• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Tax cuts or balance budget

What is more important?

  • A balanced budget (no growth in debt)

    Votes: 39 88.6%

  • Tax cuts

    Votes: 5 11.4%
  • Total voters
    44
Catawba said:
I provided evidence from 5 different studies of the issue and you provided your opinion. I think I will go with the studies but thanks for your opinion.
Click to expand...

The numbers I quoted are from the study, jackass.
 
Catawba said:
What Madoff did was illegal. SS is not.
Click to expand...

I would argue all taxes not agreed upon by the populace are immoral and shouldn't exist :shrug:
 
reefedjib said:
The numbers I quoted are from the study, jackass.
Click to expand...

I've noticed you always start with the name calling when you have been proven wrong. You should work on that!

Then you probably also noted from the studies that what i claimed is true.

The 5 studies total average for Medicare administrative costs is 4.7% and the total average for private health insurance is 14.8%
 
Badmutha said:
Only in imaginationland.....
Everything from the DMV to Public Sector Union Slobs represent the antithesis of efficiency........
.....and thus delivers a superior product and service. The private sector attains customers via Free Choice and Free Markets......the public sector relies on a monopoly of brute force to get its customers.
....thus there is no reason to move any product.....or improve the product.....its why government always delivers a turd sandwhich.
Click to expand...

All of those roads, law enforcement, firefighters, election management, public park systems, and soldiers seem to be working out just fine as public systems. And they keep improving, without the need for profit. There's no need to compete with private versions of these services, because they are too important to leave to selfish interests. You look at the DMV as a failure because you have to wait in line. I see it as an amazing success because of all the myriad services they provide, and the sheer number of people they manage to go through. You'd prefer they hire more people to speed things up so you don't have to wait as long? Guess what, the ratio they have now gets people through as fast as possible, without letting a teller ever go without someone to serve. In short, it is as efficient as possible. The DMV does not care about making you feel better about the business you have to do. It just gets the business done. A private version of the DMV would spend more money to make the waiting room more comfortable, or hire more tellers to get you through faster... which would increase the overhead, and they would raise the cost they charge you. By its very nature of being public and thus not out for profit, the DMV is as cost-effective as possible.


reefedjib said:
This had me on the floor laughing. Ahh, the innocence.
The truth is, a private program has competition. In order for a private program to turn a product, they need to deliver quality service at a lower price. This means there is strong, profit-based incentive to reduce costs.
A public program finds itself in the opposite situation. There is no competition, in a public program. A public program has no incentive to reduce costs and operate efficiently. In fact, a public program has an incentive to acquire more funding and does so be being inefficient and performing poorly to increase staff. It creates work for itself, through increased bureaucracy.
Click to expand...

Except that we have done everything we can to destroy competition. Real competition has very little to do with the quality of a product, but rather with advertising. Why do you think everyone pays through the nose for ad time during the Superbowl? Why do you think ads pop up on every website and during every TV show? In a system with actual competition, the better product would sell, regardless of how it was advertised. The whole principal of competition is based on how well a seller can lie to the consumers. The incentive, as you put it, is not to make a better product. It's to make a cheaper product and to lie about its effectiveness. That's why a bag of chips is puffed up and has so much empty space in it. It's to trick you into thinking there's more chips in there than there really is.

The competition you speak of doesn't happen between competing brands. In terms of the quality of the product, there is no difference between Coke and Pepsi. Or a Ford or a Chrysler. They're fundamentally the same technology. It's the impression those products give you that informs your choice to buy. The competition that you're talking about is the competition between cars and horses. Major innovations in technology. These happen without the need for profit. Inventors invent even when no one pays them to do it. The competitive innovations are about how to better market a product, not how to improve that product, other than ways to make it more cheaply, like taking all the actual food out of food, or making headphones that don't last as long, or outsourcing jobs to countries where workers can be paid vastly less, or by just firing people.

Innovation and competition have nothing to do with one another, and profit is not a motivator for innovation.

