 100% of my income and it still wouldn't pay for anything my community needs. But if we all gave a little more, it could.

Dr. Drake
08-10-2011, 11:55 AM
So far, it seems the best answers to the thread title are:

(1) too much of a disconnect between paying taxes, especially federal, and receiving services, especially local (=the "few benefits from our taxes" argument)

(2) ignorance of what taxes do (=the "too much waste" argument)

Just from reading the news I'd add:

(3) math phobia

and from this thread:

(4) disagreement with policy decisions (=the "unnecessary spending" argument)

#1 is a uniquely American problem because of the size of the country, both area and population; #2 & #3 a reflection on Americans' education (my own grasp of economics is very poor); #4 I'd guess a reflection of the very partisan two-party winner-take-all system and us-vs.-them mentality.

Shodan
08-10-2011, 12:44 PM
#4 I'd guess a reflection of the very partisan two-party winner-take-all system and us-vs.-them mentality. Part of the reason for this is that a progressive tax system leads to an us-vs.-them mentality. The pressure from the bottom half who pay little or on tax to raise taxes on someone else to pay for services for themselves is almost unavoidable.
But if we all gave a little more, it could. It generally isn't "we all", though. Proposals for "we all" be taxed in some form of flat tax get roundly condemned on the SDMB and in liberal circles generally.

The odd thing is that Democrats who are now claiming that the deficit cannot possibly be fixed without tax increases voted to extend the Bush tax cuts back when they controlled Congress and the White House. Back when they had the ability to do what they claimed was necessary, they didn't do it. Now the GOP controls the House, and the Dems have someone to blame, suddenly tax increases are the sine qua non of deficit reduction. Go figure.

Regards,
Shodan

Lobohan
08-10-2011, 01:01 PM
Part of the reason for this is that a progressive tax system leads to an us-vs.-them mentality. The pressure from the bottom half who pay little or on tax to raise taxes on someone else to pay for services for themselves is almost unavoidable. Actually the way it's working in our system now is that the rich use their money to buy congressmen that will do their bidding. You have it exactly backwards.

It generally isn't "we all", though. Proposals for "we all" be taxed in some form of flat tax get roundly condemned on the SDMB and in liberal circles generally. A flat tax is nonsense. It's not a good idea, it's the sort of thing advocated by people who are unable to understand the benefits of a progressive system of taxation. If you don't agree with a progressive system for ideological reasons, that's fine, but don't expect people to choose a system that's strongly regressive and beneficial to the rich because you think it's cool.

The odd thing is that Democrats who are now claiming that the deficit cannot possibly be fixed without tax increases voted to extend the Bush tax cuts back when they controlled Congress and the White House. Back when they had the ability to do what they claimed was necessary, they didn't do it.You appear to not understand the details of what happened.

The Dems never had 60 votes. And because the Republicans had a standing filibuster (something that had never been done before) the Democrats never had control. Would you please admit that you misstated things there? You've made this mistake before, and yet you seem to have trouble retaining that you're wrong.

Remember that the Dems didn't have 60 votes and the Republicans were threatening to cut the unemployment insurance of millions of Americans and ruin an important-to-national-defense treaty. So the Dems were forced to extend the tax cuts, because Republicans were threatening harm to others. Unfortunately, the Dems didn't realize how much lower the Republicans could go.

Now the GOP controls the House, and the Dems have someone to blame, suddenly tax increases are the sine qua non of deficit reduction. Go figure.Nonsense of course. The Dems wanted to remove the cuts before. The Republicans have now so fucked the economy that maybe a few of the saner members will listen to reason.

zynik
08-11-2011, 02:37 PM
I also think that people have been exaggerating the scale of "waste" or socially-unproductive expenses of the federal government.

There is an excellent graphic prepared by Megan McArdle at the Atlantic here, which breaks down expenditures by type:

http://www.theatlantic.com/business/archive/2011/07/getting-specific-on-spending/242240/

You don't have to agree with her politics, but the numbers speak for themselves: more than half of current spending is on pensions, Medicare, Medicaid, Social Security, veteran benefits etc. The remainder is on things like regulation, transport, courts etc.

To target expensive spending by local schools, owl vomit studies, etc. -- that's fine, if they exist. But my guess is that even if they existed, and you eliminated them, you would still be facing pretty much the same deficit problem, because the big ticket items like entitlement still go unreformed.

It's as if you have a crime problem in your city. You can go after the foot soldiers, but as long as you don't target the crime bosses, you can't fix your problem.

gonzomax
08-11-2011, 03:46 PM
There is waste in every human endeavor. No company regardless of size is run perfectly. I worked at Gm and saw so much waste that it boggled the mind. I saw them pay ridiculous prices for office equipment and machinery. But I never saw anything approaching the waste in Iraq and Afghanistan. We are paying contractors to loot us.. There are lots of highly esteemed companies who are glad to do it. Over 9 billion dollars was lost in Iraq and little public outcry followed. We tend to fixate on unimportant and small problems, because it is easier than redoing the entire military procurement system. That should be done. But we fire and jail whistleblowers instead.

Testy
08-12-2011, 12:58 PM
Back to the original question.

I suspect that if you have to ask, you probably won't agree with me, but here goes. I don't want to pay higher taxes and won't vote for anyone who proposes them. I have a firm belief that no entity, including governments, can continue to spend more than their income. Sooner or later that chicken will come home to roost.
Politicians (of every party) have consistently ran for office promising to "clean up Washington" and they might actually mean it but as soon as they are elected they seem to be sucked into the system and wind up contributing to the problem.

To me, the lack of results toward ACTUALLY fixing something implies that our political rulers either:

a) Really DO believe that they can continue to spend money they don't have.

or

b) Figure that they will lose fewer votes if they shut up and kick the problem down the line for future legislators to deal with. After all, being in the Senate or House is a nice job, good pay, good hours, lots of vacation time, power, etc. It's way too good a deal to lose it by talking reality at people.

Either attitude is appalling.

As far as additional taxes to pay down the deficit goes, it's a great idea but I have zero confidence that it would actually happen. Suppose we added a VAT to pay down the deficit. I believe the legislators would simply consider themselves off the hook for any deficit problems and continue on their merry way, spending like a drunken sailor. We'd soon have two deficits, the old one plus an entirely new deficit.

Aside from that, the US Government continues to do things I don't like or agree with so I really don't want to send them any more than the absolute necessity.

I also hate seeing more money dug out of the middle class. The poor can't pay additional taxes, the wealthy can offshore the money, hire more accountants, or simply move. The Middle Class is stuck. Sooner or later this has to stop, why not now?

Regards

Testy

Sateryn76
08-12-2011, 01:09 PM
There is waste in every human endeavor. No company regardless of size is run perfectly. I worked at Gm and saw so much waste that it boggled the mind. I saw them pay ridiculous prices for office equipment and machinery. But I never saw anything approaching the waste in Iraq and Afghanistan. We are paying contractors to loot us.. There are lots of highly esteemed companies who are glad to do it. Over 9 billion dollars was lost in Iraq and little public outcry followed. We tend to fixate on unimportant and small problems, because it is easier than redoing the entire military procurement system. That should be done. But we fire and jail whistleblowers instead.

Fine! Love it! Let's cut all the waste we can, including in the military, and scale back our international conflicts!

But until that's done, and disclosed fully in a public manner, I can't see myself approving of any more tax increases.

As you pointed out, the government is run like a top-heavy corporation, with waste and glad-handing and astoundingly stupid decision making. GM would be out of business today if it weren't for their cronies in the government. How do we fix the government, if they won't even learn from their mistakes, and won't allow big corporations to learn from their mistakes?

Dr. Drake
08-12-2011, 01:14 PM
So assume the government won't change its behavior and you don't get any new taxes... what is the best possible outcome here? The best I can see is hyperinflation as the government prints money to deal with the fact that it can't take in enough dollars to pay the bills. (Since I have tons of student loan debt at a low fixed interest and live abroad, I say bring it on! I can understand why it's a bad idea, though.)

Sateryn76
08-12-2011, 02:13 PM
So assume the government won't change its behavior and you don't get any new taxes... what is the best possible outcome here? The best I can see is hyperinflation as the government prints money to deal with the fact that it can't take in enough dollars to pay the bills. (Since I have tons of student loan debt at a low fixed interest and live abroad, I say bring it on! I can understand why it's a bad idea, though.)

Well, we change the government, and by that I mean we change our leaders. The Tea Party is the forefront of that, and although many think they are Terrorists Holding the World's Economy Hostage, they have tremendous support and are the only ones with the balls to confront the problem at this point.

I don't agree with everything they say, but I recognize that they are at least willing to tackle this head on. There is no more money to spend, even if we jack up taxes on everyone. It has to be brought under control.

gonzomax
08-12-2011, 02:37 PM
If your herpes outbreak is the lowest it has been in years, do you then conclude that what you need is MORE herpes?

Everyone who yells that taxes are too low is really saying that OTHER people's taxes are too low. Would you personally be willing to pay more? The same amount more, relative to your income, that you advocate others paying?

If not, you are a hypocrite and a thief. You want to forcefully take what belongs to someone else to pay for something you want. If you are willing to do so, then feel free. The IRS will happily accept your donation. Just keep your grubby little paw out of my pocket.
No it is not the same. Our tax revenue is too damn low. We have a revenue problem, not a spending problem. You can not ever come close to balancing the budget without added revenue. Sometimes you have to do the math.
Forcibly??? You fill out your tax forms every year. You volunteer.
Anyone saying forcibly has to be a Libertarian or a tea bagger. Neither deserves any respect for debate. They spout slogans and dig in their heels.
The rich paid 90 percent during Ike. Now they evade like crazy and get away with a fraction. Hedge Fund managers pay 15 percent. Buffet pays a smaller percentage than his secretary. he admits it is wrong.
During Ike, corporations kicked in 30 percent of the total tax taken in. It is now at 6. Yes indeed, we have a revenue problem.

Testy
08-12-2011, 08:04 PM
No it is not the same. Our tax revenue is too damn low. We have a revenue problem, not a spending problem. You can not ever come close to balancing the budget without added revenue. Sometimes you have to do the math.
Forcibly??? You fill out your tax forms every year. You volunteer.
Anyone saying forcibly has to be a Libertarian or a tea bagger. Neither deserves any respect for debate. They spout slogans and dig in their heels.
The rich paid 90 percent during Ike. Now they evade like crazy and get away with a fraction. Hedge Fund managers pay 15 percent. Buffet pays a smaller percentage than his secretary. he admits it is wrong.
During Ike, corporations kicked in 30 percent of the total tax taken in. It is now at 6. Yes indeed, we have a revenue problem.

Gonzomax

Well, my question would be: "Where does it end?" How much of my earnings do you need? So far, I haven't seen anyone address that. My concern is that anyone that manages to solve their problems by taxing me more will come around again for a second helping. There seems to be no end to the demands for "just a little more."

Testy

gonzomax
08-13-2011, 09:54 PM
Fine! Love it! Let's cut all the waste we can, including in the military, and scale back our international conflicts!

But until that's done, and disclosed fully in a public manner, I can't see myself approving of any more tax increases.

As you pointed out, the government is run like a top-heavy corporation, with waste and glad-handing and astoundingly stupid decision making. GM would be out of business today if it weren't for their cronies in the government. How do we fix the government, if they won't even learn from their mistakes, and won't allow big corporations to learn from their mistakes?

