An interesting theory, but damn that is a lot to gamble with.
America is ungovernable
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An interesting theory, but damn that is a lot to gamble with.
Pretty much sums how I feel about it. Gov. spending doubled during the Bush era. So far in Obama's world, gov. spending has doubled that already stupidly large number...again.
This pretty much sums how I feel about it:
http://www.bankruptingamerica.org/2011/07/public-pulse-your-opinions-our-new-video/
This pretty much sums how I feel about it:
http://www.bankruptingamerica.org/2011/07/public-pulse-your-opinions-our-new-video/
When was the last time cutting spending created jobs? When was the last time reducing taxes on the wealthy and corporations caused them to hire more people?
Fairly certain the answer is never.
Fairly certain the answer is never.
Read all of it and see what you think:
http://www.businessinsider.com/want-to-create-jobs-cut-government-spending-2011-3
http://www.businessinsider.com/want-to-create-jobs-cut-government-spending-2011-3
Santilli
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This is at the core of it:
"A second important step would be to prohibit any new regulations, and to get rid of as many useless or counterproductive government mandates as possible. Regulations prevent economic activity that otherwise would take place. And although many are aimed at helping the middle-class and those with lower incomes, new regulations on credit and debit cards are driving up the cost of consumer credit and leading to new fees on checking accounts with less than significant balances."
Government regulation reduces competition, making the rich the only ones that can play in certain fields. If it takes 10 years
for a startup to get a drug approved, what kind of pockets do they have to start with?
California is certainly at the front of over government regulation, driving the 6th largest economy in the world to China, India, etc.
Read more: http://www.businessinsider.com/want-to-create-jobs-cut-government-spending-2011-3#ixzz1TjsoEVqU
"A second important step would be to prohibit any new regulations, and to get rid of as many useless or counterproductive government mandates as possible. Regulations prevent economic activity that otherwise would take place. And although many are aimed at helping the middle-class and those with lower incomes, new regulations on credit and debit cards are driving up the cost of consumer credit and leading to new fees on checking accounts with less than significant balances."
Government regulation reduces competition, making the rich the only ones that can play in certain fields. If it takes 10 years
for a startup to get a drug approved, what kind of pockets do they have to start with?
California is certainly at the front of over government regulation, driving the 6th largest economy in the world to China, India, etc.
Read more: http://www.businessinsider.com/want-to-create-jobs-cut-government-spending-2011-3#ixzz1TjsoEVqU
Stereodude
Not really a
Funny, because I'm really certain the answer isn't never. Even if it was, we know the answer to converse question, "When was the last time raising taxes on the wealthy and corporations caused them to hire more people?", is indeed absolutely never.
How come every time the gov't cuts taxes their revenues goes up? Reagan cut taxes and the gov't doubled it's revenue over a period of 10 years. If cutting taxes doesn't cause growth and add more tax payers where did the extra revenue come from?
Doesn't matter where you are (or what type of entity) if your expenditure exceeds your income in you're in an unsustainable position and destined to fail, apart from that it's time Politicians remember who they're supposed to be representing first and foremost in Parliament... the people who elected them
jtr1962
0
Remember the tax rate under Reagan was 50% for the majority of his term. It was cut under Bush I, raised slightly under Clinton, then cut again under Bush II. The theory that cutting taxes generates more government revenue is correct-to a point. It should be obvious that a marginal rate of zero would mean no revenue. And it should be obvious on the other end that a marginal rate of 100% will create a disincentive for anyone wealthy to do anything, pretty much resulting in less revenue. Revenue is maximized somewhere in the middle. It could be argued that the budget surpluses under Clinton were the result of hitting the sweet spot in marginal rates under Reagan. After that, taxes were cut too much, especially capital gains, resulting in a long-term structural deficit. Two unnecessary wars didn't help matters, either.
You don't necessarily need to tax income, either. In fact, an income tax is an awful way to generate revenue. It requires employing an army of accountants who otherwise could be doing some other activity which directly generates wealth. It makes much more sense to tax trade, with higher taxes on luxury goods, and no taxes on basic necessities. If you set the tax rates right, you'll maximize revenue. Same with regulation. You need enough regulation to assure safety, but not so much that only corporations with deep pockets can compete.
Any way you look at though, if you set taxes either too low or too high, you run into problems. The actual rate depends upon how much the government spends. This in turn depends upon what functions are necessary for the government to perform. In my opinion, besides defense, law enforcement, and justice, this means building whatever large infrastructure projects are needed for the economy to function efficiently. Transportation, water, sewer, and the electrical grid come to mind. Education and very basic medical care make sense also. I have mixed feelings about a safety net. The purpose of a social safety net is to protect the populice from downturns in the economy where their income might be interrupted through no fault of their own. The age old problem is how to do this without fostering dependency, or having social service providers enriching themselves off the system. If these things are unavoidable, then a social safety net is best left to charity.
It also goes without saying that long term deficits are bad, period. Interest on the national debt is the single largest line item in the budget. That money could instead go towards providing other things, or even lowering some taxes on the middle class. I do agree we need a balanced budget amendment. Once the debt is tamed and paid off, the US should never again resort to borrowing money.
jtr1962
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Consumer debt is what helped create a false bubble of prosperity which couldn't be sustained. Like governments, people should learn to live within their means. Don't charge more than you can afford to pay off in full at the end of the month. Easy access to credit, especially home equity loans, was the single worst thing to happen. Not only did people mortgage the roof over their heads for stuff they didn't need, but they squandered the primary way wealth is passed from generation to generation-namely by inheriting real estate from one's parents. The conspiracy theorist in me says this was an intentional ploy to keep the working classes poor so the wealthy will always have someone willing to do their dirty work for low pay. Keep people in debt, allow them to borrow from their homes to keep upward pressure on salaries down, stop intergenerational transfer of wealth, encourage people to buy consumer crap they don't need, especially products which provide companies with income streams like cell phones, printers, automobiles, via relentless advertising. On top of this cause the prices of basic necessities to go up via commodity trading. All this happening simultaneously seems like too much coincidence to me.