As to there being no motivation to lower costs... Taxes are our money. Government works for us (or, it would if we didn't sell it to corporate interests). We are the board of directors and one of our mandates is not to waste money. Of course there is incentive to lower costs. The program only gets exactly as much money as it needs to do the job. There are no bonuses for the folks at the top. The job gets done, and as efficiently as it possibly can be done.
 
iamitter said:
I would argue all taxes not agreed upon by the populace are immoral and shouldn't exist :shrug:
Click to expand...

You can argue that but the rule of law says that it is not the case.
 
Last edited:
fredmertz said:
Further to your point: Let's say there are two people making Product 'X'. Person 1 is better than Person 2 at making 'X'. The government is looking for help making product 'X' in a public program. Person 1 has practically unlimited profitability by making 'X' in the private sector, because he is the best. So he refuses to work for the government, understandably. Person 2 will have a difficult time keeping afloat making product 'X' in the private sector, especially with Person 1 as competition. So person 2 works for the government.

The government will always be hiring the second best. They can never have efficiency like the private market does because those that are the best in their fields will never work for the government.
Click to expand...

So, you're arguing that the private sector is better... because a few individuals can make more personal profit at the cost of everyone else? That best person who won't work for the government... he's providing the same service (maybe marginally better, but not much) for a substantially higher cost. He goes private for the big bucks. He can benefit more from being in the private sector, but all of his customers suffer. They pay a lot more... without getting any return on that higher cost. Person 2 is more efficient. Person 1 is greedy.
 
iamitter said:
I would argue all taxes not agreed upon by the populace are immoral and shouldn't exist :shrug:
Click to expand...

Theoretically, yes. But we, the populace, elect the leaders who make these taxes. Since they are our voice, mandated by us to do this, by electing them, we are agreeing to the decisions they make. So, all taxes presently in place ARE agreed upon by the populace. The act of voting for a candidate makes you beholden to the consequences of that election, even if you lose. Now, you can make it iffy by voting for someone who will change that tax, but that's still your opinion vs that of the populace. Until enough of them agree with you to elect the other guy, the populace has still spoken.

This is how a representative republic works.
 
Catawba said:
I've noticed you always start with the name calling when you have been proven wrong. You should work on that!

Then you probably also noted from the studies that what i claimed is true.

The 5 studies total average for Medicare administrative costs is 4.7% and the total average for private health insurance is 14.8%
Click to expand...

It is a meaningless percentage to compare. The per beneficiary cost is the correct number to compare:

Medicare - $509
Private insurers - $453

Not only is admin costs higher per beneficiary with Medicare, but the medical costs per beneficiary are much higher. And Medicare doesn't cover everything that private insurance covers. You have to get Medicare Advantage to begin to see parity.

You have been proven wrong again, you ideological pipsqueak.
 
cpwill said:
the chart kandahar posted is the exact same as mine with one notable difference: it doesn't compare tax revenues to tax rates. dramatic swings in tax rates have not produced anything similar in tax revenues[/il].
Click to expand...


That depends what you consider a dramatic swing in tax revenues. No, we aren't going to double tax revenues, but that isn't the point. Even if we can increase the tax revenue by 1% of GDP, that's $150 billion. Nothing to sneeze at. Since we're currently collecting about 16% of our GDP in taxes, if we could just get that back to the historical average of 19% by raising taxes, that gives us an extra half trillion, which would solve approximately 1/3 of the current deficit.
 
jamesrage said:
I would say tax cuts and then work at balancing the budget to adjust to those tax cuts.
Realistically we can demand our elected officials to cut taxes and balance the budget, it is not a either or. Either way stuff will have to be cut regardless if the budget is balanced and or if tax cuts are given.
Click to expand...

Balancing the budget always means job losses. Job losses mean worse economy, and worse economy is the only way Obama won't get reelected. And that's the only reason the Reps want to balance the budget. They don't care a whit about the economy. They already have theirs and then some, and they can get a raise in pay anytime they want.

ricksfolly
 
Kandahar said:
That depends what you consider a dramatic swing in tax revenues. No, we aren't going to double tax revenues, but that isn't the point. Even if we can increase the tax revenue by 1% of GDP, that's $150 billion. Nothing to sneeze at. Since we're currently collecting about 16% of our GDP in taxes, if we could just get that back to the historical average of 19% by raising taxes, that gives us an extra half trillion, which would solve approximately 1/3 of the current deficit.
Click to expand...
That's utterly absurd.

