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Thread: Feds see biggest tax revenue drop since 1932

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    Banned Coolguy's Avatar
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    Feds see biggest tax revenue drop since 1932

    Feds see biggest tax revenue drop since 1932
    Recession's toll comes as Congress and president try to fund programs

    ...

    The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

    ...

    "Our tax system is already inadequate to support the promises our government has made," said Eugene Steuerle, a former Treasury Department official in the Reagan administration who is now vice president of the Peter G. Peterson Foundation.


    ...

    http://www.msnbc.msn.com/id/32275055...-more_politics



    I wonder if this will have any impact with what those in control of Congress are trying to do with health care and the economy.
    I would hope so.

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    Re: Feds see biggest tax revenue drop since 1932

    I wonder if the government will starve itself out of existence....

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    Re: Feds see biggest tax revenue drop since 1932

    Quote Originally Posted by Coolguy View Post

    I wonder if this will have any impact with what those in control of Congress are trying to do with health care and the economy.
    I would hope so.
    It will probably result in greater emphasis being placed on revenue increases to cut the nation's budget deficits. Already, some of that emphasis is being seen in some of the health legislation efforts.

    With respect to the nation's large structural budget deficits, some combination of tax increases and spending reductions will be necessary. Relying on economic growth alone, or discretionary spending reductions alone, won't resolve the structural deficits that are largely a function of earlier debt (debt servicing costs) and the mandatory spending programs that operate on autopilot. Early mandatory spending reform could mitigate the extent of tax hikes, but such reform is unlikely in the near-term.

    In general, hiking taxes is unpopular. However, as political fortune has it, a large portion of the 2001 and 2003 tax cuts will be expiring in 2010. Rather than adopting legislation to raise taxes, Congress will probably opt to allow a portion of those earlier tax cuts to expire, though most of those reductions will probably be extended (as signaled in the exemptions in the House of Representatives' recent paygo legislation), for a combination of political and economic reasons. The share that are renewed will depend on how the economy is faring at the time those cuts begin to expire and whether international concern about U.S. deficits is rising. For those tax cuts that expire, Congress will frame the argument that it didn't raise taxes (technically that argument would be correct). Instead, it will assert that the tax changes were the result of earlier policy from a previous administration to shield itself from having to debate the merits/drawbacks of tax policy changes.

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    Re: Feds see biggest tax revenue drop since 1932

    Quote Originally Posted by donsutherland1 View Post
    . . . it will assert that the tax changes were the result of earlier policy from a previous administration to shield itself from having to debate the merits/drawbacks of tax policy changes.
    'Twon't work. Blaming everything on the Previous administration and previous Congresses is already wearing pretty thin.

    The Congress by action or inaction will almost certainly raise taxes and worsen the economy, they canít seem to help themselves.
    Quod scripsi, scripsi

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    Re: Feds see biggest tax revenue drop since 1932

    Quote Originally Posted by Oftencold View Post
    'Twon't work. Blaming everything on the Previous administration and previous Congresses is already wearing pretty thin.

    The Congress by action or inaction will almost certainly raise taxes and worsen the economy, they canít seem to help themselves.
    Actually, you can put a LOT of the blame on Bush. This does not get Obama off the hook, as he is also spending like a drunken sailor. Both Bush and Obama are responsible, and only a political hack will blame one while giving the other a pass.
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    Re: Feds see biggest tax revenue drop since 1932

    Quote Originally Posted by danarhea View Post
    Actually, you can put a LOT of the blame on Bush. This does not get Obama off the hook, as he is also spending like a drunken sailor. Both Bush and Obama are responsible, and only a political hack will blame one while giving the other a pass.
    The problem I have with the whole blame game is that it doesn't do anything in the present tense.

    Ok, Bush screwed the pooch. There, it's been said. How has saying that changed the current circumstance? Tax revenues are still down, the deficits are still up, and the budget is still a farce.

    The only reason Dear Leader needs to shut up about Bush is that every syllable he wastes on Bush is a syllable not spent articulating solutions to the problems we have today. Forget about who did what and when last year--who is going to do what and when today?