You are aware that Bush and the Republicans have cut whistleblower protections and fired people who actually tried to clean up military contracts.
Our taxes are way too low . The debt we cry about is equal to the Bush tax cuts and their extensions, 2 wars Bush ran without funding and the gift he gave to Pharma. You want to fix it you have to reverse those policies. Cutting waste is a waste. It needs to be done but will have about zero impact on our financial mess.

Shagnasty
08-13-2011, 11:06 PM
You are aware that Bush and the Republicans have cut whistleblower protections and fired people who actually tried to clean up military contracts.
Our taxes are way too low . The debt we cry about is equal to the Bush tax cuts and their extensions, 2 wars Bush ran without funding and the gift he gave to Pharma. You want to fix it you have to reverse those policies. Cutting waste is a waste. It needs to be done but will have about zero impact on our financial mess.

The point that many us our making is that you can't just say our taxes are too low. How much more money do you need and more importantly, why and what will it be used for very specifically? It has to be broken down for it will actually be used for and then spent for that and only for that. Very few of us are opposed to paying money for concrete goals that are mutually agreed upon in advance. Only the most gullible among us are willing to hand over blank checks and hope that it will do some good somewhere. That is not the way any transaction should work. You wouldn't put up with the same type of logic from a business you hire for anything. Why would you do it for a government that has a very long track-record of using money for purposes other than it was intended?

fumster
08-14-2011, 12:45 AM
The point that many us our making is that you can't just say our taxes are too low. How much more money do you need and more importantly, why and what will it be used for very specifically? It has to be broken down for it will actually be used for and then spent for that and only for that. Very few of us are opposed to paying money for concrete goals that are mutually agreed upon in advance. Only the most gullible among us are willing to hand over blank checks and hope that it will do some good somewhere. That is not the way any transaction should work. You wouldn't put up with the same type of logic from a business you hire for anything. Why would you do it for a government that has a very long track-record of using money for purposes other than it was intended?Here's an idea, we can pay off the debt you conservatives created. Is that concrete enough? Then eventually we may not have to spend so much of our hard earned tax dollars servicing that debt.

gonzomax
08-14-2011, 05:17 PM
The point that many us our making is that you can't just say our taxes are too low. How much more money do you need and more importantly, why and what will it be used for very specifically? It has to be broken down for it will actually be used for and then spent for that and only for that. Very few of us are opposed to paying money for concrete goals that are mutually agreed upon in advance. Only the most gullible among us are willing to hand over blank checks and hope that it will do some good somewhere. That is not the way any transaction should work. You wouldn't put up with the same type of logic from a business you hire for anything. Why would you do it for a government that has a very long track-record of using money for purposes other than it was intended?

It is not just personal income taxes that are too low. Corporate taxes are too low. The BS about 35 percent is a joke. Our corporations average under 10 percent. Many huge corporations do not pay any at all. Yet they are fighting to have them dropped. Some people are for it.
The rich have had their taxes slashed since Reagan. Between tax evasion, tax shelters and off shore bank accounts, they are escaping their responsibilities. Go back to Clinton tax levels for a starter and close the loopholes and shelters.
For regular folks, the tax rate should be jacked up a little until we get our deficits under control.
There is no way that cutting back can fix the problem. It can kill the economy though. Slash medicare and Social Security and watch what it does to jobs and the economy. It would be a disaster. The Repubs are deliberately pushing programs that will hurt the economy and Obama's reelection. It is a horrible policy. Harming the country for political advantage is disgusting.

Shagnasty
08-14-2011, 07:21 PM
It is not just personal income taxes that are too low. Corporate taxes are too low. The BS about 35 percent is a joke. Our corporations average under 10 percent. Many huge corporations do not pay any at all. Yet they are fighting to have them dropped. Some people are for it.
The rich have had their taxes slashed since Reagan. Between tax evasion, tax shelters and off shore bank accounts, they are escaping their responsibilities. Go back to Clinton tax levels for a starter and close the loopholes and shelters.
For regular folks, the tax rate should be jacked up a little until we get our deficits under control.
There is no way that cutting back can fix the problem. It can kill the economy though. Slash medicare and Social Security and watch what it does to jobs and the economy. It would be a disaster. The Repubs are deliberately pushing programs that will hurt the economy and Obama's reelection. It is a horrible policy. Harming the country for political advantage is disgusting.

I think you would have more support than you think among conservatives if there was a special tax just to pay off outstanding debt and not to be touched for any other purpose. Fiscal conservatives like myself have always been genuine about that type of thing despite accusations to contrary. All we want is well managed budget that ensures the long-term health of the nation. Scrap the politics and come up with a plan get the books in much better shape with concrete goals and actual security about how that money can be used. This is accounting 101. I don't want to hear why the U.S. economy isn't the same as running a business because of the complicated economic tools that can be used to manipulate the money supply. Yes it is. If we did it right in the first place, none of that would be a concern,

fumster
08-15-2011, 07:21 AM
All tax revenue goes into a single pool. It is an accounting trick to pretend there could be a dedicated tax that is used for a single purpose. Oh, wait, that only applies to things conservatives oppose.

biddee
08-15-2011, 11:19 AM
Very good article by Warren Buffet in the New York Times today. (http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=1&nl=todaysheadlines&emc=tha212)

gonzomax
08-15-2011, 11:34 AM
Very good article by Warren Buffet in the New York Times today. (http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=1&nl=todaysheadlines&emc=tha212)

Buffet just points out that those at the top have had lots of legislation passed that allows them to pay a smaller share of taxes. He mentions when the tax rate for the rich was higher, way back in 1980 to 2000, the higher rate did not keep anybody from investing .
He says the idea that higher taxes dampens investment is wrong. He believes the rich should pay their fair share and they are not. He mentions investment bankers get away with a 15 percent max., while raking in millions.
Like I said. Our taxes are too damn low.

pinkyvee
08-15-2011, 01:00 PM
This is a good answer. It's like someone asking to borrow your car because they just crashed theirs. The reason they're asking for more is the same reason you shouldn't trust them enough to give them more.

I love this for a variety of reasons.
Reminiscent of a not-to-distant argument we had with our eldest child.
But, but, but ... he REALLY REALLY needed to borrow our car. We were just too stupid or too mean and too selfish to "get" his very reasonable logic as to why we ought to change our minds and turn over our property to him. He was/is very well intended. Besides, his NEED was GREAT, and URGENT.

Raising my taxes? OK. But first, I want a long look at what you spent my money on so far. When a tax is allocated to meet a very specific community need, but once the tax is approved, that money is then siphoned into the general fund (paying for an under-funded previous project) and is no longer available for the specific need .... it pisses people off. If I am told that a new tax is allocated for road repairs, I might think this is a swell idea because the roads are crappy. But, once I discover that a large portion of that tax revenue was used for non road repairs, I am feeling lied to, and no one likes that.
Do this enough times and the distaste for a tax increase (call it a great & urgent need) falls on skeptical eyes/ears. Then, call me stupid and mean and selfish.

Dr. Drake
08-15-2011, 01:17 PM
I know California issues endless bonds for construction projects. Is it possible for the federal government to issue bonds for specific projects? I realize that issuing a bond to pay down debt is tautologically stupid, but perhaps they could issue lower-yield bonds and at least make the debt more manageable? It would be a chance to raise revenue without the objections raised above, anyway.

gonzomax
08-15-2011, 01:30 PM
I love this for a variety of reasons.
Reminiscent of a not-to-distant argument we had with our eldest child.
But, but, but ... he REALLY REALLY needed to borrow our car. We were just too stupid or too mean and too selfish to "get" his very reasonable logic as to why we ought to change our minds and turn over our property to him. He was/is very well intended. Besides, his NEED was GREAT, and URGENT.

Raising my taxes? OK. But first, I want a long look at what you spent my money on so far. When a tax is allocated to meet a very specific community need, but once the tax is approved, that money is then siphoned into the general fund (paying for an under-funded previous project) and is no longer available for the specific need .... it pisses people off. If I am told that a new tax is allocated for road repairs, I might think this is a swell idea because the roads are crappy. But, once I discover that a large portion of that tax revenue was used for non road repairs, I am feeling lied to, and no one likes that.
Do this enough times and the distaste for a tax increase (call it a great & urgent need) falls on skeptical eyes/ears. Then, call me stupid and mean and selfish.

So you are primed to be angry and will find something to be pissed off about. With that mind set, you can never accept any tax because you do not have the ability to track where every tax goes. Therefore it must not be aimed at my pet projects.
Our taxes are at the lowest rate since Ike.

pinkyvee
08-15-2011, 01:39 PM
So you are primed to be angry and will find something to be pissed off about. With that mind set, you can never accept any tax because you do not have the ability to track where every tax goes. Therefore it must not be aimed at my pet projects.
Our taxes are at the lowest rate since Ike.

I'm not angry.

I am elegantly skeptical.

septimus
08-15-2011, 02:30 PM
Fiscal conservatives like myself have always been genuine about that type of thing despite accusations to contrary.

Cite? With specific cuts?

magellan01
08-15-2011, 02:36 PM
It is not just personal income taxes that are too low. Corporate taxes are too low. The BS about 35 percent is a joke. Our corporations average under 10 percent. Many huge corporations do not pay any at all. Yet they are fighting to have them dropped. Some people are for it.

Do you have a cite for your claim? While I'm aware that corporations try, and do, minimize the taxes they pay, I think you overstate the case.

Be that as it may, what percent do you think corporations should pay? Let's say you're happy with a real 35%, how would you handle the fact that other countries have a rate under half that. Did you watch 60 Minutes last night? Look at Switzerland, Ireland, Canada. How would you handle that?

magellan01
08-15-2011, 02:39 PM
Forcibly??? You fill out your tax forms every year. You volunteer.

And what happens if you don't volunteer?

Voyager
08-15-2011, 03:05 PM
Then it should be no problem for you to find a cite showing that government revenue has dropped steadily since the 80's, when taxes went down substantially. Feel free to do so.
-XT

I don't have a chart, but this column (http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/) notes

The Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of G.D.P. this year. The last year in which revenues were lower was 1950, according to the Office of Management and Budget.

he goes on to say

The postwar annual average is about 18.5 percent of G.D.P. Revenues averaged 18.2 percent of G.D.P. during Ronald Reagan’s administration; the lowest percentage during that administration was 17.3 percent of G.D.P. in 1984.

Now, if you are talking absolute dollars and not percent of GDP you should be ashamed of yourself, since that dirty little trick is meant for tea baggers and other such nitwits, and is insulting if tried on Dopers.

Ludovic
08-15-2011, 06:18 PM
Now, if you are talking absolute dollars and not percent of GDP you should be ashamed of yourself, since that dirty little trick is meant for tea baggers and other such nitwits, and is insulting if tried on Dopers.There's also the weasel words of "government revenue", "steadily", and "80s", since the massive SS tax hikes of the 80s temporarily caused an increase in government percentage of revenue at the same time as the income tax revenues as a % of GDP fell. But when people oppose raising taxes they somehow forget to remember that taxes increased in the 80s for many taxpayers rather than decreased.

MattProle
08-16-2011, 09:06 AM
Voyager

What is also interesting from your article is the chart that shows Tax/GDP for members of the OECD. The US is at the bottom of the list (1.8%) while Norway is at the top of the list (12.5%).

Also note that despite this Norway has one of the highest GDP (PPP) per capita in the world.