You're not going to get to 19% by introducing a massive tax increase on the 90% or so who still have jobs in this economy. You're only going to make things worse.

If you want tax revenue, try policies that help to grow the economy, not policies that stifle it. Why not concentrate on putting the millions who lost jobs back to work and see how far that gets you before you go implementing polcies that are sure to put even more people out of work.

Our present situation has precious little to do with marginal tax rates and everything to do with massive unemployment and a weak recovery.
 
Catawba said:
What Madoff did was illegal. SS is not.
Click to expand...
So what? At the end of the day, both leave a bunch of people with empty-hands and broken promises (though with 'efficiency' that should be praised I think you said).
 
Taylor said:
That's utterly absurd.

You're not going to get to 19% by introducing a massive tax increase on the 90% or so who still have jobs in this economy. You're only going to make things worse.
Click to expand...

I'm not talking about raising taxes on 90% of people. I support raising taxes in the places where it's least likely to negatively affect the economy: The best place to start would be simplifying the tax code and eliminating nearly all deductions. Most of them are not things we need to be encouraging. First and foremost, we should phase out the mortgage interest deduction (cost: ~$120 billion per year) and tax health benefits as regular income (cost: ~$250 billion per year).

We can also raise income tax rates slightly on the top bracket, and increase estate tax rates significantly on the wealthiest estates. I'm not talking about an across-the-board income tax hike.

Taylor said:
If you want tax revenue, try policies that help to grow the economy, not policies that stifle it.
Click to expand...

We can encourage business-friendly policies like infrastructure investments, breaking the link between business and health insurance, easing labor regulations, and promoting access to capital through low interest rates.

Taylor said:
Why not concentrate on putting the millions who lost jobs back to work and see how far that gets you before you go implementing polcies that are sure to put even more people out of work.
Click to expand...

History would disagree with this conclusion. Tax hikes are one economic lever to pull; there are many others. There is no reason to think that tax hikes would necessarily cause unemployment, especially if we're encouraging business-friendly policies in other ways. If we can recover that half-trillion dollars per year that we're missing out on because we're below the 19% revenue-to-GDP historical average, that will support long-term employment. High amounts of debt are bad for long-term economic growth.

Taylor said:
Our present situation has precious little to do with marginal tax rates and everything to do with massive unemployment and a weak recovery.
Click to expand...

I agree, which is one reason I'm more worried about the long-term deficit than the current deficit. In the long term, the main fiscal problems we need to tackle are defense, social security, Medicare/Medicaid, and an unwieldy tax code. If we can solve those problems, I'm OK with a temporary deficit until the economy recovers.
 
Kandahar said:
First and foremost, we should phase out the mortgage interest deduction (cost: ~$120 billion per year) and tax health benefits as regular income (cost: ~$250 billion per year).
Click to expand...

This type of regressive tax would make more of the middle class poor thereby increasing the welfare roles. One in seven Americans are poor now.

We can also raise income tax rates slightly on the top bracket, and increase estate tax rates significantly on the wealthiest estates. I'm not talking about an across-the-board income tax hike.



We can encourage business-friendly policies like infrastructure investments, breaking the link between business and health insurance, easing labor regulations, and promoting access to capital through low interest rates.



History would disagree with this conclusion. Tax hikes are one economic lever to pull; there are many others. There is no reason to think that tax hikes would necessarily cause unemployment, especially if we're encouraging business-friendly policies in other ways. If we can recover that half-trillion dollars per year that we're missing out on because we're below the 19% revenue-to-GDP historical average, that will support long-term employment. High amounts of debt are bad for long-term economic growth.



I agree, which is one reason I'm more worried about the long-term deficit than the current deficit. In the long term, the main fiscal problems we need to tackle are defense, social security, Medicare/Medicaid, and an unwieldy tax code. If we can solve those problems, I'm OK with a temporary deficit until the economy recovers.
Click to expand...