Nevertheless, people have a way to fight back. Don't spend more than you make. Save money to tide you over in between jobs so you can be choosy and only take employment paying a fair wage. Don't borrow from the equity on your home, ever. Live where you don't need to own a car, elect representatives who will encourage development of communities where you can walk, bike or take mass transit. Don't buy something new until the old either is broke, are functionally obsolete. Don't let salepeople talk you into upgrades you don't need. Learn to ignore the hype in advertising. I'm not the first to say any of this. I just wish they would teach these things in school, under the guise of basic economics.
I feel like rolling back a bit and making sure there are some basic points we can all agree upon.
1. We should pay our bills (pay the agreed amount for services and goods consumed).
2. We should collect enough money to cover our expenses (balanced budget).
3. Debt is bad (we should eventually pay off all our debt).
4. Waste is bad (if the government can't put our money to good use, they shouldn't take it in the first place).
5. Some services are better done by the government (police, army, etc)
Now, what is considered waste, what services qualify in statement #5, and what dollar amount statement #2 should be are all solid points of contention.
Yes?
1. We should pay our bills (pay the agreed amount for services and goods consumed).
2. We should collect enough money to cover our expenses (balanced budget).
3. Debt is bad (we should eventually pay off all our debt).
4. Waste is bad (if the government can't put our money to good use, they shouldn't take it in the first place).
5. Some services are better done by the government (police, army, etc)
Now, what is considered waste, what services qualify in statement #5, and what dollar amount statement #2 should be are all solid points of contention.
Yes?
jtr1962
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Yes, that's basically everything in a nutshell. Low taxes then imply small government, higher taxes bigger government. The argument then basically devolves to what functions should government do, and can those functions be performed more efficiently or cheaper by private industry. My take on this is the majority of products or services which aren't strict necessities are best left to private industry. What is absolutely needed for an economy to function generally needs to be at least partially paid for by government. A good example might be transportation. There's no way private industry would build a comprehensive system of roads or railroads. If they did, every road would be a toll road. However, if government provides the backbone of infrastructure, often private industry can provide profitable transportation services which cover the maintenance of that infrastructure. That's how I see it. Government makes the initial big investments private industry won't. Over time, it recoups that investment in taxes paid on profits.
I honestly believe that the "sweet spot" in public/private allocation of services is pretty massive, with the slow-moving inefficiencies of a government bureaucracy countered by greedy and corrupt private industry. It's little wonder that people feel strongly about the issue, as neither of these options is any good for the average citizen. It just depends on which you feel is the bigger evil.
jtr1962
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I agree. Every time I hear someone talk about the waste and fraud in government projects, I counter with the huge bonuses paid to executives in large corporations. In a manner of speaking, this is just another form of inefficiency. Money is spent on exorbitant salaries going to people who really don't need that much money, instead of towards lower prices and/or better product. And don't get me started on all the money large corporations waste on unnecessary business trips, or superfluous advertising, or unnecessarily luxurious corporate buildings. Some might say it's all about appearances. To me the appearance is that those in charge are playing fast and loose with other people's money (ironically that's the same argument I often hear from the antigovernment types).
The biggest difference between wasteful CEOs and wasteful politicians is we can vote the latter out of office. That in my opinion is the biggest advantage when government is put in charge. If we don't like what's going on, we vote someone in to put an end to it. Can't do that even when we see the CEOs of large banks basically setting us up for a repeat of 2008.
The biggest difference between wasteful CEOs and wasteful politicians is we can vote the latter out of office. That in my opinion is the biggest advantage when government is put in charge. If we don't like what's going on, we vote someone in to put an end to it. Can't do that even when we see the CEOs of large banks basically setting us up for a repeat of 2008.
Stereodude
Not really a
Do you get outraged at the salaries of professional athletes too? What about the fact that tickets to an average professional sporting event cost so much? What about the cost of concessions at the those events?
How about the salaries of celebrities and the cost of movies?
How about the salaries of celebrities and the cost of movies?
Santilli
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Our governments' basic purpose was to provide a skeleton regulation system, to allow free enterprise. The concepts of a limited central government, with states rights has been run over by various political issues that allowed the Federal government to have powers to which they are not entitled, and refuse to give back, or give up.
As for corporations:
Our government is responsible for the existence of those absurd salaries, and poor business practices. The bailout is a good example.
The way the stock market works is as well.
LET BUSINESS' FAIL. That is the nature of free enterprise.
Why should I be outraged at someone else being smart enough to negotiate a contract which allows them to live a wonderful life? Sports salaries are created by their value in advertizing products. The salaries don't exist if the companies don't make money paying for the advertizing, and selling their products.
My objection is that the government tells these companies how to spend their money, and us, using a tax code that dictates if you don't spend the money, we take it.
I don't blame huge corporations for throwing huge parties, and living large, since that money will be stolen by the IRS if it's not used.
Government should not be telling us how to spend our earnings, etc. The sales tax
mentioned earlier is a much cleaner solution to an agency never authorized under the
original Constitution. The entire point of the Constitution was to limit the Federal government by limiting it's revenue.
Everytime I see some idiot making 22 million a year, I remember back to the anti-trust legislation with Curt Flood. The reason it was settled was the owners didn't really want their laundry out in the open. The owner of the Dallas Cowboys paid most of his players
under 50k a year, most about 20k. He paid his son 7 million dollars to manage the fan club, and, they still declared 44 million in profit.
Why don't I go to basketball games anymore? The IRS has told corporations that they
can deduct basketball tickets, boxes, seats, etc. as a business expense, so, they will pay
a LOT of money, since if they don't spend the money, the IRS takes it. So, no more free enterprise governing ticket prices.