Norway - $53,269, ranked 3rd

United States - $47,132, ranked 9th

(Numbers from Wiki search on US and Norway)

Damuri Ajashi
08-16-2011, 10:06 AM
I think our problem(s) are more complex than simply saying we have a lack of revenue.

No, but its a big part of it, a part that some people seem to entirely dismiss.

Damuri Ajashi
08-16-2011, 10:14 AM
Do all those countries have a revenue problem as well?

No they have deficit problems and there is only one party in America that thinks that deficit problems can only be addressed from one side of the ledger.

The Republican argument is this: The government will grow until it consumes all revenue, and until it borrows as much as it can politically or economically get away with. This is a given. Therefore, attempts to correct the fiscal deficit with revenue increases will, in the long run, result in even bigger government and even larger debt. The real problem is out of control spending, and the only check on that spending is the government's ability to consume ever more of society's resources. The only way to stop it is to stop feeding it.

Really? Is that what happened under Clinton? Is that what happened under all the Presidents before Reagan?

This combination of fiscal discipline and a roaring economy is what eliminated the deficits in the 1990's.

Yeah right, and the higher revenues had nothing to do with it.

But increasing tax revenue as the country slides into a double-dip recession is a very dangerous thing.

And cutting spending isn't?

There is evidence that tax increases that go into cutting deficits does not hinder economic growth

(they have lots of capital writeoffs when asset bubbles pop).

Explain how that works? How do the rich shelter income with capital losses?

Damuri Ajashi
08-16-2011, 10:26 AM
Then it should be no problem for you to find a cite showing that government revenue has dropped steadily since the 80's, when taxes went down substantially. Feel free to do so.

Taxes went down every time they cut taxes. Its not like cutting taxes freezes economic growth in its tracks or anything. The GDP keep rising and the tax revenue rises along with it.

What's with the change of subject? We were talking about government revenue. Focus here.

We are talking about taxes because of the deficit. If we had a surplus, we wouldn't be talking about increasing taxes.

All of which had enough Democratic support to pass. Yes, I seem to vaguely recall...I think it was in the papers. But we were talking about government revenue, remember?

cite. IIRC they passed the tax cuts on reconciliation so they avoided filibuster (isn't this the reason they had to put in a ten year sunset provision in the tax cuts?).

People can argue about whether the Democrats were actually voting for an invasion of Iraq or just giving Bush leverage. The Democrats will say that the understanding was that Bush would only use the resolution as leverage, the Republicans will say otherwise.

It would have been better if we hadn't had those wars, and I have serious doubts that not having the Bush tax cuts would have cut trillions from the debt, but that's neither here nor there...I'm not asking about those things. I'm asking you to back up your statements.

http://www.whitehouse.gov/infographics/us-national-debt

Life is NEVER 'just that simple', gonzo. If it seems that there are simple answers to complex questions, it's almost surly that you are wrong.

And yet the Republican answer to most of this countries problems will fit onto a postage stamp.

Damuri Ajashi
08-16-2011, 10:35 AM
Buffet just points out that those at the top have had lots of legislation passed that allows them to pay a smaller share of taxes. He mentions when the tax rate for the rich was higher, way back in 1980 to 2000, the higher rate did not keep anybody from investing .
He says the idea that higher taxes dampens investment is wrong. He believes the rich should pay their fair share and they are not. He mentions investment bankers get away with a 15 percent max., while raking in millions.
Like I said. Our taxes are too damn low.

He ALSO points out that we face entitlements that all the money on the Forbes 500 couldn't pay for. We need entitlement reform (well we need medicare/medicaid reform) as well as higher taxes.

septimus
08-16-2011, 11:53 AM
Fiscal conservatives like myself [who oppose government spending] have always been genuine .... All we want is well managed budget that ensures the long-term health of the nation. Scrap the politics and come up with a plan get the books in much better shape ...

Cite? With specific cuts?

What? No response from Shagnasty ? I guess the deficit-ending cuts all come from the obvious candidates: Waste and Funding for NPR.

Some cynics claim that "fiscal conservatives" are people whose political thought is "Tax cuts is good, its a no-braner," but who want to pretend to be erudite. I see little evidence to the contrary even here at SDMB.

Shagnasty
08-16-2011, 02:02 PM
What? No response from Shagnasty ? I guess the deficit-ending cuts all come from the obvious candidates: Waste and Funding for NPR.

Some cynics claim that "fiscal conservatives" are people whose political thought is "Tax cuts is good, its a no-braner," but who want to pretend to be erudite. I see little evidence to the contrary even here at SDMB.

Don't put words in my my mouth. I am not one to call for things like NPR cuts because that won't save any significant amount of money. We need deep, deep cuts not token gestures. One target is the U.S. military and the current wars. We need to start pulling of of both and and just let the regions collapse into Civil War or whatever is going to happen. Social Security and Medicare are next and they are harder. We have to start phasing out benefits in the long-term for people base on age. You can't really take from the people who are already retired based on the expected payouts so the cuts will have to start with those 50 and younger and be deeper the younger you are. You pay the same amount into the system. You expected payment goes way down if you are young. Isn't this fun? A new system will be put into place for younger people that is self-sustaining indefinitely but much more conservative in its payments versus contributions. '

I would also target a 10 - 15% budget cut across all departments and programs that aren't impacted by any of the ones that are more severe. This is to save money but also make sure that everyone takes some punishment and to force some creative efficiency out of the systems. Most budgets have 10 - 15% of fat or inefficiencies in them that can be worked around with minimal impact by resourceful bureaucrats. If they can't, oh well.

septimus
08-16-2011, 03:43 PM
Don't put words in my my mouth. I am not one to call for things like NPR cuts because that won't save any significant amount of money. We need deep, deep cuts not token gestures. One target is the U.S. military and the current wars. We need to start pulling of of both and and just let the regions collapse into Civil War or whatever is going to happen. Social Security and Medicare are next and they are harder....

I would also target a 10 - 15% budget cut across all departments and programs that aren't impacted by any of the ones that are more severe. This is to save money but also make sure that everyone takes some punishment and to force some creative efficiency out of the systems. Most budgets have 10 - 15% of fat or inefficiencies in them that can be worked around with minimal impact by resourceful bureaucrats. If they can't, oh well.

I argued against the Trillion Dollar Mistake in Iraq 9 years ago before it was known by that name, so you won't get an argument with me there. Soc Sec and Medicare are separately financed so, whether misfinanced or not, seem irrelevant here. Let's focus on "10 - 15% budget cut across all departments and programs." Another recent thread discusses EPA. Is this one you'd cut more than 10-15% or less? Do you honestly think it would do as good a job as now with 10-15% less funding? I don't want to put words in your mouth but your "If they can't, oh well" makes me wonder if your response to poorer performance would be "Serves them right!"

Webpages recently linked to many times on this board show that the present deficit is due to lower taxes rather than increased spending, yet your reason for opposing tax increases seems to be the "10 - 15% of fat or inefficiencies".

If, after cutting spending by 10-15%, programs were 10-15% less effective than they are now, would you then argue that they were still wasting 10-15% and ask for a further 10-15% cut?

Shagnasty
08-16-2011, 04:07 PM
If, after cutting spending by 10-15%, programs were 10-15% less effective than they are now, would you then argue that they were still wasting 10-15% and ask for a further 10-15% cut?

Maybe but the overall problem isn't about effectiveness or waste. It is about raw dollars saved and not a value judgment. The assumption is that most programs could be made 10 - 15% more efficient through efficiency and savings gains that they can come up with for themselves if they have to. If they can't and become less effective, that still isn't a primary concern except for a few select programs that are true issues of public safety and massive risk in the worst case if there is a failure such as nuclear compliance programs.The first order of business is to get expenditures back in direct line with revenue mainly as a math problem and not some sweeping political statement. After that is achieved, the available pool of money to fight over will be smaller but there will still be room for arguments over the remaining more healthy sized pool that won't bankrupt the nation no matter how it is spent as long as it doesn't grow.

There is an old proverb that sums up the situation. A man that makes $100 a week and spends $99 lives a happy and prosperous life. A man that makes $100 a week and spends $101 dies penniless and miserable.

It is a small difference but it is all the difference in the world between long-term success and failure. We as a nation have to become the $99 man no matter what it takes.

Maeglin
08-16-2011, 04:25 PM
Voyager

What is also interesting from your article is the chart that shows Tax/GDP for members of the OECD. The US is at the bottom of the list (1.8%) while Norway is at the top of the list (12.5%).

Also note that despite this Norway has one of the highest GDP (PPP) per capita in the world.

Norway - $53,269, ranked 3rd

United States - $47,132, ranked 9th

(Numbers from Wiki search on US and Norway)

Norway is also a gigantic oil exporter. That accounts for a good 20% or so of GDP. Nevertheless, it is an incredibly interesting place economically. This (http://www.nytimes.com/2009/05/14/business/global/14frugal.html) is a particularly neat read.

septimus
08-16-2011, 05:16 PM
There is an old proverb that sums up the situation. A man that makes $100 a week and spends $99 lives a happy and prosperous life. A man that makes $100 a week and spends $101 dies penniless and miserable.

What you say would make some sense except for one simple fact you continually ignore.

The U.S.A. did rather well for many decades with a given level of taxes and a similar level of spending. Spending is about the same as before. It's the taxes that have gone down.

Sam Stone
08-16-2011, 05:42 PM
Spending is about the same as before? Current U.S. spending is about 5 or 6 percent of GDP higher than its historical average. Current taxes, on the other hand, are about 2 to 3 percent of GDP lower than their historical average.

Furthermore, the revenue loss is mostly due to the recession - in 2007, revenue was 3-4% of GDP higher than it is now. Spending, on the other hand, is only partly due to the recession. So when/if the economy recovers, you can expect revenues to return to somewhere close to their historical average, but spending will still be much higher than the average.

More importantly, the trend on the horizon that's going to cause the government's budget to explode is not that there's a trend towards lower revenues, but a trend towards higher expenditures. This is due to the rising cost of debt service and entitlement plans that are unfunded and which will break the bank.

So it's not revenue that's the real problem, it's spending. In fact, you can't possibly raise enough revenue to cover the spending unless you go to a VAT and start raising taxes on the middle class. The wealthy don't have the money you need. So unless you're willing to go there, you MUST cut spending. Furthermore, no matter what you do to all other government and spending, the budget will still implode unless you get entitlement costs under control.

magellan01
08-16-2011, 05:49 PM
Hey, gonzomax, could you please answer the questions from posts 103 and 104? Thanks.

septimus
08-16-2011, 06:19 PM
There's one 'fiscal conservative" on this board who actually has more than a high-school understanding of economics. Unfortunately his posts are chock-full of exagerations, misconceptions, distortions, and selective data.

DISTORTION:
Spending is about the same as before? Current U.S. spending is about 5 or 6 percent of GDP higher than its historical average. Current taxes, on the other hand, are about 2 to 3 percent of GDP lower than their historical average.

FACT: From O.M.B. historic data (http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf), On-budget receipts and outlays as percentage of GDP for representative years:

1965 14.6 14.8
1983 13.2 19.2
1998 15.1 15.4
2004 11.5 16.4
2009 10.3 21.3

1965 and 1998 are examples of similar, nearly balanced budgets. High spending in 2009 was due in large measure to TARP. To examine these numbers and conclude that low taxes are not a major blame is to exhibit confusion.

