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Thread: CBO report: Debt will rise to 90% of GDP

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    Re: CBO report: Debt will rise to 90% of GDP

    Quote Originally Posted by NoJingoLingo View Post
    Uh... it was the lack of job growth during the Shrub years that moved us to a service economy.

    I doubt Obama will do anything to change that, however, because he can't.
    Really, and prior to that we were what kind of economy?
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    Re: CBO report: Debt will rise to 90% of GDP

    Apparently, the 'increased tax burden' results from the closing of a loophole under which taxpayers were providing a subsidy to the companies and then the companies were treating that subsidy (a tax-free income stream) as an expense for tax purposes.

    From CNBC:

    These announcements followed statements from manufacturers Deere and Caterpillar , which said on Thursday that they are expecting a combined $250 million in charges this year as a result of changes to the $2.5 trillion U.S. health care system.

    They can no longer deduct from their taxes the subsidies paid by the federal government for retiree drug benefits.


    News Headlines

    To illustrate what was happening, the following are the cases of two scenarios (using hypothetical numbers for illustrative purposes):

    Scenario 1: What will be required under the new law
    Annual health costs for retirees: $1,000,000
    The company pays $800,000 of those costs; the federal government provides a subsidy for the remaining $200,000
    The company has a tax rate of 20%

    The company's net after-tax health expenses for its retirees is: $640,000 calculated as follows:

    Company's payment: $800,000 less the tax benefit (20% * 800,000) = $640,000

    Scenario 2: What was going on
    Annual health costs for retirees: $1,000,000
    The company pays $800,000 of those costs; the federal government provides a subsidy for the remaining $200,000
    The company has a tax rate of 20%

    The company's net after-tax health expenses for its retirees is: $600,000 calculated as follows:

    Company's payment: $800,000 less:
    [the tax benefit from deducting its expense (20% * 800,000) + treating the federal subsidy as an expense for tax purposes (20% * 200,000)] = 600,000

    Under the latter scenario, taxpayers were not only paying $200,000 of the company's health costs via the tax-free subsidy, they were being forced to pay an extra $40,000 afterward, because the company was treating the subsidy as its own expense when, in fact, it was the taxpayers not the company who were actually incurring the expense.

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    Re: CBO report: Debt will rise to 90% of GDP

    Shopping list

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    Re: CBO report: Debt will rise to 90% of GDP

    Quote Originally Posted by chevydriver1123 View Post
    Shopping list

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    Re: CBO report: Debt will rise to 90% of GDP

    concerning at&t and all the others, there are 2 very separate questions:

    1. is closing this loophole the right thing to do in principle?

    2. is closing this loophole NOW advantageous to our economy?

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    Re: CBO report: Debt will rise to 90% of GDP

    Quote Originally Posted by donsutherland1 View Post
    Under the latter scenario, taxpayers were not only paying $200,000 of the company's health costs via the tax-free subsidy, they were being forced to pay an extra $40,000 afterward, because the company was treating the subsidy as its own expense when, in fact, it was the taxpayers not the company who were actually incurring the expense.
    outstanding, except the taxpayers aren't really paying the 40G, they're really BORROWING the 40G and paying only the interest incurred from the loan

    these days, bottom line, the govt can't really pay for anything, all of its revenues are tied up and liable (for decades, even), every penny of spending proposed at this point is clearly gonna have to be borrowed

    you make a real good point and you explain it with great talent (in my opinion)

    but the question remains, is NOW the expeditious time to hit at&t and all the others with that 40G per

    you know what i'm getting at...

    thanks much, you're good

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    Re: CBO report: Debt will rise to 90% of GDP

    Cap and Trade legislation is next!

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    Re: CBO report: Debt will rise to 90% of GDP

    Quote Originally Posted by American View Post
    Really, and prior to that we were what kind of economy?
    Well, the 90s we were a tech industry, before that manufacturing and before that agricultural.

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    Re: CBO report: Debt will rise to 90% of GDP

    Quote Originally Posted by The Prof View Post
    outstanding, except the taxpayers aren't really paying the 40G, they're really BORROWING the 40G and paying only the interest incurred from the loan

    these days, bottom line, the govt can't really pay for anything, all of its revenues are tied up and liable (for decades, even), every penny of spending proposed at this point is clearly gonna have to be borrowed

    you make a real good point and you explain it with great talent (in my opinion)

    but the question remains, is NOW the expeditious time to hit at&t and all the others with that 40G per

    you know what i'm getting at...

    thanks much, you're good
    If they fail because they aren't getting free tax money then they should fail right? You're not really more concerned about the jobless than keeping the markets pure, are you? Aren't you one of the, "let'em fail in the free market" crowd, regardless of whether we spiral into a depression or not?

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    Re: CBO report: Debt will rise to 90% of GDP

    Brace yourselves the worst yet to come and it's going to absolutely the last vestiges of our economy because that is Obama's goal as laid out by the Cloward & Pevin Strategy.

    Obama promise of fundamental change can't take place until he destroys the Nations economy so he can replace our whole system with Socialism/Marxism.

    His every move has been in that direction and liberals have their collective heads so up the shoot they don't see it.

    One can never have 20 20 hindsight until you pull your head out of ones ass.

    Those who stand for nothing fall for anything. Or put another way are Obamanites.

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