What REALLY gets my goat is the administrator salaries paid to PUBLIC SCHOOL supervisors, principals, and superintendents. City board of directors seem to think they are running Apple or something, and, I can't believe any superintendent is worth 600k a year, plus a golden parachute of the same amount, and, lifetime medical.
As for the argument we can vote corrupt politicians out of office: That doesn't seem supported by much evidence, given the two party system we have. It seems
that even when we have the Republicans in office, they fail to do what they were voted into office to do. I think that, by it's nature, Washington and congress provides so many
huge chances to make incredible amounts of money, and perks, that once you get there, you don't want to upset the golden goose, just get your share and get out.
I've often felt that's Obama's plan: get 4 years, the benefits, and get voted out, and, you are set for life.
As for corporations:
Our government is responsible for the existence of those absurd salaries, and poor business practices. The bailout is a good example.
The way the stock market works is as well.
LET BUSINESS' FAIL. That is the nature of free enterprise.
Why should I be outraged at someone else being smart enough to negotiate a contract which allows them to live a wonderful life? Sports salaries are created by their value in advertizing products. The salaries don't exist if the companies don't make money paying for the advertizing, and selling their products.
My objection is that the government tells these companies how to spend their money, and us, using a tax code that dictates if you don't spend the money, we take it.
I don't blame huge corporations for throwing huge parties, and living large, since that money will be stolen by the IRS if it's not used.
Government should not be telling us how to spend our earnings, etc. The sales tax
mentioned earlier is a much cleaner solution to an agency never authorized under the
original Constitution. The entire point of the Constitution was to limit the Federal government by limiting it's revenue.
Everytime I see some idiot making 22 million a year, I remember back to the anti-trust legislation with Curt Flood. The reason it was settled was the owners didn't really want their laundry out in the open. The owner of the Dallas Cowboys paid most of his players
under 50k a year, most about 20k. He paid his son 7 million dollars to manage the fan club, and, they still declared 44 million in profit.
Why don't I go to basketball games anymore? The IRS has told corporations that they
can deduct basketball tickets, boxes, seats, etc. as a business expense, so, they will pay
a LOT of money, since if they don't spend the money, the IRS takes it. So, no more free enterprise governing ticket prices.
What REALLY gets my goat is the administrator salaries paid to PUBLIC SCHOOL supervisors, principals, and superintendents. City board of directors seem to think they are running Apple or something, and, I can't believe any superintendent is worth 600k a year, plus a golden parachute of the same amount, and, lifetime medical.
As for the argument we can vote corrupt politicians out of office: That doesn't seem supported by much evidence, given the two party system we have. It seems
that even when we have the Republicans in office, they fail to do what they were voted into office to do. I think that, by it's nature, Washington and congress provides so many
huge chances to make incredible amounts of money, and perks, that once you get there, you don't want to upset the golden goose, just get your share and get out.
I've often felt that's Obama's plan: get 4 years, the benefits, and get voted out, and, you are set for life.
All 100% optional, and hardly a monopoly. I haven't given any of the people you referenced much (if any) of my money.
Stereodude
Not really a
As are all the things JTR complained about. If he doesn't like the salary Ford pays Alan Mulally, don't buy a Ford.
jtr1962
0
Actually, I do get annoyed, but not to the extent I get annoyed with no talent, no brain CEOs taking multi million dollar bonuses for doing nothing more than gutting a company to temporarily increase profits. I'm all for rewarding a CEO who actually grows their company as that takes real talent. I realize professional athletes need to be paid enough during their career to last them their lifetime once they retire. And I'm all for rewarding performance. However, what we pay athletes and celebrities has gone beyond the pale. Nobody needs to make even $5 million a year. Heck, I could live OK for the rest of my life on about $1.5 million ($500,000 to buy a house, then invest the balance for living expenses). I could live great with $5 million. In all honestly, if I were worth a few million now, no amount of money could motivate me to work. I'd really love to know what motivates people like Donald Trump when they already have more money than one can realistically use in 100 lifetimes.
In the end though, I do agree with what Dave said. Paying athletes or celebrities is entirely optional, so I can tolerate a certain inefficiency and/or higher price resulting from the outrageous salaries. I can't tolerate those things when dealing with a company selling necessities, or when dealing with government. I expect both to deliver goods/services in the most cost efficient way possible.
jtr1962
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I've opted out of buying cars altogether. For what they cost to buy and operate, I don't consider the benefits all that worthwhile.
Stereodude
Not really a
I'm not a big fan Ron Paul person, but he pretty much hit the nail on the head.
I think more than anything the system needs to be simple and transparent enough that we can actually have informed debate based on facts. I'm fairly certain that these jokers don't actually know the numbers much better than we do.
Even if it leads to inefficiency or is slightly unfair, the best thing we could do is simplify the system to the point where we could debate it properly. Of course, the politicians and special interests would hate for such a thing to happen, as it would put their dirty laundry and back-room deals out in the open.
1. Eliminate all tax breaks/deductions/deferrals/etc. Lower the tax rate to compensate if you like, but make it a number that everyone has to pay that we can talk about.
2. Make all laws/bills self-balanced. Make the source for the money (additional taxes/fees/cuts) spelled out along with what you want to accomplish.
3. Have one big pot that all federal income goes into. This is the number that we have to play with. No more.
4. Make all the budget items a percentage instead of a dollar amount. If the military budget is 35%, it is 35% of the number listed in #3 above. This does make long-term budgeting more difficult, as it is in a household. Deal with it.
Of course that is a dream world, but one can dream
Even if it leads to inefficiency or is slightly unfair, the best thing we could do is simplify the system to the point where we could debate it properly. Of course, the politicians and special interests would hate for such a thing to happen, as it would put their dirty laundry and back-room deals out in the open.
1. Eliminate all tax breaks/deductions/deferrals/etc. Lower the tax rate to compensate if you like, but make it a number that everyone has to pay that we can talk about.
2. Make all laws/bills self-balanced. Make the source for the money (additional taxes/fees/cuts) spelled out along with what you want to accomplish.