DISTORTION:
This is due to the rising cost of debt service...

Uh, yeah. Underfunding leads to deficits which lead to debt service costs. But to then conclude that underfunding is somehow good shows, again, confusion.

The wealthy don't have the money you need.

Here we go again. :smack: If taxing the rich isn't the silver bullet that solves all problems instantaneously, then don't tax the rich at all. :smack: This is your cue to do as you did last time we met in a thread, and now throw out an incorrect exaggerated statistic, then accuse me of "nitpicking" about "chump change" if I bother to correct you. :D

Bosstone
08-16-2011, 06:23 PM
The wealthy don't have the money you need.I picture you waving your hand like Obi-Wan here.

Voyager
08-16-2011, 09:04 PM
Social Security and Medicare are next and they are harder. We have to start phasing out benefits in the long-term for people base on age. You can't really take from the people who are already retired based on the expected payouts so the cuts will have to start with those 50 and younger and be deeper the younger you are. You pay the same amount into the system. You expected payment goes way down if you are young. Isn't this fun? A new system will be put into place for younger people that is self-sustaining indefinitely but much more conservative in its payments versus contributions. '


How would cutting Social Security now influence the actual deficit in any way? We do need reform, in terms of higher caps and perhaps a change in payments per retirement year, but as of now changing it would just change who owns the debt.

Medicare is a different story. Cutting the subsidies to private suppliers is a good start. But otherwise you have three choices
1. Throw old people depending on it off the boat.
2. Raise Medicare taxes a lot
3. Make healthcare more efficient

3) seems like the best choice of these. How do we do it? Maybe by copying best practices for health care spending from other countries.

I don't know why this has been so unacceptable.

Bosstrain
08-16-2011, 10:07 PM
If by Americans you mean the United States of America (America implies both North and South continents BTW) then here's my .02:

First, the British buggers tried taxing, and look what happened to them, bad mistake, shouldn't have pushed for it. For a while there wasn't much of a problem, only businesses would pay tax, and not much at that, then WWII happened, and suddenly a 'temporary' tax was place on individuals, it was just to help pay for the expensive war. However, a lot of time passed, the bureaucrats fatened their wallets a bit after everything was paid off, then came time to lift the 'temporary tax'. HA, like that was gonna' happen, everybody had pretty much forgotten the temporary part of it, and the government wasn't about to remind them. Today, you get taxed coming in and going out, and businesses are taking bigger hits every time they turn around. Sure, it's fine for big companies to get the shit taxed out of them, but what about the 'mom and pop' stores. My dad used to talk about how he and his patner feel like the government is a third invisible partner that no one can see, does nothing, and takes a huge chunk of the profits, like an extortionist. Now it's closer to half the profits, and my family as a whole is struggling every day just to make ends meet.

Dr. Drake
08-16-2011, 10:35 PM
If by Americans you mean the United States of America (America implies both North and South continents BTW)...I do indeed mean the people of the USA. I must say I am quite shocked to realize that there are, indeed, other countries in the Americas. I'm glad we got that cleared up so quickly; wouldn't want any confusion.



(You do know I'm posting from Canada, right?)

Sam Stone
08-16-2011, 10:53 PM
There's one 'fiscal conservative" on this board who actually has more than a high-school understanding of economics. Unfortunately his posts are chock-full of exagerations, misconceptions, distortions, and selective data.

DISTORTION:


FACT: From O.M.B. historic data (http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf), On-budget receipts and outlays as percentage of GDP for representative years:

1965 14.6 14.8
1983 13.2 19.2
1998 15.1 15.4
2004 11.5 16.4
2009 10.3 21.3

1965 and 1998 are examples of similar, nearly balanced budgets. High spending in 2009 was due in large measure to TARP. To examine these numbers and conclude that low taxes are not a major blame is to exhibit confusion.


I'm using the data from here: US Government Spending (http://www.usgovernmentspending.com/downchart_gs.php?year=1950_2016&view=1&expand=&units=p&log=linear&fy=fy12&chart=F0-fed&bar=1&stack=1&size=l&title=&state=US&color=c&local=s). The numbers are not the same as yours. It has 2009 spending at 25% of GDP, a slight decline in 2010 (2009 larger because of TARP, I imagine), and 2011 at slightly more than 25%. This corresponds with figures I've seen for 2011 of 25.3%.

Calculating average government spending will obviously require that you pick some arbitrary start date. But if you just eyeball the chart you can pick your own period and see what the average has been. If we start from 1950, the average looks to me to be just under 20%. Paul Ryan's budget quotes a modern-day average of 18%. I've seen Democrats use numbers closer to 20%. I picked a number right in the middle, which I think was fair.

As for revenue, the historical average is between 18.5% and 19.5%, depending on where you start your years. It's currently right around 15%. (Actually, the number I used above was 16% because I had recently read that, but we'll use these numbers as a fair comparison).

Therefore... There is about a 10% of GDP gap between revenue and spending. According to these numbers, revenue is down 3.5% to 4.5% of GDP, while spending is up by 5.3% to 7.3% of GDP. Those numbers are a little closer than ones I posted, which came from slightly different sources, but the conclusion is still the same - spending has gone up by more than revenue has come down.

My other point is still completely valid - you can expect revenue to come back on its own if the economy recovers, but only a small portion of spending (unemployment benefits, etc) will be recovered.

The larger point is that looking at the situation today doesn't give you the full picture. For one thing, spending is going up because of the new health care plan, by over a trillion dollars in seven years. For another, the entitlement system starts to really take off and grow out of control after 2020. All of the pressure on the budget comes from the spending side - no one is talking about cutting revenue further, or if they are they're idiots.

DISTORTION:
Uh, yeah. Underfunding leads to deficits which lead to debt service costs. But to then conclude that underfunding is somehow good shows, again, confusion.


Yes, so spending continues to increase, as I said. It's not a matter of avoiding that extra debt servicing cost - no one thinks the deficit in the U.S. is going to be brought under control any time soon under any plan, including Paul Ryan's. So spending will continue to get worse.

This matters because it is very hard to raise revenue once you get past 20-25% of GDP. You certainly can't do it on the backs of the rich. Remember we're talking about just federal spending here - the states take their own tax bites, and have their own fiscal calamities to deal with. An extra 5% of GDP going to the federal government means less taxable revenue for the states.

if you take a close look at that revenue chart, you'll see that it's remarkably stable.

This is an interesting chart: Total revenue, individual and corporate taxes, 1950-2010 (http://www.usgovernmentrevenue.com/downchart_gr.php?year=1970_2010&view=1&expand=&units=p&log=linear&fy=fy11&chart=F0-fed_11-fed_12-fed&bar=1&stack=0&size=l&title=US%20Federal%20Revenue%20Chart&state=US&color=c&local=s). The blue line is total revenue, the green line is corporate taxes, and the red line is individual income taxes.

First, note that corporate taxes came down steadily from 1950 until 1970, at which point they fluctuated with the business cycle - down in recessions, up in booms. I don't see any other 'signal' in there that reflects changes to corporate tax breaks, loopholes, etc. In fact, it looks like corporate taxes in 2007-2008 were at the highest level they've been since 1979.

Now look at individual income taxes, which are even more interesting, because the income rate has fluctuated dramatically over those years - from a high top marginal rate of 90% to a low top marginal rate of 28%. And yet, the amount of taxes collected hardly moves with those changes - instead, it seems to fluctuate mostly with the business cycle. The four big 'dips' in the income tax come in 1972, 1983, 2001, and 2009. All four of those dates mark the start of the four largest recessions in that era.

In contrast, here's a chart showing a history of the top marginal tax rates over the same era: Top Marginal Rates, 1910-2010 (http://en.wikipedia.org/wiki/File:MarginalIncomeTax.svg). Does the chart from 1950-2010 look much like the revenue chart? Nope. Note that the lowest top rate since 1950 occurred between 1985 and 1990 - but income tax revenues went UP slightly in that period. Top marginal rates went up steadily from that point to about 40%, but tax revenues actually declined over the first half of that period, then they took off. Why did they take off? Because the tech bubble happened, and revenues went through the roof.

The point I'm making here is that you can't expect to get massive increases in revenues by jiggering around with the tax rates of the major taxes that are already being collected. Certainly not the individual income tax, anyway. The corporate tax averaged 2-3% of GDP higher in the 1950's, so maybe there's a bit of room there. But if you think you're going to solve the deficit by going back to 'Clinton-era tax rates', there's no evidence that that's the case. Clinton's shrinking defict was not due to higher tax rates, but due to a rapidly growing economy and a rapidly shrinking government as a percentage of GDP. Government didn't grow at all in the Clinton era, while the economy boomed. THAT is what got the deficit under control.

This is why I said that if you think you can come anywhere near to a balanced budget by raising taxes on the rich, you're crazy. If the tax revenue didn't change when the rate went from a high of 90% to a low of 20%, tweaking the top rate by a few percentage points won't do bupkis in the long run.

No, if you want to do it with revenues, you're going to need a NEW tax. Looking at other countries around the world that have managed to tax their citizens more, every single one of them has some form of national sales tax and generally higher excise taxes. That's where you're going to have to go, but that means taxing everyone - the poor, the middle class, and the rich. It means giving up your vaunted progressivity in favor of bulk. If you want to raise more money, you have to go at large swaths of the population and trim a bit off them.

I'm not being misleading here. I'm providing all the data so you can look at it yourself.

Here we go again. :smack: If taxing the rich isn't the silver bullet that solves all problems instantaneously, then don't tax the rich at all. :smack:

Speaking of being deceiving - I never said anything about not taxing the rich at all. I just said that they aren't going to solve your problem. I find it maddening when people point out that serious budget cuts are needed, and Democrats respond with, "How about we just make the rich pay their fair share?" Then when you point out that the rich don't have enough money for that to work, the response is, "Hey, but at least it's something, right? It's better than not taxing them at all, like you're suggesting."

In other words, it's a smokescreen. Tax the rich or not, it's not going to change the budget deficit by more than a rounding error. Even the Obama administration, using as favorable a set of numbers they can find, admits that repealing the Bush tax cuts on the rich only will only result in revenue gains of 70-90 billion per year. That's somewhere between 5 and 8% of the deficit. It doesn't even begin to cover the gap. In fact, it's a number smaller than the difference in revenue that will ensue if annual GDP growth is off by maybe a couple of tenths of a percent from the forecasted GDP numbers. It's little more than noise.

As a political matter, I think you probably will have to raise taxes on the rich if you want to seriously raise revenue. Not because they've got the money you need, but because you'll have to raise taxes on the poor and middle class as well, and the only way to make that palatable is to make everyone share the pain. So I'm not against hiking taxes on the rich - I just want to be clear that it doesn't change the fact that the U.S. needs to make deep, deep cuts in its spending. Hell, you're borrowing 40% of every dollar you spend right now. That's insane.

This is your cue to do as you did last time we met in a thread, and now throw out an incorrect exaggerated statistic, then accuse me of "nitpicking" about "chump change" if I bother to correct you. :D

No, this was your cue to end an otherwise on-point message with a gratuitous and inappropriate personal attack.

Bosstrain
08-17-2011, 12:20 AM
I do indeed mean the people of the USA. I must say I am quite shocked to realize that there are, indeed, other countries in the Americas. I'm glad we got that cleared up so quickly; wouldn't want any confusion.



(You do know I'm posting from Canada, right?)