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    Re: Feds see biggest tax revenue drop since 1932

    Quote Originally Posted by celticlord View Post
    The problem I have with the whole blame game is that it doesn't do anything in the present tense.

    Ok, Bush screwed the pooch. There, it's been said. How has saying that changed the current circumstance? Tax revenues are still down, the deficits are still up, and the budget is still a farce.

    The only reason Dear Leader needs to shut up about Bush is that every syllable he wastes on Bush is a syllable not spent articulating solutions to the problems we have today. Forget about who did what and when last year--who is going to do what and when today?
    That's well and good, but the old adage applies - Those who forget the past are doomed to repeat it.

    NOTE: Since Bush is a very recent past, I wonder what "dear leader" has been smoking in his crack pipe. LOL.
    Last edited by danarhea; 08-04-09 at 12:03 PM.
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    Re: Feds see biggest tax revenue drop since 1932

    Quote Originally Posted by danarhea View Post
    Actually, you can put a LOT of the blame on Bush. This does not get Obama off the hook, as he is also spending like a drunken sailor. Both Bush and Obama are responsible, and only a political hack will blame one while giving the other a pass.
    What the pathetic hacks argue is that "Bush screwed things up so bad that we should have carte blanch to do whatever we think we need to do".

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    Re: Feds see biggest tax revenue drop since 1932

    Quote Originally Posted by danarhea View Post
    Actually, you can put a LOT of the blame on Bush. This does not get Obama off the hook, as he is also spending like a drunken sailor. Both Bush and Obama are responsible, and only a political hack will blame one while giving the other a pass.
    Exactly.

    However, being in the recession we are in, in the world, cutting spending is the last thing you should do. In fact you should increase it temporary till the private sector spending picks up again and can take over the "engine" and the cut spending to balance the budget (preferably a surplus so you can save/pay off old debt).

    Now that aint saying what Obama is doing is right or wrong though. The usual partisan hacks seem to be rambling on about "oh it is so bad all this spending" but as usual come with zero realistic alternatives.

    The fact is the US had a massive deficit during the "good years" where there should be no deficit but in fact a surplus. If you look at other countries with great economic expansion during the 1990s and onwards, all of them had pretty much budget surpluses.. the only ones that did not.. the US and UK.

    If anything, Bush spent far more as a drunken sailor than Obama (for now). Why? because he took over a surplus and despite the 9/11 mini recession, he had many years of great economic expansion (granted it was in many ways fake but still), where there should have been a surplus to pay off the deficits of the past. But instead what did Bush do? He increased spending dramatically across the board, without cutting anywhere and on top of that he cut taxes and went into 2 wars... Sure the tax revenue increased for a while, but it is like pissing in your pants.. you have a nice warm feeling for a while, and then it gets real cold.

    Then Obama comes along, being forced into a situation that calls for drastic things. Should he cut spending.. no, that goes against every principle of getting out of a recession. The right tried that in 1929 and look where that got us.

    Should he increase spending?.. yes to compensate as much as possible for the fall in private consumption, but by how much and how to pay for it.. he has zero nest egg to take off thanks to Bush, and thanks to Bush the deficit is already at record levels so there is very little leeway for him to do anything but loan more and more money to pay for any increase in spending that is needed.

    Now the real test comes when the US economy starts to recover big time.. will he cut spending and at least attempt to balance the budget and draw down the deficit or will he be a Bush 2.0? That is the real question, but to be brutally honest with zero partisanship.. Obama was not exactly dealt a great hand...and with the political bickering and money grabbing Congress it aint gonna be easy.. look at the F22 program.. waste of money for over a decade and yet was kept in play by congress because it gave money to their states.. things like that has to change for the US to have a remote chance of getting out of this economic crisis.
    PeteEU

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    Re: Feds see biggest tax revenue drop since 1932

    In the 60's, Kennedy cut taxes, revenues increased.

    In the 80's Reagan cut taxes, revenues increased.

    In the 2000's Bush cut taxes, and revenues increased.


    I wonder if this lesson will be heeded?
    Climate, changes. It takes a particularly uneducated population to buy into the idea that it's their fault climate is changing and further political solutions can fix it.



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