Wait, how is that lame???? :timeout:

Cutting taxes? Yes, it's my money, not yours. You want to contribute extra to the federal govt, go for it. You have no right to induce others to do the same.
Cutting spending? Sure, who says there's not enough govt spending?
Balance the budget? :doh:

@gimpy
No, it cuts taxes for them...but of courseshifts it to other taxes so they end up paying more taxes but different ones, same with the healthcare its just juggling.
What strikes me is the accelerated cuts they propose in the WOT, have the publicans gone soft on terror?

@ whom it may concern:rotfl2:
Why do I get the idea that August actually hasn't read the document?
I suppose it goes with the problem of Haplo not seeing the document for what it is.

@Neal
Because.
They don't cut they just shift
They don't reduce they just move.
Balance.....yeah heard that one before

@Mookie
Be fair, it is in essence really from the heritage foundation. It is based on their commission and is their interpretation of the model they bought.

I was using bullet points to summarize a 70+ page document. The GOP plan uses these three familiar slogans which no one can really say they are against, but which mean nothing in practice. Let's look at the plan.

1. Tax Cuts: the theory behind cutting taxes is that individuals/businesses will use the savings to reinvest and create additional jobs and economic growth. This has been tried under Reagan and Bush jr, but no one can say the economic situation in the USA has been growing increasingly better in the past 30 years. The Republican solution is usually to say that we have to try even deeper cuts.

However, the reality is that most economic activity in the world is controlled by multinational corporations which already pay little or no tax since they can shift most of their taxable income to tax havens. They shift their production to low cost jurisdictions which the USA no longer is. A tax cut would not bring them back to the USA.

2. Cutting Spending: it sounds good, but there are no real cuts in the GOP plan. Real cuts means cutting programs or services which does not appear here.

3. Balanced Budget. Just like Mom&apple pie, no one can be against this, but if you cut taxes without really cutting spending, how can you balance the budget? The only way, which is what they do here is by grossly overestimating future revenues while underestimating future spending.

Steve, that's a false choice argument. The opposite of saying "tax cuts fixes everything" is not advocating a 100% tax.

I'll explain why in a roundabout way of explaining the idea to kraznyi_oktjabr: the idea that lowering taxes is the answer is based upon the Laffer curve:

http://www.timswineblog.com/images/laffer%20curve.gif.

Proponents say that by reducing the tax burden on people and businesses, they'll have more money in their pocket to spend on things, which boosts the economy and makes everyone richer. (In the diagram above, you're moving from "Point B" to the top of the curve, closer to the "Equilibrium point", thus increasing revenues.)

There are numerous problems with such an economic model - it sounds legit on the surface, but when you start examining history and budgets, it falls apart. Too boring to go into here.

The problem is that Republicans will always tell you that we're in the left side of the curve where tax cuts will increase revenue. Reagan dropped the top tax rate from 70% to 28%. But yet they still tell you we need to drop it further. They ignore their own model - at some point dropping taxes will end up in reduced revenues. (going from Equilibrium to "Point A") But that point is conveniently swept under the rug. :doh:

First I don't see myself to be right nor you to be stupid. What I write is my opinion and does not assume other posters to be mentally retarded idiots.

I don't mean that higher taxes fixes everything - you can raise taxes to 100% and still I wouldn't be surprised find out that government is forced to take loan to cover expenses. This is because politicians always try to give everyone everything to get as much votes as possible which is expensive. Problem would also be that there would be no point for private business to have factory or other profit making activity in country where government would take all profit and leave expenses to company.

Reason for my question was that I just don't get it why for some "lower taxes" seems to be magic wand which fixes everything from economy to your aunt's marriage or your dog's diarrhea. Economy does not revolve around taxes only. For corporations lower taxes are ofcourse nice benefit but they are not only factor considered when they decide where to place their new shiny factory will be placed. Other important factors are costs from employees like wages & social security expenses and materiel availability & cost to mention few examples.