No, I did not realize that you're Canadian, my apologies, I should have checked. However, this raises an even greater concern, If you're referring to the USA as America, and on an American continent, are you not offended that citizens of the USA call themselves Americans and expect that one would automatically assume the US in the Americas? I live in the country just South of yours (USA :D), and I'm offended that my own countrymen would be so bold and cocky. Now I see that this infection has spread to other countries on the same continent......I do apologize that this has happened, but alas, there is nothing I can do to fix the issue. We even refer to it as the US, but there are other United States on the planet besides ours. I feel that the way to identify it properly is to use all the appropriate identifiers: United States of America.......

Now, to keep this thread from being hijacked, I will now refrain from discussing this further. If you would like to (or anyone else), then another thread can be opened and I would gladly give my opinions on said thread. :)

septimus
08-17-2011, 04:32 AM
Tax the rich or not, it's not going to change the budget deficit by more than a rounding error.

I skim posts before I bother studying them, and when I saw this I realized your spiel was just more of the usual Stone.

I want to be respectful but before I bother with you I'd like you to clarify the magnitude of this "rounding error."

We don't need an exact number. Just help us to the ballpark and estimate this "rounding error" over the next decade to the nearest multiple of a trillion dollars.

Sam Stone
08-17-2011, 06:40 AM
I skim posts before I bother studying them, and when I saw this I realized your spiel was just more of the usual Stone.

Why don't you can the personal commentary? Is it impossible for you to ask questions politely?

I want to be respectful

Too late.

but before I bother with you I'd like you to clarify the magnitude of this "rounding error."

Sure thing. Tell you what: let me cite the Center for American Progress (http://www.americanprogress.org/issues/2010/07/let_cuts_expire.html), which I hope you will agree is not exactly biased towards my point of view. According to them:

Virtually everyone in Congress agrees with the Obama administration that we should make permanent all of the reduced taxes for those who make less than $250,000—that’s 98 percent of Americans. The disagreement is limited to those cuts that affect the richest 2 percent of Americans—with conservatives demanding that the wealthiest Americans continue to benefit from the Bush administration’s largess.

Okay, so let's set the parameters. We're talking about letting the Bush tax cuts expire on everyone making $250,000 or more - the top 2% of Americans. The administration and 'virtually everyone in Congress' agree that the people earning less than $250,000 not have their taxes raised.

According to that article, this will save about $690 billion over ten years. Add in interest, and you get to about $830 billion.

Over that same period, the CBO (http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf) predicts that the debt will go up by about 8.5 trillion dollars. But that estimate, less than a year old, is already wrong. For example, it predicted a deficit of 1.48 trillion this year, and it's now tracking closer to 1.7 trillion. That's a difference of 220 billion dollars in an estimate only a few months old, and that's more than 1/4 of the entire revenue from raising taxes on the rich. But it gets worse, because the CBO predicted GDP growth of 3.1% this year, and so far the first two quarters came in at annualized rates of 0.4% and 1.3%, meaning the deficit numbers are going higher. The estimate for next year's deficit is 1.1 trillion, and that already looks wrong. The CBO was predicting growth of 2.8% in 2012, but now it's looking more like another recession. If that happens, the error in the CBO's estimates for just this year and next will likely be about as big as all the revenue raised from expiring the Bush tax cuts on the rich.

But even given the CBO's numbers, the bush tax cut is about 10% of the projected increase in the debt, leaving you to find 90% somewhere else.

And then after 2021 it starts to get really ugly, because the baby boom leaves the workforce en masse and turns from being revenue generators to revenue consumers. The result of that is pretty bad. Look at this chart: Debt_to_GDP_Forecast_Chart (http://en.wikipedia.org/wiki/File:Debt_to_GDP_Forecast_Chart.png) I would like to point out that the chart was written before the recession, and before Obama added a new trillion dollar health entitlement. The curve has been shifted forward by over a decade.

With those kinds of numbers, the added revenue from new taxes on the rich doesn't really change the picture at all.

We don't need an exact number. Just help us to the ballpark and estimate this "rounding error" over the next decade to the nearest multiple of a trillion dollars.

Conclusion: The taxes on the rich Obama wants will lower the growth in the debt over 10 years by less than 10% in the best-case scenario, much less in the worst-case scenario, and after that when the unfunded liabilities from Medicare and SS appear, the revenue from the Bush tax cut drops into trivial territory compared to the magnitude of the liability outstanding.

So if you want to avoid increasing the debt over the next ten years, you can cut spending by about a trillion per year, or you can implement Obama's plan for raising taxes on the rich - and then cut spending by 931 billion per year. Unless growth estimates are off by a few tenths of a percentage point, in which case you'll be cutting that trillion anyway.

Dr. Drake
08-17-2011, 12:26 PM
CBC reports Obama is planning tax cuts. (http://www.cbc.ca/news/world/story/2011/08/17/obama-economy.html?ref=rss) Really, Obama? Now, admittedly we'll have to wait a few weeks for the details, but I'm more than a little surprised.

suranyi
08-17-2011, 01:31 PM
If by Americans you mean the United States of America (America implies both North and South continents BTW) then here's my .02:



Good grief, not this again.

In the English language, the word "American" means someone who lives in the country called "The United States of America." It may not be logical, but that's the way it is. Language is not logic. If someone told you he was an American, would you really think he might be a Canadian or a Brazilian?

suranyi
08-17-2011, 01:33 PM
As for the OP, it's not just Americans. The problems in Greece, Italy, and Spain largely stem from their people's extreme reluctance to pay taxes, so much that tax evasion is commonplace.

septimus
08-17-2011, 01:57 PM
Sam, I respectfully urge you to be more considerate when you post numbers in these threads.

For example, suppose there is a straightforward question to which the straightforward answer is "about a trillion dollars." Which of the following answers do you find best?

A. "About a trillion dollars."


B. [2-paragraph discussion with the answer buried, and the same subjective description of the answer as has been given several times in the past.]


C. "A rounding error."

I've listed the three possibilities in decreasing order of my preference. (The long discussion would be fine if it were responsive, but not just to repeat an obvious and repetitious argument.) If "rounding error" somehow has come to mean "about a trillion dollars" in modern American parlance, then I apologize. It's a new idiom for me.

Let me also offer my way of presenting numbers of which I'm not sure. Suppose I think a number is 7%, that a smaller number would improve the case I'm making, but I'm too lazy to Google for a correct number. I might write "less than 7.5%" or some such. What I won't do is write "5%", and hope no one checks the number. And I certainly won't accuse them of "nitpicking" if they do.

I sincerely hope I'm being respectful. I'll plead guilty to being easily annoyed. In fact (and maybe my low-wealth upbringing is showing) I'll admit I get annoyed just when someone refers to "about a trillion dollars" as "a rounding error." The Trillion-Dollar Mistake in Iraq? Hey -- that's just a rounding error! If one of the "fiscal conservatives" complains about a few billion dollars of "waste"? Hey -- that's not even a rounding error!

But let's set aside the quibble of whether "almost a trillion dollars" is "just a rounding error." Your figure derives from a tax hike of 35% to 38.6%. One might instead revert to the 50% rate that was applied during most of the Reagan years. That would translate to about 3 trillion dollars (or three rounding errors!). Do I hear you say "That's not what Obama proposes"? I didn't know Obama's proposal was the topic, but given the squawks about onerous class warfare with even a proposed modest hike, obviously no higher hike would be seriously presented.

Thanks for listening. And would it be disrespectful if, when a "fiscal conservative" in future wants to strip regulatory agencies to save money, we answer "The savings wouldn't even be a rounding error -- talk to Sam." :D

Sam Stone
08-17-2011, 03:59 PM
Sam, I respectfully urge you to be more considerate when you post numbers in these threads.

I am being considerate. I'm considering the error inherent in these numbers. When I said that the Bush tax increase is 'a rounding error', I meant it. Or rather, it's shorthand for saying it's an amount small enough that it's within the error bars of the estimate for the deficit over 10 years.

I'm sure you studied significant digits. You don't want to give numbers that imply a precision that doesn't exist. That's why, when talking about government projections, I tend to use terms like "about a trillion dollars", "somewhere between 5 and 7%", etc.

For example, suppose there is a straightforward question to which the straightforward answer is "about a trillion dollars." Which of the following answers do you find best?

"About a trillion dollars" and "a rounding error" can both be correct, if they are being compared to numbers that are gargantuan in size and estimates that have a tendency to be all over the map. The total unfunded liability the U.S. faces is between 55 and 75 trillion dollars just for entitlements. It's running deficits on the order of 1 to 1.5 trillion dollars per year on top of that. Compared to those kinds of numbers, $69 billion per year (itself an estimate that is at best an approximation) really is a value that exists somewhere down near the noise floor in the data.

For an example of the kinds of errors we're talking about and their magnitude, let's look at the estimates for what the deficit would be in 2011-2014 for the three budgets FY10, FY11, FY12:

FY10:
2011 estimate: 1.081 trillion
2012 estimate: 729 billion
2013 estimate: 704 billion
2014 estimate: 734 billion

FY11:
2011 estimate: 1.267 trillion
2012 estimate: 828 billion
2013 estimate: 727 billion
2014 estimate: 706 billion

FY12:
2011 estimate: 1.645 trillion
2012 estimate: 1.101 trillion
2013 estimate: 767 billion
2014 estimate: 644 billion


Total estimate of debt increase out to 2014:

Fy10: 3.248 trillion
FY11: 3.528 trillion
FY12: 4.157 trillion

Any bets that when we get to 2014, the actual numbers will be significantly higher still?

In just three years, the estimate for how much would be added to the debt was in error by 909 billion dollars, or 303 billion dollars per year. So when I said that the proposed 'revenue enhancement' by Obama was little more than a rounding error, that's what I meant. Throwing 69 billion dollars per year into numbers of this scale and with this amount of inaccuracy in measurement truly is nearly irrelevant to the long-term outcome. It doesn't change the nature and magnitude of the cuts required to balance the budget by an amount large enough to really make a difference.

This gets back to my original point, which has been successfully deflected up until now - EVEN IF you raise taxes on the rich like Obama wants, you still have to make essentially the same cuts you would have made if you didn't. There's no 'balance' to be found here where you can get 50% of the of the money from the rich so you only have to cut half as much.

What's going on is that the Republicans made a tactical error by refusing to consider any tax increases. This has allowed the Obama administration to use a relatively small tax increase (compared to the size of the deficit and debt) as a smokescreen to avoid admitting that major structural change is required in the U.S. government, and that people's expectations for entitlements are way out of whack with reality.

I've listed the three possibilities in decreasing order of my preference. (The long discussion would be fine if it were responsive, but not just to repeat an obvious and repetitious argument.) If "rounding error" somehow has come to mean "about a trillion dollars" in modern American parlance, then I apologize. It's a new idiom for me.

The fact that nearly a trillion dollars over ten years can be considered a rounding error is entirely due to the fact that the U.S. budget is exploding on a gargantuan scale. Don't blame me for that. Blame the idiots in the government.

Let me also offer my way of presenting numbers of which I'm not sure. Suppose I think a number is 7%, that a smaller number would improve the case I'm making, but I'm too lazy to Google for a correct number. I might write "less than 7.5%" or some such. What I won't do is write "5%", and hope no one checks the number. And I certainly won't accuse them of "nitpicking" if they do.