3. Have one big pot that all federal income goes into. This is the number that we have to play with. No more.
4. Make all the budget items a percentage instead of a dollar amount. If the military budget is 35%, it is 35% of the number listed in #3 above. This does make long-term budgeting more difficult, as it is in a household. Deal with it.
Of course that is a dream world, but one can dream
Stereodude
Not really a
This is already law. It's called PAYGO. The most recent version has been on the books since Feb 12th 2010 They just ignore it.
And there are plenty of ways around it. It may as well not exist.
5. No single bill can be more than 100 pages, a 1 page summary must be at the front, and any language in the bill that isn't mentioned in the summary should be struck down.
time
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While I appreciate your sentiment, that's really the problem that you're seeing now. Issues are way too complex for the average Joe so he throws up his hands and joins the Tea Party. It's no longer the 19th century. You can't dumb down an increasingly complex world just because your decision makers are too stupid. Because everyday people now believe they should have just as much of a say, that's extending decision making to people who are not at all equipped to do so, i.e. the populace. To be fair, that's because they no longer have faith in their representatives.
Some politicians are actually quite smart, some are amazingly stupid. Under the Westminster system, the smarter ones tend to be elevated to executive roles (ministers) and drive the legislative process. My understanding is that any congressman can and will amend legislation, which could be one of the standout problems.
A common mistake I see all through this thread is that everything can be reduced to black and white. There are a number of ways for a government to raise money, and it's best that they spread that collection to minimize impact on individuals. In most countries, the main components are a tax on company profits, personal income tax (usually with a range of marginal rates to allow for the extreme differences in affordability), and consumption taxes (the term VAT or Value Added Tax is the most accurate).
Some countries have a VAT as high as 20%, which I suspect distorts the economy. It certainly creates a strong incentive for avoidance, which increases the regulatory costs enormously.
Flat income tax just doesn't work - black and white again. Deductions are a problem because not everyone with legitimate business expenses is operating as a company. One proposed solution to cut down paperwork is to only allow expenses over a certain threshold to be claimed. However, I would like to differentiate expenses incurred in generating income from government 'incentives', which as a rule I think are completely inappropriate. Allowing a full deduction for lease payments on a Porsche would be just one example, Greg's sport example is another.
One of the disconnects in the US system is the separation of the executive from the legislature. This is not an issue under the Westminster system because bills are normally controlled by cabinet, which includes the treasurer and finance minister. In other words, unless the executive ignores Treasury advice, unfunded legislation won't get off the ground.
It really makes things too complex when you try to tie expenditure to individual income streams anyway.
I'm guessing this is where a lot of the problems come from, and based on some of the anti-IRS comments here, I'd say there's no way you're going to solve this soon. A single agency that is responsible for most revenue collection is clearly the only way to go.
You just fell into the same trap as the half-wits that tried this ambush. No-one will deal with the US government - including the military - if there's a chance they won't get paid. Or rather, pricing will reflect the risk ...
I like this one a lot. Despite my reservations about 'dumbing down', too many bills are packed with gibberish that courts then spend years trying to interpret. Of all things, legislation should be clearly written, preferably in modern, plain language. A one page summary is probably unrealistic, but you could at least include a clear description of what the legislation is intended to achieve, with the body checked for inconsistencies with that stated position.
Another thing I'd add is the requirement to repeal antiquated laws so as to keep a lid on the sheer volume of legislation in force at any one time.
I think we have web 2.0 to blame for this one. Once people could publish their cat food choice on the internet, they felt that their opinion on everything mattered. (not sure if I mean this as a joke or not)
I know a few of both (smart/stupid, local/federal), and everyone having their hand in every pie is indeed a problem.
It cannot optimally be converted to black and white, just as an image becomes less clear when it is converted to black and white. But I would argue that, as everyone (stupid and otherwise) is going to keep their hand in the game, we need to simplify the system to the point where those people understand or the system will fail. Similar to the complex financial tools during the banking catastrophe. During a Panetta Institute talk I went to last year, I heard Harvey Pitt (former chairman United States Securities and Exchange Commission) and Robert Reich (former United States secretary of labor) flat out say that they and the banks had no idea what they were doing, and what the consequences could be. We must accept a sub-optimal solution that can be easily grasped, or we run the risk of those responsible for the decisions not knowing what is happening (I would argue that we're there already).
The reason there is a deficit in the first place is that spending money is popular and collecting it isn't. As long as the cost can be postponed, it will be. Only if the cost must be presented in real-world terms as part of the deal will the populace grasp the trade off.
Pricing will reflect the risk. That risk should exist, and the price should reflect it. There is, however, a big difference between committing to large expenditures and then failing to pay versus not being able to commit to all the plans 100% in the first place. The first is criminal, the second is the same level of flexible planning that successful private businesses have had to deal with forever.
An addendum to my #5 would be that each law can only address one topic. No riders or pork. If the topic is too complex to be explained in a one page summary, it should be multiple laws anyway, with each getting a separate up-or-down vote.
time
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The US government has been borrowing money since 1917. Just like successful private enterprises, that's often essential. As a percentage of GDP, it's not even that high compared to many other countries. The difference is that this time, there's serious doubt that the nation can ever pay it off. That is, your capacity to trade your way out of debt is much worse.
This is where taxation is critical. You can either continue to borrow or get the citizens to pay; it's just not possible to cut your relatively piddling budget of 3.8 trillion enough to make a dent in that debt (although halving military expenditure would help). Especially since, as has been proven again and again, excessively deep spending cuts will kill your economy stone dead and reduce government income (taxation) even further, thereby increasing the debt. This death of a thousand cuts is already happening in Greece (doesn't mean I have even the slightest clue what to do about Greece).
See, when you increase taxation (up to a point), you're just moving money around in the economy. When you cut government expenditure, you're actually removing that money from the economy completely. A 20% reduction in public spending means a direct contraction of 5% in the US economy, which is huge. So you have to do these things slowly, or you'll kill the patient.