I am in agreement with the rest of your suggestions.
 
Catawba said:
This type of regressive tax would make more of the middle class poor thereby increasing the welfare roles. One in seven Americans are poor now.
Click to expand...

Phasing out the mortgage interest deduction is not regressive. Most people below the median income don't even itemize their deductions, and those who do would only be losing out on mortgage interest above and beyond what they could get anyway by taking the standard deduction. Since wealthy people tend to have higher-value homes, and are more likely to own a second home, it would predominantly affect them. And from an economic standpoint, home ownership is not necessarily something the government needs to be encouraging at all, as it doesn't provide any obvious economic benefit. Certainly no benefit that's worth a $120 billion subsidy per year, when we have a huge deficit, failing schools, and a crumbling infrastructure.

As for taxing health insurance as income...it would only be regressive for the first year or two, until wages adjusted. The reason that health insurance is even provided by employers is due to this distortion in our income tax code. Employers are able to deduct it as a payroll expense, but employees don't pay taxes on it. As a result, both employees and employers have a perverse incentive to make health insurance as large a fraction of total compensation as possible. This distorts the health care market, keeps people trapped in jobs that they hate, and reduces their salaries. Furthermore, it's the primary reason that there has been no median wage growth for several decades. If employer-provided health insurance was taxed as income, employers would provide less of it, and wages would increase accordingly. So yes, it would be regressive, but only temporarily. Ideally, it would help break the link between health insurance and employment, so it wouldn't even be an issue after a few years.
 
Last edited:
Kandahar said:
Phasing out the mortgage interest deduction is not regressive. Most people below the median income don't even itemize their deductions, and those who do would only be losing out on mortgage interest above and beyond what they could get anyway by taking the standard deduction.
Click to expand...

I wasn't talking about those below median income. I was talking about the middle class.

Since wealthy people tend to have higher-value homes, and are more likely to own a second home, it would predominantly affect them.
Click to expand...

Then don't allow deductions for a second home.

And from an economic standpoint, home ownership is not necessarily something the government needs to be encouraging at all, as it doesn't provide any obvious economic benefit. Certainly no benefit that's worth a $120 billion subsidy per year, when we have a huge deficit, failing schools, and a crumbling infrastructure.
Click to expand...

A home is the main asset that most of the middle class own, and home ownership by the middle class has not been the main source of our finacial problems

As for taxing health insurance as income...it would only be regressive for the first year or two, until wages adjusted. The reason that health insurance is even provided by employers is due to this distortion in our income tax code. Employers are able to deduct it as a payroll expense, but employees don't pay taxes on it. As a result, both employees and employers have a perverse incentive to make health insurance as large a fraction of total compensation as possible. This distorts the health care market, keeps people trapped in jobs that they hate, and reduces their salaries. If employer-provided health insurance was taxed as income, employers would provide less of it, and wages would increase accordingly. So yes, it would be regressive, but only temporarily. Ideally, it would help break the link between health insurance and employment, so it wouldn't even be an issue after a few years.
Click to expand...

A single payer system would be preferable and would not cause further hardship to the most vulnerable.
 
Catawba said:
I wasn't talking about those below median income. I was talking about the middle class.
Click to expand...

Well, those in the 25% tax bracket (which I would consider middle-class) typically only increase their after-tax income by 2.4% by itemizing, whereas those in the 35% tax bracket increase it by 4.4%. Simplifying the tax code by eliminating deductions favors the poor and middle-class, in most cases. That is certainly the case with mortgage deductions.

http://www.urban.org/uploadedpdf/1001486-Who-Itemizes-Deductions.pdf

Catawba said:
Then don't allow deductions for a second home.
Click to expand...

Wealthy people tend to have larger mortgages on their first homes too. And it would be more productive to just get rid of these kind of deductions entirely to simplify the tax code. Our current income tax code is a very thick book, and how many of those deductions are actually things that the government needs to encourage by subsidizing them? Very few. We could easily have a tax code that was a couple pages long, just as progressive, and generated more revenue.