Now you're accusing me of lying with numbers by intentionally choosing numbers just a little smaller than reality to make my case. In fact, where real numbers are known I quote the original sources. For example, the numbers above were taken directly from the budget documents at gpoaccess.gov. Where the best we can do are estimates, I have been careful to NOT use estimates from sources like Heritage or Cato, and when there is a a disagreement between two sides such as between Paul Ryan's estimate for historical revenue and the Democrat estimate, I picked a number in between.

I also linked directly to all the source documents and charts that I used to make my case, so you could check the numbers for yourself.

How many other posters in these debates A)try to put hard numbers to their claims, and B) go to these lengths to make sure the numbers they pick aren't from partisan sources? I can think of maybe a couple.

I sincerely hope I'm being respectful.

No, you're not. If you were being respectful, you would have answered the substance of what I was saying. Instead, you launched into a series of ad-hominem attacks and nitpicks about wording that had nothing to do with the the actual point, and which didn't change the conclusion drawn from those numbers one iota. And not only that, your attacks were groundless. You capped it off by making comments on my character such as, "your spiel was just more of the usual Stone," and "<Stone's> posts are chock-full of exagerations, misconceptions, distortions, and selective data."

On what planet is that being respectful?


I'll plead guilty to being easily annoyed. In fact (and maybe my low-wealth upbringing is showing) I'll admit I get annoyed just when someone refers to "about a trillion dollars" as "a rounding error." The Trillion-Dollar Mistake in Iraq? Hey -- that's just a rounding error! If one of the "fiscal conservatives" complains about a few billion dollars of "waste"? Hey -- that's not even a rounding error!


A trillion dollars is only insignificant in this one specific context - as a TEN YEAR total compared against a government that will spend over 40 trillion dollars over the same period, while borrowing 40% of every dollar it spends. In that context, yes it's insignificant. In every other way, it's a huge freaking amount of money. But rather than shoot the messenger, you might want to reflect on the fact that the U.S. budget is so out of whack that saving 830 billion dollars over ten years will barely make a dent in the fiscal imbalance.

But let's set aside the quibble of whether "almost a trillion dollars" is "just a rounding error." Your figure derives from a tax hike of 35% to 38.6%. One might instead revert to the 50% rate that was applied during most of the Reagan years. That would translate to about 3 trillion dollars (or three rounding errors!). Do I hear you say "That's not what Obama proposes"? I didn't know Obama's proposal was the topic, but given the squawks about onerous class warfare with even a proposed modest hike, obviously no higher hike would be seriously presented.


Not only is it not what Obama proposes, and not what anyone else is proposing, but you need to consider a few other things. First, you're using static scoring - assuming that you can get 3 times the revenue by raising marginal rates 3 times as much. That is demonstrably not true. Go back and look at that chart I posted which shows income tax revenue over time, then look at the chart of marginal rate changes over time. You won't find a strong correlation between marginal rates and total revenue. There is no precedent for being able to collect the kind of revenue you're talking about by tweaking marginal rates like that.

In fact, the number we've been using for the amount of revenue that will be collected by expiring the Bush tax cuts on the rich is probably too high - I let that go and used the high estimate to avoid opening another debate, but the fact is that higher rates also translate into more deadweight losses due to taxation, more tax avoidance activity, and a suppression of GDP growth, all which counteract to some degree the rate increase.

Thanks for listening. And would it be disrespectful if, when a "fiscal conservative" in future wants to strip regulatory agencies to save money, we answer "The savings wouldn't even be a rounding error -- talk to Sam." :D

Not if they claim that cuts to a regulatory agency's budget would balance the budget. Then feel free to tell them that it's a rounding error - because it would be. It's all about context.

Let me give you an example, to be fair, of a similarly-sized number: The cost of the new health care entitlement. Its cost is of the same order of magnitude - a trillion dollars over ten years. If someone on the right suggested that we could balance the budget by just getting rid of the Affordable Health Care Act, I would say the same thing - that it is pretty much a rounding error compared to the scale of the problem. That does not mean it is an irrelevant topic for discussion, or that it does not have large effects on the economy in specific areas. It just means that you can not appreciably change the long term fiscal trajectory by repealing it and saying your job is done.

If repealing the Bush tax cuts on the rich gets you 69 billion dollars per year, that is obviously a lot of money. It is more than three NASA budgets. It is more than the cost of the entire Department of Education. So I do not want to trivialize its effect. But in the context of getting the budget back in balance, it is barely a start. This should frighten you.

septimus
08-17-2011, 04:28 PM
I am being considerate. ... When I said that the Bush tax increase is 'a rounding error', I meant it.

So many words, and you missed the whole point.

Had you written "about a trillion dollars which is a rounding error" we could quibble about the characterization but at least your post would have been informative.

But you didn't.

You wrote "a rounding error", leaving the reader to guess whether this was a billion or trillion or what.

I'd love to be respectful, but it has to be reciprocal. I'd ask you, first of all, to be responsive. (Yours was another long diatribe on budgeting in response to my post which had nothing to do with budgeting, but rather how to represent numbers informatively.) If you apologize for calling me a "nitpicker" for calling attention to large errors in your favor in some of your arguments, I'll apologize for referring to your posts as "spiels."

Sam Stone
08-17-2011, 05:01 PM
You didn't read my post, did you? That whole post was a justification of the use of the term 'rounding error' as shorthand for meaning 'it's an amount that barely registers, and which is swamped by the error of estimation of the deficit itself."

And now your nitpick is even more nitpicky - It's not so much that I used the term 'rounding error', but that in your judgment I had to include the dollar amount. Why? If it's true that it's an amount small enough that it doesn't appreciably change the calculus, my point is made. I provided cites to the data.

Then when I DO go to the trouble of posting all the relevent data ad nauseum, wasting hours of my time to give you the backup you asked for, you hand-wave it away and slightly change your nitpick into something else. You are not debating reasonably. You're not addressing the substantive points I made. You are simply wasting my time.

And then in your last message you repeat the claim that there are 'large errors in my favor'. Please name them. Be specific. This is the third time now you've essentially accused me of lying. I want you to list the numbers that you think are wrong, which err in my favor, and which show a bias (i.e. the errors aren't just trivial differences that exist between estimates and that they all work in my favor). Then you can explain how they change the substantive nature of my claims.

Then when you've done all that, perhaps you could try ADDRESSING THE FREAKING ARGUMENT. And hey, if you don't like my numbers, feel free to go find some of your own. I'm not sure why I should be the only one doing the heavy lifting here.

If you can't do that, I'm done with you. You aren't debating reasonably, and I have better things to do with my time.

septimus
08-17-2011, 05:06 PM
You didn't read my post, did you?
Then when I DO go to the trouble of posting all the relevent data ad nauseum, wasting hours of my time to give you the backup you asked for, you hand-wave it away and slightly change your nitpick into something else. You are not debating reasonably.

If you can't do that, I'm done with you. You aren't debating reasonably, and I have better things to do with my time.

Wow. You still can't admit that "about a trillion dollars which is a rounding error" is more informative than "a rounding error." I guess I'm done with you too.

Sam Stone
08-17-2011, 05:51 PM
So let me get this straight: Your entire argument devolves down to whether I wrote a sentence that could have been more informative had I included a number along with the characterization of that number? That's it? Seriously?

In that case, I concede: Had I included the number value, the information content in the sentence would have been higher. You got me there. Of course, had I included the range of errors on that number, it would have been more informative still. And perhaps I could have digressed into a discussion of the methodology used by the government to project those numbers, and there would have been even more information. All true.

Now, how about you address the substance of my argument?

Shagnasty
08-17-2011, 07:20 PM
So let me get this straight: Your entire argument devolves down to whether I wrote a sentence that could have been more informative had I included a number along with the characterization of that number? That's it? Seriously?

In that case, I concede: Had I included the number value, the information content in the sentence would have been higher. You got me there. Of course, had I included the range of errors on that number, it would have been more informative still. And perhaps I could have digressed into a discussion of the methodology used by the government to project those numbers, and there would have been even more information. All true.

Now, how about you address the substance of my argument?

I am with you Sam Stone. I think you made some very good points backed up with hard numbers as always. Some people are left just taking shots at minor personal quibbles about style rather than the topic hand. Then again, that's the way most of politics itself works too unfortunately.

gonzomax
08-19-2011, 12:28 AM
The deficits are equal to the Bush tax cuts, the drug giveaway program and the costs of the unfunded wars. We are discussing slashing programs now, because we have had a decade of the terrible fiscal disaster that was Bush. Clinton left Bush is a strong financial position, with a surplus far into the future. There was no talk of slashing programs.
So why not start with what caused the mess. Tax and start paying for the wars of Bush. Kill the drug program. Bring the soldiers back from iraq today . Afghanistan tomorrow. While we are at it, slash the defense budget by about 50 percent.
We have to end the tax loopholes, tax shelters and offshore banking cheats.
Then we talk about healthcare. The new healtcare act saves us money over the mess we have morphed into.

gonzomax
08-19-2011, 12:32 AM
http://tpmdc.talkingpointsmemo.com/2011/05/chart-bush-policies-dominant-cause-of-debt.php
Here is the damn chart showing what happened to our economy under the Shrub.

magellan01
08-19-2011, 01:21 AM
Hey gonzomax, I see your back. Now that you are, could you answer the questions asked of you in Posts 103 and 104?

Thanks.

gonzomax
08-19-2011, 11:51 AM
The IRS says your income tax is voluntary. that is because you compute it and then attest to it by signing it. If the IRS says it is voluntary, it must be.
http://dealbook.nytimes.com/2008/08/13/study-tallies-corporations-not-paying-income-tax/ Two thirds of American corporations paid no taxes at all. How does that plunk your right wing heart strings"?

randomface
08-19-2011, 12:01 PM
The IRS says your income tax is voluntary. that is because you compute it and then attest to it by signing it. If the IRS says it is voluntary, it must be.


Were you being serious or sarcastic?

gonzomax
08-19-2011, 12:02 PM
http://www.reuters.com/article/2008/08/12/us-usa-taxes-corporations-idUSN1249465620080812?sp=true
And here is a Reuters story saying the same thin.
PS The actual corporate tax rate is not 35 percent. It is 15 percent for the first 50 ,000 and gradually goes up to 35 percent at 18.3 million. But of course they avoid ever paying that horrible 35 percent that only exists in right wing sound bites.

gonzomax
08-19-2011, 12:38 PM
http://www.pbs.org/moyers/journal/01082010/watch.html
Here is a Moyer's show on the problem. Goldman is paying 1 percent and probably is pissed about that.

magellan01
08-19-2011, 01:04 PM
The IRS says your income tax is voluntary. that is because you compute it and then attest to it by signing it. If the IRS says it is voluntary, it must be.
http://dealbook.nytimes.com/2008/08/13/study-tallies-corporations-not-paying-income-tax/ Two thirds of American corporations paid no taxes at all. How does that plunk your right wing heart strings"?

The question to you was:

And what happens if you don't volunteer?

magellan01
08-19-2011, 01:09 PM
http://www.reuters.com/article/2008/08/12/us-usa-taxes-corporations-idUSN1249465620080812?sp=true
And here is a Reuters story saying the same thin.
PS The actual corporate tax rate is not 35 percent. It is 15 percent for the first 50 ,000 and gradually goes up to 35 percent at 18.3 million. But of course they avoid ever paying that horrible 35 percent that only exists in right wing sound bites.

