The proposed 2012 budget...

[gimpy117]

Originally Posted by mookiemookie

"When the people shall have nothing more to eat, they will eat the rich." - Jean-Jacques Rousseau

that would be a pretty small meal considering that how few hold so much in this nation.

Ironically though, Cannibals will eat somebody who they feel is doing harm to the community.

Coincidence?

Originally Posted by tater

My point is that calling forth old, higher tax rates is a BS argument since the marginal rates tell us exactly nothing about what people actually paid. Bottom line is that under those higher rates the taxes collected as a percentage of GDP was in fact LOWER than now.

I know right! screw History when it doesn't fit my ideology. Wheres a big black marker when i need one? Why can't I just make up theories and not base them off of past events?! man the past is such a Debbie downer.

Nah... I rather think it's sad.

Perhaps it wouldn't have been so bad if the document wasn't what it was.

[August]

Originally Posted by tater

Gimpy, you entirely missed my point. Of course it was not just Kerry. When the rates were topped at 93%, NO ONE payed that much. I'd wager that the average effective rates are virtually identical.

My point is that calling forth old, higher tax rates is a BS argument since the marginal rates tell us exactly nothing about what people actually paid. Bottom line is that under those higher rates the taxes collected as a percentage of GDP was in fact LOWER than now.

Total government spending then was around half of now as a function of GDP. The farther back you go in US history, the less total spending was.

On topic, Ryan suggested a spending cap at 20% or GDP. This is more than reasonable, heck to me it is too high. Still it's a good suggestion. Also the basic premise of his plan is good. We do something now or watch it crash and burn. Take your pick.

QFT

[August]

Originally Posted by gimpy117

Ironically though, Cannibals will eat somebody who they feel is doing harm to the community.

Yeah I'm sure that Jeffery Dalmer thought his victims were doing harm to the community.

[Armistead]

Originally Posted by tater

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?

I've said 100 times here, corporations don't care about the tax as long as they can buy regulation/loopholes. Both parties have been behind the loopholes, but the GOP are the big players. Everytime they've lowered corporate taxes, we got more loopholes not less, you think I would believe
them again. Let's get rid of all the loopholes first, then we can talk lowering the rate.

I cringe when I see corporations giving 300-600 million dollar stock options to CEO's, they generate hefty tax deductions.

Obama was right when he said.

"There are so many loopholes that have been written into the tax code...that we actually see our businesses pay effectively one of the lowest tax rates in the world."

They pay about 25% at best. Has it created more jobs, built our economy, nope? It's creating a two class economy

In the end it's a stupid smoke and mirrors game. I agree we need spending caps, but again, let's see what they choose to spend on. As I understand this is just a cap, later behind closed doors they'll decide what to spend on what.

[tater]

I agree. Actually the US corporate tax system is more like the old income tax system when it had higher rates, and far more loopholes.

That's why I said up the thread that the US should pass a very l;ow corporate rate, but with zero loopholes. 14 or 15%, flat.

BTW, I think that the rate should apply to churches as well. The "gentleman's agreement" that churches will not engage in ay political activity has always been BS. As such, I don't think they meet 501c3 (note that this applies to any entity that is at all partisan).

Anyway, you cannot compare income taxes from the past without a heavy weighting applied, as well as good data on what the actual effective rates were. The weighting applies to tax revenue as a % of GDP weighted to spending. For a long time it was thought enough for the federal government to spend ~1% of GDP per year. It's past 20% now. Even under FDR it was mostly under 10% of GDP.

SPENDING is the problem, not taxation. Cut federal spending to 10% of GDP, and taxes can be far lower. The pitch to democrats can simply be "we want a New Deal, exactly the same as FDR had it!" (don't tell the hoi polloi that this means hacking spending by over a factor of 2, just pitch it as Rooseveltian socialism).

This is easy to accomplish. ~2/3 of spending is "entitlements." Cut entitlements by 75%, and you've just halved the budget—and you'll still be spending far more than FDR did on social programs.

That's why I said up the thread that the US should pass a very l;ow corporate rate, but with zero loopholes. 14 or 15%, flat.

Which would be bad for business, "loopholes" are there for a reason, you need to stop abuse of "loopholes" not close them.
Passing a low corporate rate will achieve very little, there is always somewhere which will offer a lower rate.

So you know what that means don't you...more government and more regulation
The very things they say they need less of.

[tater]

Originally Posted by Tribesman

Which would be bad for business, "loopholes" are there for a reason, you need to stop abuse of "loopholes" not close them.
Passing a low corporate rate will achieve very little, there is always somewhere which will offer a lower rate.

So you know what that means don't you...more government and more regulation
The very things they say they need less of.

No loopholes.

Loopholes are there as payback. The US tax code is so large no one understands it. Lawyers specialize in segments of it (I know a few tax attorneys). They also exist because the rates are too high. The base US rate is very high because they know there are a million loopholes and no one pays the base rate.

That's why you pick a low rate, then stick to it. Loopholes are not "abused," they are used as intended. Eliminate loopholes entirely, but set a rate that is fair.