In media (atleast when watching from here Europe) taxes seem to play very large part in American policy discussion although it is just one part of package to consider if your country wants to remain competitive (which I assume to be goal).

I'm not perfect and I don't say that I'm absolutely correct in this. If I'm wrong then I'm happy to get constructive feedback. Btw what you mean with "my problem"?

Looks like the ol' Heritage Foundation is already monkeying with the numbers.

Yesterday they claimed they were using a 2.8% unemployment rate in their projections - a rate that's never been that low in all of history (we'll not get into what that would do to inflation). Today...that assumption has magically disappeared from the documents. :rotfl2:

Forgive the Krugman link, but he's got links to both PDFs that the Heritage Foundation released - both yesterday's and today's that's been through the magical eraser treatment:

http://krugman.blogs.nytimes.com/201...gman&seid=auto

How on Earth can you honestly say that this is objective and non-partisan?

I would be all for corporate tax cuts if they worked for America, they don't. They'll use those cuts to get even richer in a global economy where
doing things cheap at the expense of others works best. Corporations are making good profits in a terrible world economy, do they really need to pay less taxes?

exactly. Cutting corporate taxes here is a farce. We can never make goods as cheaply as India, china, or any other 3rd world nation. Our workers simply cannot survive on those wages...so really, cutting their taxes isn't really a job creating measure, its a profit creating measure because even with lower taxes they will still outsource to Asia. Im sure even if we did some kinds a plan of getting rid of corporate taxes if a company only employed legal Americans, it would still be cheaper to go to china.

Steve,

I was quite ready to look at the GOP budget objectively and I am not one to mock my opponents in debate. In my day job, I analyse financial statements and reports all the time and know what to look for. This is not a budget per se, but simply a political document.

A lot of things dont add up. They say they want to cut spending, but never mention specific programs to cut. Most of the savings would seem to come from cutting out fraud and mismanagement, but that could not account for more than say a 5% savings. Despite that, they still have spending remaining at around 20% of GDP out to 2035-2040.


On taxes, the GOP wants to cut taxes and say the tax cut would have the following benefits:

However despite the tax cuts, they have government revenue as a % of GDP increasing from 17.4% in 2012 to 18.3% in 2020. How can the % go up if the tax rate is going down? They could presume that a higher percentage of the population will enter the workforce, but that would require an explanation of what demographic factors would account for that.

On the other hand, the GOP is also asking for a Tax Reform to close "loopholes" at the same time as they reduce taxes. If the overall effect of reform is to increase the taxable income of households and therefore the tax bite, that would account for the increase, but that would be a disguised tax increase, not a tax cut. This would also contradict their listed benefits (see above).

They also have the budget switching to surplus after 2020 without explaining how that would happen.

I am quite willing to discuss this document, but lets be clear on what it is: it is the political manifesto of the GOP. It is not a government budget.

@Bilge Rat
on your fraud and mismanagement section for savings it must also be considered that this really means more expense and bigger government.

They also used an unemployment rate of 2.8% in their analysis (the line that says so has since been deleted) and they say that 2.5mm more jobs will be created, but yet the numbers for wages and salaries and inflation are about equal to the President's plan. Explain how you will achieve full employment below what most will argue is the natural rate of unemployment due to general and normal turnover in the labor market (4-5%)? Explain to me how adding 2.5mm more workers to an economy will not result in wage inflation? Explain to me how wage inflation will not lead to CPI inflation?

These numbers make absolutely no sense. It's smoke and mirrors.

There you have the solution, the economy will be fixed with a new tax on smoke and mirrors

good point Mookie, the last time the U.S. unemployment rate dipped below 3% was in ....1953.