And you still haven't answered this:

Be that as it may, what percent do you think corporations should pay? Let's say you're happy with a real 35%, how would you handle the fact that other countries have a rate under half that. Did you watch 60 Minutes last night? Look at Switzerland, Ireland, Canada. How would you handle that?

Here, let me make it easier for you:

1) what percent do you think corporations should pay?
2) Let's say you're happy with a real 35%, how would you handle the fact that other countries have a rate under half that?
3) Did you watch 60 Minutes last night? Look at Switzerland, Ireland, Canada. How would you handle that?

Feel free to group #s 2 and 3 if you'd like. and this time, how about having what you type resemble an answer to the questions.

magellan01
08-19-2011, 01:10 PM
Were you being serious or sarcastic?

Oh, he's serious. But let's see how—or IF—he answers Post 146.

erislover
08-19-2011, 01:46 PM
I think you would have more support than you think among conservatives if there was a special tax just to pay off outstanding debt and not to be touched for any other purpose. Fiscal conservatives like myself have always been genuine about that type of thing despite accusations to contrary. Curious. When I go to Target and buy a pair of pants, is it irresponsible for them to use the revenue from that purchase to buy more soda?

In general, governments and businesses have very little in common in a capitalistic society. But how to spend money in hand is not one of the differences: you put it to the best use you can. Perhaps the best use is to pay off debt. But to require it to be earmarked that way is economically irresponsible and inefficient.

If debt is a bad thing, the answer is simple: make loans illegal. Or is debt only bad for the government? What particular facet of debt makes it obviously correct for main street and wall street but not PA ave?

Testy
08-19-2011, 03:38 PM
Curious. When I go to Target and buy a pair of pants, is it irresponsible for them to use the revenue from that purchase to buy more soda?

In general, governments and businesses have very little in common in a capitalistic society. But how to spend money in hand is not one of the differences: you put it to the best use you can. Perhaps the best use is to pay off debt. But to require it to be earmarked that way is economically irresponsible and inefficient.

If debt is a bad thing, the answer is simple: make loans illegal. Or is debt only bad for the government? What particular facet of debt makes it obviously correct for main street and wall street but not PA ave?

erislover
I'm not trying to put words in Shagnasty's mouth but this is a ridiculous comparison. Target can obviously spend their money on whatever they wish and borrow as much as people will lend them. I would think that when Target was spending 40% of their revenue on interest payments they might decide they were doing something wrong before the bankruptcy proceedings. What's your opinion?
Of course, the other big big difference is that Target isn't going to be able to make ME pay their debt when they go bankrupt.
The problem with the government is that they are not trustworthy. If people agree to pay additional taxes to pay down the debt, there is no real certainty that the money will be used for that. The tendency would be to use the money for whatever crisis had their attention at the moment and let the debt pile up as an exercise for some future legislature.

Regards

Testy

erislover
08-19-2011, 04:02 PM
erislover
I'm not trying to put words in Shagnasty's mouth but this is a ridiculous comparison. Target can obviously spend their money on whatever they wish and borrow as much as people will lend them. I would think that when Target was spending 40% of their revenue on interest payments they might decide they were doing something wrong before the bankruptcy proceedings. What's your opinion?My opinion is that the question of how to best spend revenues isn't answered by decree, which was my beef.
Of course, the other big big difference is that Target isn't going to be able to make ME pay their debt when they go bankrupt.Unless you're employed by them, and your job is cut to trim down expenses? Or, wait. Unless your government is democratically elected, in which case you're part of the "vote market"? Ah, why bother; the point of comparison was merely that the source of revenue and the use of that revenue have nothing to do with each other. Requiring it to be so is irresponsible. It is no less irresponsible for the government or for a corporation. Dictators---be they real or scribbles on paper---tend not to allocate resources efficiently.
If people agree to pay additional taxes to pay down the debt, there is no real certainty that the money will be used for that.I don't see why there should be. It makes absolutely no sense. If the best use of tax dollars on cigarettes is a new stadium, then that's the best use. Period. If the best use of revenue on khakis is a wider selection of Coke products, then that's the best use. Period. A consumer group forming to demand that Target spend all revenue derived from khakis on more khakis is ridiculous. It's no less ridiculous to suggest revenue from a new tax be spent only on... on anything.

Testy
08-19-2011, 05:21 PM
My opinion is that the question of how to best spend revenues isn't answered by decree, which was my beef.
Unless you're employed by them, and your job is cut to trim down expenses? Or, wait. Unless your government is democratically elected, in which case you're part of the "vote market"? Ah, why bother; the point of comparison was merely that the source of revenue and the use of that revenue have nothing to do with each other. Requiring it to be so is irresponsible. It is no less irresponsible for the government or for a corporation. Dictators---be they real or scribbles on paper---tend not to allocate resources efficiently.
I don't see why there should be. It makes absolutely no sense. If the best use of tax dollars on cigarettes is a new stadium, then that's the best use. Period. If the best use of revenue on khakis is a wider selection of Coke products, then that's the best use. Period. A consumer group forming to demand that Target spend all revenue derived from khakis on more khakis is ridiculous. It's no less ridiculous to suggest revenue from a new tax be spent only on... on anything.

erislover

I agree with you that money should be spent where it is most effective. That is obvious. Now, who gets to decide what that is? My opinion is that the most effective thing they could do right now is to pay off the national debt. What is your opinion on that?

The debt has to be fixed or there isn't going to be any money for anything else. What are we up to now, 35% - 40% of income? Even dictators can figure out that they've screwed-up somewhere when that happens. Somehow, we seem to have missed that.

Austerity measures aren't popular with anyone, least of all politicians. Austerity measures costs them votes come election time. There is an enormous conflict of interest here that no one seems to mention. A politician could wind up out of a job if he actually starts cutting costs and raising revenue.
No, unless they are forced to, they won't actually fix the problem but will simply carry on as usual, spending money by the trillions that they don't have because that's what keeps them in office. It's what they've done for the past however many years.
Look at all the progress they've made on a balanced budget. Everyone agrees that a balanced budget would be a fine thing but they all balk when it comes to actually cutting funding for their pet projects. Result? No progress.

I would only vote for someone to raise taxes to pay off the deficit under the following conditions:

a) The money is dedicated to this purpose. Completely. No borrowing from it to do something else.
b) There must be a balanced budget amendment signed into law, forbidding the government to run up any more deficits No weaseling, no exceptions. Otherwise we'll pay off one debt only to be faced with a fresh new one.
c) The tax would be for a specific number of years with no provision to renew.

I don't know about you but I can't see the politicians of either party actually getting any of this done. So, the alternative is that they just have to do less. It might actually be a good thing. For example, the DEA might have to quit busting potheads due to budgetary constraints. There are a LOT of things I'd like to see the government unable to do.

I do not believe that politicians should be allowed to weasel out of this. They have caused the problem by continually spending money they don't have, to keep their constituents happy and keep themselves in office. Now let them fix it. And who knows, maybe we'll get some political types that can get elected without having to promise the world to the voters.

Maybe it is just cynicism on my part, but you seem to have a LOT more faith in the integrity of politicians than I do.

Regards

Testy

Euphonious Polemic
08-19-2011, 05:47 PM
erislover

I agree with you that money should be spent where it is most effective. That is obvious. Now, who gets to decide what that is? My opinion is that the most effective thing they could do right now is to pay off the national debt. What is your opinion on that?

The debt has to be fixed or there isn't going to be any money for anything else. What are we up to now, 35% - 40% of income? Even dictators can figure out that they've screwed-up somewhere when that happens. Somehow, we seem to have missed that.



And yet in 2010, it cost 164 billion in interest payments to service the debt (http://en.wikipedia.org/wiki/2010_United_States_federal_budget), representing 4.6% of spending.

To put this into perspective, it's like a family who spends $50,000/ year on all llving expenses, and paying just under $200/month in interest payments for their car, credit cards and lines of credit.

I'm not sure if it's as much of a crisis as you seem to think.

erislover
08-19-2011, 06:21 PM
erislover
I agree with you that money should be spent where it is most effective. That is obvious. Now, who gets to decide what that is? My opinion is that the most effective thing they could do right now is to pay off the national debt. What is your opinion on that?If the choice was to pay down debt, or make investments which expect to yield future revenues capable of at least maintaining interest payments, I'd probably suggest we invest.
The debt has to be fixed or there isn't going to be any money for anything else.Servicing debt can be expensive. Not investing in the future can also be expensive. I don't believe I have the information available, or access to the right people to advise me, on which is more important. My personal uncertainty suggests, in my own life, I'd probably work to pay down principle. But I wouldn't cancel my internet connection to do it.

Look at all the progress they've made on a balanced budget. Everyone agrees that a balanced budget would be a fine thing but they all balk when it comes to actually cutting funding for their pet projects. Result? No progress.There's a very good reason for that. Debt can be an amazingly good thing. Sure, I could save up for years to buy a car. But I could increase my earning potential (by reaching more, better jobs) by having a car now, and paying it off in the future.
I would only vote for someone to raise taxes to pay off the deficit under the following conditions:

a) The money is dedicated to this purpose. Completely. No borrowing from it to do something else.
b) There must be a balanced budget amendment signed into law, forbidding the government to run up any more deficits No weaseling, no exceptions. Otherwise we'll pay off one debt only to be faced with a fresh new one.
c) The tax would be for a specific number of years with no provision to renew.I have no problem with (c), but disagree with (a) and don't know what, exactly, you mean by a "balanced budget." Do you mean no deficit spending? Do you mean no additional deficit spending? Neither of these seem particularly wise to me.
They have caused the problem by continually spending money they don't have, to keep their constituents happy and keep themselves in office.Frankly I think it's great when a population is happy, but I understand there are those that disagree.
Now let them fix it.Oh, that's definitely getting fixed.
Maybe it is just cynicism on my part, but you seem to have a LOT more faith in the integrity of politicians than I do.I don't believe politicians have any more integrity than anyone else.

Testy
08-19-2011, 06:27 PM
And yet in 2010, it cost 164 billion in interest payments to service the debt (http://en.wikipedia.org/wiki/2010_United_States_federal_budget), representing 4.6% of spending.

To put this into perspective, it's like a family who spends $50,000/ year on all llving expenses, and paying just under $200/month in interest payments for their car, credit cards and lines of credit.

I'm not sure if it's as much of a crisis as you seem to think.

Euphonious Polemic

We can say it isn't a problem if we want but many people disagree. I disagree myself.

Regards

Testy

Testy
08-19-2011, 06:44 PM
If the choice was to pay down debt, or make investments which expect to yield future revenues capable of at least maintaining interest payments, I'd probably suggest we invest.

Investing is great, I'm all for it. Which investments investments are going to show a return? My own opinion would be little better than a thoughtful guess. I'm not sure others can predict it either.


Servicing debt can be expensive. Not investing in the future can also be expensive. I don't believe I have the information available, or access to the right people to advise me, on which is more important. My personal uncertainty suggests, in my own life, I'd probably work to pay down principle. But I wouldn't cancel my internet connection to do it.

We agree on this. That would be my choice as well. Truly, I believe that there are a LOT of things the gov should be investing in. My own opinions don't seem to track well with Washington's.:p


There's a very good reason for that. Debt can be an amazingly good thing. Sure, I could save up for years to buy a car. But I could increase my earning potential (by reaching more, better jobs) by having a car now, and paying it off in the future.