Catawba said:
A home is the main asset that most of the middle class own, and home ownership by the middle class has not been the main source of our finacial problems
Click to expand...

But widespread homeownership doesn't provide any obvious economic benefit to the country as a whole. Certainly not any benefit worth $120 billion per year.

Catawba said:
A single payer system would be preferable and would not cause further hardship to the most vulnerable.
Click to expand...

But that isn't on the table; it was enough of a hassle getting the health care reform law passed. The major long-term fiscal problems we need to tackle now are defense, social security, Medicare/Medicaid, and the tax code...and we can't do any of them without bipartisan cooperation.
 
Last edited:
Whats interesting is that almost everyone wants a balanced budget over tax cuts but all we have are tax cuts and no real chance for a balanced budget without higher taxes.
 
Kandahar said:
Well, those in the 25% tax bracket (which I would consider middle-class) typically only increase their after-tax income by 2.4% by itemizing, whereas those in the 35% tax bracket increase it by 4.4%. Simplifying the tax code by eliminating deductions favors the poor and middle-class, in most cases. That is certainly the case with mortgage deductions.

http://www.urban.org/uploadedpdf/1001486-Who-Itemizes-Deductions.pdf



Wealthy people tend to have larger mortgages on their first homes too. And it would be more productive to just get rid of these kind of deductions entirely to simplify the tax code. Our current income tax code is a very thick book, and how many of those deductions are actually things that the government needs to encourage by subsidizing them? Very few. We could easily have a tax code that was a couple pages long, just as progressive, and generated more revenue.



But widespread homeownership doesn't provide any obvious economic benefit to the country as a whole. Certainly not any benefit worth $120 billion per year.
Click to expand...

Those at the top, not the middle class, is who have benefitted most by the tax cuts over the last 30 years. I will not go along with anything that further penalizes the middle classes. Those that have enjoyed the 30 years of big tax cuts are those that need to start paying their fair share again.



But that isn't on the table; it was enough of a hassle getting the health care reform law passed. The major long-term fiscal problems we need to tackle now are defense, social security, Medicare/Medicaid, and the tax code...and we can't do any of them without bipartisan cooperation.
Click to expand...

It will be. Health care reform was a first step towards a single payer system which we will have to go to eventually as the rest of the civilized world has. Our current system is simply unaffordable and hurting our economy.
 
Catawba said:
Those at the top, not the middle class, is who have benefitted most by the tax cuts over the last 30 years. I will not go along with anything that further penalizes the middle classes. Those that have enjoyed the 30 years of big tax cuts are those that need to start paying their fair share again.
Click to expand...

But...ending the mortgage interest deduction DOESN'T penalize the middle class, as explained...

Catawba said:
It will be. Health care reform was a first step towards a single payer system which we will have to go to eventually as the rest of the civilized world has. Our current system is simply unaffordable and hurting our economy.
Click to expand...

In the long term perhaps we will get a single-payer system. But I'd rather not rely on the possibility that maybe we'll have a Congress favorable to the idea in 10-20 years. We can make some important changes to the tax code now, with bipartisan support, which will help get health care costs under control, generate tax revenue, and get the median wage growing again.
 
Last edited:
Kandahar said:
But...ending the mortgage interest deduction DOESN'T penalize the middle class, as explained...
Click to expand...

I've never made more than $50,000 annually and not having a mortgage interest deduction would have been a hardship on me.



In the long term perhaps we will get a single-payer system. But I'd rather not rely on the possibility that maybe we'll have a Congress favorable to the idea in 10-20 years. We can make some important changes to the tax code now, with bipartisan support, which will help get health care costs under control, generate tax revenue, and get the median wage growing again.
Click to expand...

Yes, that is what health care reform was about.
 
cpwill said:
and helped leave us with an unfunded liability larger than world GDP. SS is a notoriously bad return.
Click to expand...

You're wrong, you're.....you're just wrong, you know that?
 
You must log in or register to reply here.
Back
Top Bottom