Amen to 1-5!
6.) We need to simplify our tax code. Flat tax for all people with an income over the poverty level. No special deductions like mortgage interest etc. In the case of mortgage interest, we should not be encouraging people to own a house if they 'need' this deduction to afford it. It'll never happen because the accountants in Washington would never let it but I can dream. It would be great to not even need a calculator to do your friggin' taxes!
I heard an interesting statistic on CNBC this morning, the top 1% of earners in the US have an effective tax rate of 18% while 51% of Americans pay no taxes at all.
We need to end this class warfare that members of government are creating to benefit their re-election aspirations.
Why a Balanced Budget was not a part of the Constitution in the first place I have no idea. Balanced Budget Amendment = Obviously Needed. How does someone disagree with something as logical as that?
Everything the government has been talking about seems to be enacted over a period of 10 years. That's seems like a good time frame to get serious reductions in goverment spending (i.e. waste). If we don't we WILL be the next Greece probably after the rest of Europe goes under.
6.) We need to simplify our tax code. Flat tax for all people with an income over the poverty level. No special deductions like mortgage interest etc. In the case of mortgage interest, we should not be encouraging people to own a house if they 'need' this deduction to afford it. It'll never happen because the accountants in Washington would never let it but I can dream. It would be great to not even need a calculator to do your friggin' taxes!
I heard an interesting statistic on CNBC this morning, the top 1% of earners in the US have an effective tax rate of 18% while 51% of Americans pay no taxes at all.
We need to end this class warfare that members of government are creating to benefit their re-election aspirations.
Why a Balanced Budget was not a part of the Constitution in the first place I have no idea. Balanced Budget Amendment = Obviously Needed. How does someone disagree with something as logical as that?
Everything the government has been talking about seems to be enacted over a period of 10 years. That's seems like a good time frame to get serious reductions in goverment spending (i.e. waste). If we don't we WILL be the next Greece probably after the rest of Europe goes under.
- Joined
- Nov 15, 2009
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- 667
I'm sorry, but I believe that the US tax system is ass-backwards. The poorest should outright be paying the lowest rates and the richest need to be paying the highest rates. This is regardless of capital gains or any other attempts at social engineering through the tax-code. There should be a maximum limit for all tax credits and deductions in each bracket to enforce the concept that the higher your income the higher the tax. Tax brackets should be automatically COLA'ed so that your tax rate won't increase because of inflation. There should be a fixed-rate national asset tax (like a property tax but covers all assets when a persons assets exceed an arbitrary X hundreds of thousands dollars).
The tax-code is just plain screwy when the less you earn and have, the more you pay in taxes.
The tax-code is just plain screwy when the less you earn and have, the more you pay in taxes.
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That's exactly the sort of thing I meant when I said tax deductions should not be 'government incentives'. You should only be able to claim expenses essential to earn your income, and nothing in excess of that. Mortgages are a living expense, not a work expense.
I believe this refers to federal personal income tax ONLY; they certainly still pay taxes.
You can't run either a company or a government without credit. Revenue is completely dependent on the health of the economy, so bad times lead to deficits which increases the borrowing requirements, good times lead to surpluses which decrease them. US government debt was last paid down as recently as 2001. Expenditure has exceeded income ever since, the icing on the cake being the bailouts (moving private sector losses to the government's balance sheet).
The other thing that everyone forgets is that we're only talking about the BUDGET figures, not the ACTUAL figures. There can be quite a difference between the government's stated aims and what forensics discovers up to two years later. This was a big problem under Bush, particularly for Defense, where their accounts could not even be audited, let alone qualified. You're talking slippage of 1/2 a trillion dollars or so each year. In other words, the relatively modest deficits were made up numbers.
The point is that you can balance the budget all you like, yet still wind up with a cash shortfall. Doesn't mean you shouldn't try, just that it's unrealistic to expect there to be no debt under any circumstances.
The CBO historical figures are freely available if anyone cares to read for themselves. The pattern is crystal clear. Reagan cut taxes (particularly company taxes) while increasing spending, so the deficit ballooned. The first Bush war wasn't such a big deal; it was short and partly funded by other countries. Clinton progressively increased the tax take while winding back defense expenditure by half, and the budget was brought back into balance. Bush cut taxes A LOT and then went on the mother of all spending sprees. Obama listened to Bernanke et al and committed the government to more debt, but was not allowed to even restore taxation to the previous level.
By 2007, total military expenditure was more than a quarter of the US government's outlays. You would have to assume that it's nudged $1 trillion since then. The rest of the world combined can't afford that.
Good point about the need for credit. I guess the process for requesting for debt limit increases covers that base although we have been much to liberal with that. That's one of the big reasons why we're in trouble.
99% of our elected officials are obviously not competant (or corrupt) as no business would be allowed or capable of running with the huge debt to positive cash flow ratio the US has had for such an extended period of time.
99% of our elected officials are obviously not competant (or corrupt) as no business would be allowed or capable of running with the huge debt to positive cash flow ratio the US has had for such an extended period of time.
Stereodude
Not really a
The poor do pay the lowest rates. They pay 0% or even negative rates when it comes to effective federal income tax rates. Exactly how much lower do you want it? As of 2008, the top 50% of taxpayers paid 97.3% of the taxes and the bottom 50% paid 2.7%. The top 10% of taxpayers (AGI >$113,799) paid 69.94% of federal income taxes. Don't tell me the rich aren't paying their fair share.
Sorry, but that's just not the case. The rich pay far more in taxes than the non-"rich". The bottom 47% of "taxpayers" don't pay any federal income tax. How is that fair?