Maybe we'll get lucky and the Federal government shutdown will make everyone realize they're not as vital to our continued existence as they like to make themselves out to be.

when the top tax rate was....drumroll.....93%

Maybe the shutdown will last, then people can celebrate the affect on veterans care, the tending of such trivial things like national museums and monuments, the loss of tourism and of course problems with travelling, I look forward to the complaints about unsecured borders and why there is a lack of police on the streets.
Now of course some of those are instant impacts as "essential" workers can continue working without pay though can still recieve benefits, others are more longer term impacts.
I would love to see the teabaggers jumping around boasting of how they stopped the government putting new border agents down south to stop the mexican horde:rotfl2:

US citizens are very well armed. If there were no government and no law then the problem of immigration might get dealt with quite quickly by those who have strong feelings on the matter.

Do have even the slightest clue how the tax code works (and did work)?

Tax brackets tax all adjusted income above a certain value. So you have a 95% top marginal rate on, whatever, income over 1M$. That means that the last dollar before 1M$ is taxed at the next lower rate, and so on.

In addition, when the tax brackets were higher, the loopholes were vastly greater. There were also like 25 tax brackets. All you need do is look at US tax revenues as a % of GDP. It varies in a range of high teens to ~20% of GDP. The top marginal rate apparently had nothing to do with total revenues. In point of fact, the "rich" pay a higher % of taxes actually collected than ever.

So Ryan's talk about limiting spending to 20% of GDP is entirely reasonable. History shows that this is in fact slightly above total federal revenues. Adjusting tax rates should certainly be on the table. Alternately, scrapping the current tax code which is built to intentionally be complicated. It is full of pay offs as "incentives." Just set a flat tax designed to put 20% of GDP into the coffers.

Medicare and SS need to be cut.

I could promise top give you, gimpy, $100,000 in a week if you give me $10,000 today. Would you jump for joy? Why, when I don't have 100 grand to give you? So 1 week from now, I'd become persona non grata at subsim, and you get nothing—in fact you are out 10 grand. What if Neal convinces me that SS is so cool that maybe I could give you something, and I could stay around... so I offer you $50,000 for your 10 grand, instead. Do you take it, or whine that I owed you more, and get nothing?

That's where we are as a country. The entitlements are ridiculous promises that cannot be kept. If the country goes the way of Greece/Spain/Portugal, the people counting on SS/MC will be SOL. Ditto if we go the way of Argentina (hyper-inflation). Bottom line is that someone has to get off their ass and propose budgets that actually deal with the problems. That means reducing spending.

So far we have Ryan's plan. That's it. The administration and the Dems have as the plan to spend 1.2 trillion per year more than we have, then crow that it's 100 billion less than it could've been. That's it, that's their plan.

Look at the current dems. They owned both houses, and neglected to do their job last year and make a budget. THAT is why there could be a "shut down." Had they done their job last year when they controlled the entire government, no impasse now. Instead, they are bent about cuts that are chump change compared to their own vast overspending. If they can't pass 60 B$ in cuts, how can they address ~1.5 trillion in needed cuts (not over 10 years, but THIS year)? They can't because they have no desire to cut spending. Not now, not ever.

Tater,

I dont disagree. Limiting spending to 20% of GDP is entirely doable since it was more or less the historical average.

What is not doable is: limiting spending to 20% of GDP, plus cutting taxes as well and expecting to balance the budget.

There is no magic formula. To balance the budget, you have to cut spending, which means cutting programs or services and raise taxes to generate revenues.

There is no free ride, every other country in this situation has had to bite the bullet and make tough decisions.

Tax revenues are already very nearly 20%.

There is no need to mess with them unless you scrap them and start over. The tax that most needs reduction right now is the corporate income tax. Slash it to a reasonable level, but eliminate all loopholes so that they actually pay.

Raising the payroll tax (or cap), OTOH, should be out of the question. SS/MC need to come from the payroll taxes as they are. If there is a shortfall, cut benis. It's not fair for people who paid in at under even the current 15.3% FICA to expect workers now to shell out more, when all the money they paid in was already spent—on themselves.

Right now, what is the democrat plan, exactly? Spend ourselves into solvency?