Total corporate profits are what, around 1.5 trillion dollars? That means that 15% would generate 225 billion. Corp income taxes during the Bush admin (collected) were higher than right now, at over 300 billion. Assuming our 1.5 trillion profit (~10% of GDP), this means that maybe the corporate rate should be a little higher than 15% (I just picked a number). At 20%, flat, we'd be looking at ~300T$.

There is no good reason for tax loopholes, IMO. Better to design a good tax to start with, and avoid the unfairness that comes from one business getting a break while another does not.

That means LESS regulation, and fewer tax collectors since no one has to determine who falls into the special class of payers that get a subsidy. The same applies to a flat income tax.

Note also that this creates a more predictable business environment. You can easily tell what your tax liability should be.

Loopholes are not "abused," they are used as intended.

You have problems understanding some very basic concepts on tax and business.

There is no good reason for tax loopholes, IMO.

That shows you have very little understanding of what they are.

[tater]

Originally Posted by Tribesman

You have problems understanding some very basic concepts on tax and business.

No, I don't. The loopholes were specifically created to incentivize certain businesses—often (always?) as payback by politicians. Pol A will vote for a certain bill in return for votes to add a new tax code that allows the principle employer in his district to pay lower taxes. That is exactly how such loopholes are created.

That shows you have very little understanding of what they are.

The good reason would be (as I said) incentives. Economists love incentives, but they are poorly understood in reality, such that they always have unexpected consequences. Such unexpected consequences are NOT "abuse." In fact, there should be no unexpected consequences—they know everyone who possibly can will take advantage of every possible loophole. That is a given, it's why tax attorneys are on staff for every major company (and retained by every smaller one).

I think that a fair tax system eliminates the need for incentives. I also think that incentives are bad in general. If, for example, "green" energy is viable, then it does not need to be incentivized. It should sink or swim on its economic merits, not based on government subsidy by " tax incentives."

BTW, there is a reason why some companies get to use the loopholes who congress didn't mean to. It's because congress cannot single out specific businesses. They want to (because of the political payback/give-and-take mentioned above), but the code must be written to look like it doesn't single anyone out. So they can give a break for making widgets of a certain material using a certain process, thinking that only their target firms will get the break, but then another type of firm figures out they can alter what they make to fit the broadly written law, and then they get it too.

[tater]

A couple known examples of "abuse" I can easily remember are for import duties. The US has a lower tax rate (significantly) on cotton garments than "man-made" fabrics. Garments must be over 50% cotton to get the better tax. Poly stuff, OTOH, is cheaper. So what the Chinese (largely, though others as well) do, is they like to make stuff with less cotton than required to get the tax break, while still using the cheaper poly at a higher % in the blend. Over millions of garments, the small savings by making a few % more poly is gravy to them. As a result, stuff requires testing to make sure it is over 50%.

Another is toys. TOys have no duty. Bedding does. Wonder why they have bedding called "pillow pets" (pillow that look like stuffed animals)? No duty, but as bedding they get picked up by stores that would not sell stuffed animals.

I don't consider the latter abuse, though faking a higher cotton content on the label IS abuse.

[Platapus]

When will we realize that since it took us decades to get into this mess (both parties are equally guilty) it may take decades to get us out.

Unfortunately, that requires the political parties to commit themselves to working for the country and not for their party. There goes *that* fantasy.

A series of small incremental changes allowing time for the economy to adjust is the solution, in my opinion

[Bilge_Rat]

I saw an interesting comment on the Politico site that just like the Democrats made the mistake of thinking thay had a "mandate" to reform health care after 2008, the Republicans now think they have a "mandate" to cut spending.

reining in spending is a laudable goal, but far from a priority when the USA is in the worst recession since the Great Depression. The number one goal now is getting the economy back on its feet.

The housing market in the USA has hit its lowest prices in 9 years. Up to half of homeowners in certain states owe more on their house than its worth. Many economists think it may take 10-20 years, if ever, before all the excess housing stock is absorbed, all the while dragging down any potential recovery.

And why are the Politicians threatening to shut down the government? over whether they should cut 30 or 40 billion dollars out of last year's budget. Spending for 2010-11 is budgeted at 3,500 billion dollars, so 30 or 40 is only 1%.

[mookiemookie]

Originally Posted by Bilge_Rat

And why are the Politicians threatening to shut down the government? over whether they should cut 30 or 40 billion dollars out of last year's budget. Spending for 2010-11 is budgeted at 3,500 billion dollars, so 30 or 40 is only 1%.

Exactly why I posted that Onion article in the beginning of this thread. None of the proposals do anything to address any of the spending or debt problems they say they do. Apparently the last minute negotiations between both sides of clowns came down to bill riders such as defunding support for Planned Parenthood (which is completely stupid no matter which side of the abortion debate you fall on as PP's goal is to prevent pregnancy and thus the need for abortions) and minuscule things that DON'T MATTER and will not have ANY meaningful effect on the national debt or spending. It's pure ideology being sold as fiscal responsibility. Politics at its finest.

You want spending cuts? Here's your $82 billion in spending cuts. Done. Next problem.

[gimpy117]

it's a nice thought..but that will never happen. at least not the weapons development.