I'm guessing your argument is based on effective tax rates. There are lots of legal deductions and tax shelters, like tax free municipal bonds (a favorite of Warren Buffet). If I could take advantage of them I would also. Frankly your argument doesn't hold a lot of water IMHO. Ultimately it doesn't matter what you set the income tax rates too. The US Federal tax yield is ~19.5% of GDP. When the top income tax rate was 90% in the 50's and 60's it was ~19.5% of GDP. When the top income tax rate was 28% in the late 80's / early 90's it was still ~19.5% of GDP.
Somehow tax theory on the tax happy side never accounts for human behavior. You probably think the gov't could have a 100% tax rate on income over $1 million dollars and that they'd actually collect money from it. If you told people any money they made over $1 million would be taxed at a 100% tax rate they'd all simply stop working once they made $1 million dollars and that 100% tax rate would collect nothing.
Stereodude
Not really a
But that's not good enough. It's not fair that they pay the same rate. We need to punish success!
Stereodude
Not really a
It is crystal clear but you need to take off your gov't colored glasses. The gov't doubled it's revenue take while Reagan was president. Unfortunately the democrats who controlled spending (Congress) tripled the spending.
What's clear from the last 30 years is:
- Cutting taxes stimulates the economy and leads to increased revenue to the gov't.
- Republicans like to spend money when they control congress and the presidency
- Democrats really like to spend money
- Democrats like raise taxes
- No matter how much money Washington gets they will spend more
Santilli
0
- Joined
- Jan 27, 2002
- Messages
- 5,451
My uncle was the head of Caltrans for years before he died.
After he retired, he was hired back as a consultant at twice his rate of pay by his buddies. Was he good? Yes, he had a photographic memory and graduated from Stanford, an engineer.
He would work up until he hit about 76K between himself and his wife, who was a public school teacher. At that point, he stopped working, waited for his wife to finish school, and went traveling all summer.
Why? The trip to Europe was deductible for teachers. A stretch, but,
perhaps a good idea.
AT that time, his income tax went from 33% to something absurd, like 60%, and, when you threw in the state of California taxes, approaching 75%. As he explained it, or people in that category did: They worked half the year to pay the government tax, and the second half they got to keep some of their money.
I think the Mexicans have it figured out. Come to the US. Work for 5-7 months, live cheap. Take what they save back to Mexico, live well during the summer. Come back, do it again.
They pay no tax. They get government benefits better then my retired teachers' benefits. Since our educational system is not setup for this model, they make a shambles of the California education system.
Given a choice in life styles, their style of life appeals to me more then mine...
Stereodude:
The problem with the Republicans in power, in both houses, and the presidency, something like 8 of the last near 100 years, is that when the Republicans are voted in, it is a time where the American people want radical change. That was the disappointment for many when Bush II had Congress. Congress and Bush 2 cut the rate of tax spending, but not enough, and, not to the likes of the American people. Yes, they functioned within the system, didn't kill the patient. However, the Democrats don't seem as constricted by things by law and the Constitution, and have made more radical actions, such as their absurd limits on the Second Amendment, etc.
In a nutshell: There is a growing feeling in this nation that the two party system is now an oligarchy. The two parties actions are not far enough apart to make any difference. When someone comes along that might actually make change in a Constitutional direction, and against corruption, the media, and government agencies crucify them, ala Sarah Palin.
The media circus, owned by the very rich, will eventually become much like the little boy that cried wolf in the eyes of the American people. I believe the Tea Party will become stronger, and people will stop believing the bullshit the media puts out about the party, and the people in the party. I wonder what the media had to say about the founding fathers prior to the revolution?
David hits on a very important point. Our Constitution requires a reasonable belief in participatory government, and, requires time, effort and belief that the system works. If you start to look at the actions of our government, you see a pattern of action that attacks
faith in the government, faith in the perception that you can participate and make a difference, and deprives you of the free time to study and make informed decisions, and participate in the government. By these actions we have become an oligarchy. People
are so busy scrambling to make ends meet, that they don't have time to do anything about the government. On top of that, the system has become one where you can't effect much.
I'm not sure if DD is right, but, I am hoping the web changes a bit of that. It certainly makes it possible to petition your politicians.
I do wonder if the government makes it so that it is difficult to do so, intentionally. It also makes it easier for the average person to get their hands on court and Congressional records and preposals, not to mention laws.
After he retired, he was hired back as a consultant at twice his rate of pay by his buddies. Was he good? Yes, he had a photographic memory and graduated from Stanford, an engineer.
He would work up until he hit about 76K between himself and his wife, who was a public school teacher. At that point, he stopped working, waited for his wife to finish school, and went traveling all summer.
Why? The trip to Europe was deductible for teachers. A stretch, but,
perhaps a good idea.
AT that time, his income tax went from 33% to something absurd, like 60%, and, when you threw in the state of California taxes, approaching 75%. As he explained it, or people in that category did: They worked half the year to pay the government tax, and the second half they got to keep some of their money.
I think the Mexicans have it figured out. Come to the US. Work for 5-7 months, live cheap. Take what they save back to Mexico, live well during the summer. Come back, do it again.
They pay no tax. They get government benefits better then my retired teachers' benefits. Since our educational system is not setup for this model, they make a shambles of the California education system.
Given a choice in life styles, their style of life appeals to me more then mine...
Stereodude:
The problem with the Republicans in power, in both houses, and the presidency, something like 8 of the last near 100 years, is that when the Republicans are voted in, it is a time where the American people want radical change. That was the disappointment for many when Bush II had Congress. Congress and Bush 2 cut the rate of tax spending, but not enough, and, not to the likes of the American people. Yes, they functioned within the system, didn't kill the patient. However, the Democrats don't seem as constricted by things by law and the Constitution, and have made more radical actions, such as their absurd limits on the Second Amendment, etc.
In a nutshell: There is a growing feeling in this nation that the two party system is now an oligarchy. The two parties actions are not far enough apart to make any difference. When someone comes along that might actually make change in a Constitutional direction, and against corruption, the media, and government agencies crucify them, ala Sarah Palin.