Sure, in the instance you mention, debt is just dandy. I don't really think that's what we're talking about though. In the case of the gov, it's more like having a half dozen cars already and just wanting one that's fancier,


I have no problem with (c), but disagree with (a) and don't know what, exactly, you mean by a "balanced budget." Do you mean no deficit spending? Do you mean no additional deficit spending? Neither of these seem particularly wise to me.

By balanced budget, I mean no deficit spending. Just what it says. I'm sorry they don't seem wise to you but I don't think the gov can be trusted to control themselves.


Frankly I think it's great when a population is happy, but I understand there are those that disagree.

OK. Was I snarky at you somewhere? I'm all for people being happy. I just don't think it's the government's place to make them that way.


Oh, that's definitely getting fixed.


With any luck at all and if the various representatives listen to what people are telling them.


I don't believe politicians have any more integrity than anyone else.

Well, I guess we aren't too far apart then. You think they're the same and I think they are only a little lacking in that aspect.
Seriously though, without some sort of legal restrictions, why do you think Washington will reign themselves in?

Regards

Testy

Euphonious Polemic
08-19-2011, 06:52 PM
Euphonious Polemic

We can say it isn't a problem if we want but many people disagree. I disagree myself.

Regards

Testy

I didn't say it wasn't a problem. I myself don't pay any interest on credit cards - they're paid in full every month.

I said it wasn't a crisis.

Testy
08-19-2011, 07:00 PM
I didn't say it wasn't a problem. I myself don't pay any interest on credit cards - they're paid in full every month.

I said it wasn't a crisis.

OK, gotcha. I am the same as you with the credit cards.

Testy

erislover
08-19-2011, 07:03 PM
Investing is great, I'm all for it. Which investments investments are going to show a return? My own opinion would be little better than a thoughtful guess. I'm not sure others can predict it either.Such "I dunnos" are why small investments like public radio and publicly funded research happen. Yet these are exactly what people want to cut. While China gears up for space, what are we doing? Cutting budgets. Maybe that's wildly responsible. I doubt it, but maybe. Thankfully we live in a society where we can vote to try and guide politicians.
Sure, in the instance you mention, debt is just dandy. I don't really think that's what we're talking about though. In the case of the gov, it's more like having a half dozen cars already and just wanting one that's fancierIn some cases, sure. Sure! Why take on debt to get a master's degree when you have a perfectly good bachelor's? Marginal benefits are a bit "if by whiskey." It's easy to see the benefits of a national highway system. Harder to see the benefits of expanding the number of lanes, or improving infrastructure in other ways. It's hard to see what happens when we gut education, because the effects take years to materialize.

Thankfully, America has recognized that there are enormous benefits to specialization, so we have created a class who specialize in trying to understand these issues. They're about as perfect as anything else we do.

By balanced budget, I mean no deficit spending. Just what it says.I see. Using your criteria as a guide, would anyone buy a company? A house? An education? A car? You've offered specific numbers to demonstrate the idiocy and wild irresponsibility of our government. How do these work as criteria?
I'm all for people being happy. I just don't think it's the government's place to make them that way.Hmm. But we probably shouldn't raise taxes because it'd make people unhappy?
Well, I guess we aren't too far apart then.I doubt we are very far apart at all.
Seriously though, without some sort of legal restrictions, why do you think Washington will reign themselves in? I'm not convinced anything needs reigning in except defense spending and tax cuts. I haven't seen anything since the Bush administration's wars and the creation of Homeland Security and TSA that I thought was ridiculously irresponsible.

Testy
08-19-2011, 07:48 PM
Such "I dunnos" are why small investments like public radio and publicly funded research happen. Yet these are exactly what people want to cut. While China gears up for space, what are we doing? Cutting budgets. Maybe that's wildly responsible. I doubt it, but maybe. Thankfully we live in a society where we can vote to try and guide politicians.

We are very much in agreement on a lot of things. I loathe it when NASA's budget gets cut and think that dropping out of the space race is one of the most short-sighted things we can do. I'm in favor of basic and applied research in almost any area you want to mention. OTOH, not funding NPR is no big loss. I like it well enough but it isn't worth much to me on a practical basis.


In some cases, sure. Sure! Why take on debt to get a master's degree when you have a perfectly good bachelor's? Marginal benefits are a bit "if by whiskey." It's easy to see the benefits of a national highway system. Harder to see the benefits of expanding the number of lanes, or improving infrastructure in other ways. It's hard to see what happens when we gut education, because the effects take years to materialize.
Thankfully, America has recognized that there are enormous benefits to specialization, so we have created a class who specialize in trying to understand these issues. They're about as perfect as anything else we do.

I take your point on investment, even if it requires debt, occasionally being a good thing. I am less convinced that the people incurring the debt understand what they are expecting to get as an ROI and whether the investment will eventually pay for itself.
Yes, destroying the education system is amazingly short sighted but is done because the guy that pushed for it isn't going to be in office when the results happen. That's why education gets hit.


I see. Using your criteria as a guide, would anyone buy a company? A house? An education? A car? You've offered specific numbers to demonstrate the idiocy and wild irresponsibility of our government. How do these work as criteria?


I think there is a difference here. If I buy a company or a car or a cat, and incur debt by doing so, I know that I will have to repay that loan eventually. I cannot borrow more money to repay the first debt and then continue to do this. That is where I think the disconnect is. You and I may incur debt for a specific purpose but you and I will also have to repay that debt. This is not the case with the elected representatives. The repayment is sometime in the future when they may not even be in office. The other point of course is that it's not their money.

I'm sorry. Do you mean what would happen if the gov had no debt? I have no idea what would happen. I think trying it would be a fine thing.


Hmm. But we probably shouldn't raise taxes because it'd make people unhappy?


Well, it would certainly make ME unhappy. Seriously, avoiding pissing-off the voters is no bad thing.


I doubt we are very far apart at all.
I'm not convinced anything needs reigning in except defense spending and tax cuts. I haven't seen anything since the Bush administration's wars and the creation of Homeland Security and TSA that I thought was ridiculously irresponsible.

Well, as far as reigning-in or preferably just abolishing TSA and DHS we are in agreement. Both organizations are intrusive, occasionally abusive, and don't deliver the results they were created to supply. As far as the wars go, I was and am all in favor of the one in Afghanistan but still can't figure out what the hell we're doing in Iraq.
Reigning-in defense spending might be a good thing. It depends on how much and in what areas. I like the idea of having a very powerful military.

Regards

Testy

erislover
08-19-2011, 10:41 PM
OTOH, not funding NPR is no big loss. I like it well enough but it isn't worth much to me on a practical basis.The reality of "no big loss to cut" is "no big gain to cut."
I am less convinced that the people incurring the debt understand what they are expecting to get as an ROI and whether the investment will eventually pay for itself.Perhaps. This is why investment is risky. Do you want people's health and education fundamentally governed by their understanding risk? Apparently the entire right feels it is better. The government isn't trying to actively profit and exploit these folks like private firms would. I love the market, don't get me wrong, it definitely has its place. But is this it?
I think there is a difference here. If I buy a company or a car or a cat, and incur debt by doing so, I know that I will have to repay that loan eventually.When I buy a bond, I eventually cash it in.
I cannot borrow more money to repay the first debt and then continue to do this.It's like a degenerate solution, it's perverse, but yeah, it's possible.
That is where I think the disconnect is. You and I may incur debt for a specific purpose but you and I will also have to repay that debt.The government also pays its debt. Anyway, in 2009 the government's budget included payments on the interest of debt of about 9%. Me? 22% of my gross income goes toward my debt payments, of which about 7% is interest. And I'm apparently a good enough risk that my credit rating is high and my limits steadily grow. I don't even own property, though there are those in my income level certainly do, in which case I'd estimate my interest payments would approach... (whips out calculator)... 10%. Now, I did just ask my boss for a raise, and got it, so these numbers will shrink next month.

Wait, isn't the government asking its bosses for a raise? Isn't that this whole thread? Seems like the right wants the government to be run like a household, except it actually is, and they hate it. The government is lower middle class. Of course, it is common knowledge on the left that the right has been waging war against the middle class for some time, so maybe this is all very obvious and unsurprising to some that "starving the beast" is just the same war on a metaphorical level.
Well, it would certainly make ME unhappy. Seriously, avoiding pissing-off the voters is no bad thing.It's a fine line you're not crossing there. I find it hard to see.

gonzomax
08-22-2011, 11:05 AM
And you still haven't answered this:



Here, let me make it easier for you:

1) what percent do you think corporations should pay?
2) Let's say you're happy with a real 35%, how would you handle the fact that other countries have a rate under half that?
3) Did you watch 60 Minutes last night? Look at Switzerland, Ireland, Canada. How would you handle that?

Feel free to group #s 2 and 3 if you'd like. and this time, how about having what you type resemble an answer to the questions.
There is no 35 percent. That is why it does not need to be defended. It is a statutory rate that is not being collected.

magellan01
08-22-2011, 02:43 PM
There is no 35 percent. That is why it does not need to be defended. It is a statutory rate that is not being collected.

Sure it does. When a company is looking to its tax liabilities, it needs to look at the tax laws where the company is. If they feel they can use lawyers to lower their tax liabilities they will do so, but that costs money and adds a degree of complexity to their businesses that they rather not have.While I agree with you that I think few corporations, if any, are paying the full 35%, they must be paying more than they'd pay elsewhere. If not, all these company's wouldn't be moving their companies, or a good chunk of their operations, elsewhere.

Again, did you see the 60 Minutes piece? U.S. companies have moved their business out of the country to the tune of 2 or 3 trillion dollars. They've gone to places like Ireland and Switzerland specifically due to the lower taxes there. So, how would you stop companies leaving? How would you attract those that have left back?

If you were a CEO, with a fiduciary responsibility to your shareholders, would you keep everything i the U.S.? Or would you think about moving a chunk of your business to countries like Ireland, Switzerland or Canada, where the tax rate is about half?

Rekd
08-22-2011, 02:57 PM
I'm sure it's been said many times already, but I'll re-state it. I don't mind more taxes if they are used for what they were originally intended.

What's going on in government these days is criminal and they're using my tax money to do it.

Naxos
08-28-2011, 03:48 AM
It seems like Americans' attitudes towards tax, particularly income tax, are dramatically different from those in other Western nations. If that's so, how long has it been like that? Was there a time when Americans were more willing to consider tax increases, and if so, when did it change and why?

In modern political history of the past 25 years, one of the fundamental reasons against tax increases, even when they're mostly for the wealthy of the population, started with the Reagan-era vilification of lower income and minority groups -- that it was the poor and social programs that were stealing the bread off the table of middle class whites, therefore they were evil, and taxes should be slashed and the Government dismantled because it was there only to cater to the needs of the poor and the minorities.

In any and all conservative political arguments against taxes in the past 25-30 years there's never a mention of the Republican administrations' blowing the deficit and the debt of the US to astronomical levels. All that activity was eagerly justified for random reasons that appeased the hate of the majority white population against the minorities and the poor, while most of the country's wealth has been consistently funneled to the richest 5% of the population.

So now we're at a point where taxes are still an anathema, one example being that there's a specific intent to to let anyone who's sick without a health plan to die instead of having access to health care, because most people in such circumstances are poor and minorities, so this is a justified outcome for them.

At the same time, repeated attempts to increase financial benefits to the richest and keep multi-decade tax credits to mega-corps intact, are continuing at a feverish tempo, and the latest such effort by the conservatives is in last week's news.