The media circus, owned by the very rich, will eventually become much like the little boy that cried wolf in the eyes of the American people. I believe the Tea Party will become stronger, and people will stop believing the bullshit the media puts out about the party, and the people in the party. I wonder what the media had to say about the founding fathers prior to the revolution?
David hits on a very important point. Our Constitution requires a reasonable belief in participatory government, and, requires time, effort and belief that the system works. If you start to look at the actions of our government, you see a pattern of action that attacks
faith in the government, faith in the perception that you can participate and make a difference, and deprives you of the free time to study and make informed decisions, and participate in the government. By these actions we have become an oligarchy. People
are so busy scrambling to make ends meet, that they don't have time to do anything about the government. On top of that, the system has become one where you can't effect much.
I'm not sure if DD is right, but, I am hoping the web changes a bit of that. It certainly makes it possible to petition your politicians.
I do wonder if the government makes it so that it is difficult to do so, intentionally. It also makes it easier for the average person to get their hands on court and Congressional records and preposals, not to mention laws.
- Joined
- Nov 15, 2009
- Messages
- 667
You just made my point by saying "If I could take advantage of them I would also".
Really how do those rich people legitimately not pay any tax if they are paying at a higher rate? There are large scale differences between rich people and normal or poor people. The rich get their income from investments while normal to poor work to get money. That creates an ability to tax the rich at a different rate than the poor. If they do it right they get to use the long-term capital gains rate at 15% and that is before any deductions and tax credits. Poor people have to make less the $35,000 to get a rate that low on their "normal" income. The rich get to invest in tax free investments like municipal bonds to avoid having to pay any state or local taxes. Those poor poor always have to pay their state taxes because their income comes from working rather than investments.
You're going to find that in general the poor rent housing while the rich own and that means the rich get all sorts of deductions that the poor don't have access to. You know like deductions for interest, tax credits for energy efficiency. Tax credits for retirement savings -- The poor can't afford to save for retirement for it takes it all just to keep food on the plate and a roof on their head. The rich get to deduct for investment losses (gimmie a break -- They took a risk and now those losses gets reimbursed); The poor can't afford high efficiency cars that get tax credits.
Really, the tax system is biased and promotes taxing people with money at lower rates then those without. It's ass-backwards.
jtr1962
0
And to show how ass backwards the tax system is, I'm ironically in pretty much the same position now making about $6K a year from self-employment. Right now, I don't pay any income tax, but pay Social Security tax at the rate of 15.3%. That would be a huge hit for someone making so little but Federal and NYS EIC offset a lot of it, so the effective rate comes to something like 5%, which is at least manageable. I also get a NYC school tax credit of $62.50 which offsets some of that 5%. Because of the Making Work Pay tax credit in 2009 and 2010, I actually got back slightly more than I paid, but I won't count that because I doubt this will continue once the economy improves. So let's say my effective tax rate is around 4%, or maybe about $240 on an net business profit of $6000.
Now let's say I make twice that, or $12000. Still not a lot of money, but now the EIC is phased out. I pay 15.3% on all of the $12000. That's about $1836 or roughly $1600 more than I pay now. I also start paying some Federal, state, and local income taxes. Together this might come to another $1000. That brings the extra taxes to $2600 just for making another $6000. That's already a marginal rate of 43% but we're not done yet. NYC's unincorporated business tax will kick in. That's 10% of the entire $12000. And then there's the MTA regional access tax. Not sure of the rate, but I think it's at least a few percent of total business income. So you're probably talking another $1500 in taxes added to the extra $2600 I'm already paying. Let's just round it to $4000 for simplicity's sake. That's an effective marginal tax rate of 66.7% going from $6000 to $12000. I would be doing twice as much work, but only getting 1/3 more income. People ask me why I don't bother trying to grow my business. I just tell them it doesn't pay unless I can earn way more because of the marginal rates (i.e. going from $12K to $18K the marginal rate drops to about 45%), and for various reasons including CTS I really couldn't earn much over maybe $12K no matter what. Another 5K-6K more would be nice but the tax structure doesn't make it worthwhile to earn much above about $7K from self-employment. Not even millionaires have marginal rates as high as this. NYS and NYC make things even worse between their income taxes and the stupid "extra" taxes they levy on businesses making over a certain amount. It's only a matter of time though before ALL states need to levy exorbitant taxes like these if they don't stop spending money like it's going out of style.
First order of business if we wish to reform the tax structure is to eliminate regressive taxes like Social Security. Have the same structure as the income tax, where you pay nothing on maybe the first $10000 or so of income, and then pay increasing marginal rates up to the current 15.3% as your income goes up. And to offset the lower amounts most people will pay, remove the earnings cap on which FICA tax is taken out. The idea is if the disincentive to earn more is removed for people like me, then we'll make more and spend more. This in turn would generate taxes to pay for the reduced Social Security taxes. Generally, if you cut taxes on the poor and middle class, rather than the rich, there's a good chance most of that money will immediately be put right back into the economy.
Santilli
0
- Joined
- Jan 27, 2002
- Messages
- 5,451
Here is a slightly different take on todays' events:
"From: Reince Priebus, RNC Chairman
To: S.........
Subject: YOU Stopped the Obama Tax & Borrow Bailout
Dear Gregory,
Do you remember where America was just one year ago?
The Pelosi-Reid-Obama agenda was doing a daily dose of damage to our American economy, destroying jobs with crippling regulations, oppressive spending and brand new taxes.
If that wasn't enough, the Democrats passed a government takeover of healthcare, spending record amounts of money we didn't have on a program we didn't want.
And to top it off, they raised taxes on hardworking taxpayers to pay for an $800 billion dollar stimulus -- claiming that they should have spent even more.
Maybe they thought they could get away with it. For two years, they did.
But on Election Day 2010, you stood up -- millions strong -- and said enough is enough.
You -- and millions of other Americans like you -- held them accountable. The Tea Party and millions of Conservatives led the charge from all 50 states right into the heart of Washington.
You didn't just change the debate in Washington. You changed the results. Today's passage of the Budget Control Act shows the impact you've already had... and how important it is to keep the pressure on Washington for the next 15 months.
Without you, Nancy Pelosi would still be Speaker Pelosi. She would have delivered President Obama exactly what he demanded: a blank check for unlimited spending, new taxes on American families, new regulations on job creators, and a debt ceiling increase with no strings attached.
Make no mistake: President Obama wanted hardworking American taxpayers to bail him out once again. He wanted YOU to pay for his failed stimulus and Obamacare, borrowing more money on your back to pay for them. He wanted you to sacrifice so that Washington wouldn't have to.
But because you kept the heat on Washington, Republicans in the House and Senate had the backup they needed to stand up and say NO to the Obama Tax & Borrow Bailout.
While the Budget Control Act is far from perfect, it is a step forward. The bottom line is that until we vote President Obama and his Democratic allies in the Senate out of power, we won't be able to truly change the culture in Washington and deliver the results Americans like you demand.
But think about how far we've come. Rather than trampling on the taxpayers, as the Democrats did when they controlled the House, this bill showed real respect to hardworking taxpayers. The legislation:
Stopped ALL of the tax increases Obama, Reid, and Pelosi demanded;
Forced the Senate to pass its first budget in two years, delivering Harry Reid a dose of accountability;
Held every politician accountable to vote yes or no on a balanced budget amendment; and
Protected the economy while demonstrating a commitment to reducing the debt.
This isn't the end of bringing spending discipline to Washington. It's just the beginning - and it wouldn't have happened without you.
Just yesterday, Joe Biden called the Tea Party "terrorists."
So today, I am writing to thank you for being a patriot. I have so much respect for you. I respect the work you do day by day, year by year, to defend freedom and promote opportunity. Your dedication to our cause is saving America.
Keep it up. Don't quiet down. Your voice cannot be ignored. Demand more from Washington. Demand more from those who represent you. At the RNC, we hear you - and we want to amplify your voice in Washington.
Over the next 15 months, all conservatives need to come together and focus on the only way to really fix what's wrong with Washington: voting Obama out of office and taking back the Senate. We are ready for battle. Are you?
Usually this is the part where we ask for money. Not today. In the last 24 hours you have given America something much more important than a donation. You have helped America take a step away from servitude and a step closer to freedom. We are proud of you. You are our heroes. You are true patriots.
You are Great Americans.
God bless you.
Sincerely,
Reince Priebus
Chairman, Republican National Committee "
Seems things have changed a bit...
"From: Reince Priebus, RNC Chairman
To: S.........
Subject: YOU Stopped the Obama Tax & Borrow Bailout
Dear Gregory,
Do you remember where America was just one year ago?
The Pelosi-Reid-Obama agenda was doing a daily dose of damage to our American economy, destroying jobs with crippling regulations, oppressive spending and brand new taxes.
If that wasn't enough, the Democrats passed a government takeover of healthcare, spending record amounts of money we didn't have on a program we didn't want.
And to top it off, they raised taxes on hardworking taxpayers to pay for an $800 billion dollar stimulus -- claiming that they should have spent even more.
Maybe they thought they could get away with it. For two years, they did.
But on Election Day 2010, you stood up -- millions strong -- and said enough is enough.
You -- and millions of other Americans like you -- held them accountable. The Tea Party and millions of Conservatives led the charge from all 50 states right into the heart of Washington.
You didn't just change the debate in Washington. You changed the results. Today's passage of the Budget Control Act shows the impact you've already had... and how important it is to keep the pressure on Washington for the next 15 months.
Without you, Nancy Pelosi would still be Speaker Pelosi. She would have delivered President Obama exactly what he demanded: a blank check for unlimited spending, new taxes on American families, new regulations on job creators, and a debt ceiling increase with no strings attached.
Make no mistake: President Obama wanted hardworking American taxpayers to bail him out once again. He wanted YOU to pay for his failed stimulus and Obamacare, borrowing more money on your back to pay for them. He wanted you to sacrifice so that Washington wouldn't have to.
But because you kept the heat on Washington, Republicans in the House and Senate had the backup they needed to stand up and say NO to the Obama Tax & Borrow Bailout.
While the Budget Control Act is far from perfect, it is a step forward. The bottom line is that until we vote President Obama and his Democratic allies in the Senate out of power, we won't be able to truly change the culture in Washington and deliver the results Americans like you demand.
But think about how far we've come. Rather than trampling on the taxpayers, as the Democrats did when they controlled the House, this bill showed real respect to hardworking taxpayers. The legislation:
Stopped ALL of the tax increases Obama, Reid, and Pelosi demanded;
Forced the Senate to pass its first budget in two years, delivering Harry Reid a dose of accountability;
Held every politician accountable to vote yes or no on a balanced budget amendment; and
Protected the economy while demonstrating a commitment to reducing the debt.
This isn't the end of bringing spending discipline to Washington. It's just the beginning - and it wouldn't have happened without you.
Just yesterday, Joe Biden called the Tea Party "terrorists."
So today, I am writing to thank you for being a patriot. I have so much respect for you. I respect the work you do day by day, year by year, to defend freedom and promote opportunity. Your dedication to our cause is saving America.
Keep it up. Don't quiet down. Your voice cannot be ignored. Demand more from Washington. Demand more from those who represent you. At the RNC, we hear you - and we want to amplify your voice in Washington.
Over the next 15 months, all conservatives need to come together and focus on the only way to really fix what's wrong with Washington: voting Obama out of office and taking back the Senate. We are ready for battle. Are you?
Usually this is the part where we ask for money. Not today. In the last 24 hours you have given America something much more important than a donation. You have helped America take a step away from servitude and a step closer to freedom. We are proud of you. You are our heroes. You are true patriots.
You are Great Americans.
God bless you.
Sincerely,
Reince Priebus
Chairman, Republican National Committee "
Seems things have changed a bit...