Volcker: Taxes likely to rise eventually to tame deficit

Kelzie said:

Wait, people get back more than they've paid in taxes? Truely?

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Yes, apparently.

Income Tax: 47% Of American Households Won't Pay ANY This Year, New Report Says

But income tax rates were lowered at every income level. The changes made it relatively easy for families of four making $50,000 to eliminate their income tax liability.

Here's how they did it, according to Deloitte Tax:

The family was entitled to a standard deduction of $11,400 and four personal exemptions of $3,650 apiece, leaving a taxable income of $24,000. The federal income tax on $24,000 is $2,769.

With two children younger than 17, the family qualified for two $1,000 child tax credits. Its Making Work Pay credit was $800 because the parents were married filing jointly.

The $2,800 in credits exceeds the $2,769 in taxes, so the family makes a $31 profit from the federal income tax. That ought to take the sting out of April 15.

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That of course only applies for federal income tax

People will still pay

Payroll taxes
Property taxes
sales taxes
state income taxes where applicable

PeteEU said:

LOL you have some, if not the lowest tax rate in west and yet you still complain.

Control spending or/and raise income.. there is no other way.

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Yes, you are correct. The US enjoys some of the lowest taxes in the free world, yet we beach and moan over any taxes. That said, spending curtailment and tax increases are inevitable. Until the sides come to the table and each have a spoonful of medicine, we will just have large deficits. The problem is that each side thinks you can cure the problem with the other guy's poison. The reality is there just not not enough expenses that can be realistically cut and you can't raise taxes too much.

As to Obama not doing anything right, in response to earlier posts.... given how close to the edge we were (well evidenced by the sophisticated money pulling out of the market and the stock prices being cut by 60%) to have a market that has well rebounded within 18 months; the bank and car bailouts being repaid and profitable for the government; and quarter over quarter growth, I would submit he has done many, many right things.

upsideguy said:

Yes, you are correct. The US enjoys some of the lowest taxes in the free world, yet we beach and moan over any taxes. That said, spending curtailment and tax increases are inevitable. Until the sides come to the table and each have a spoonful of medicine, we will just have large deficits. The problem is that each side thinks you can cure the problem with the other guy's poison. The reality is there just not not enough expenses that can be realistically cut and you can't raise taxes too much.

As to Obama not doing anything right, in response to earlier posts.... given how close to the edge we were (well evidenced by the sophisticated money pulling out of the market and the stock prices being cut by 60%) to have a market that has well rebounded within 18 months; the bank and car bailouts being repaid and profitable for the government; and quarter over quarter growth, I would submit he has done many, many right things.

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The key move was TARP which stopped the run on the banks. This was dome under a different administration. The stimulus package has helped a little but at a huge cost.

MrVicchio said:

That's what your political masters tell you to think. Good to see you follow without question.

Here you go, some reading to open your eyes.


The Government-Created Subprime Mortgage Meltdown by Thomas DiLorenzo

It's merely a starting point to get you to see that YES, government decree made the housing crisis. YES lenders figured out how to game the system... but guess what dear? They wouldn't have had the "Game" had the Gov. not created the conditions IN THE FIRST PLACE!

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This is only a subset of the problem, not its cause. The total size of that market, even if every mortgage default could not cause the crash of 2008. That market just was not large enough. We had an S&L crisis in the late '80s that had a bigger dollar value than the CRA market. It only caused a small recession and a blip in the stock market. Blaming this on the CRA is the favorite conservative whipping boy, but it is intellectually dishonest and deflects from the true issue.

This was substantially a supply-side problem caused by too much money chasing too few deals (just like the Internet). This was hedge funds and international money chasing securitized debt. I had some experience in the sub-prime markets having done some strategic consulting for a medium-sized producer. They were pushed (by CountryWide, Lehman and FBR among others) to make deals. There was plenty of money, if they could only find the deals. They operated a outbound tele-marketing operating finding people that would take primary or secondary mortgages. They lowered standards from low to lower to make the deal happened. The funding sources off-loaded much of the deal underwriting to the local companies (the guys producing the business also got to make credit decisions and pay themselves a handsome fee.) Similar to the Enron problem, everyone was paid on the front-end and credit quality was practically irrelevant. A good mortgage producer, who last week may have been tending bar, was make $200K a year producing these deals working in the boiler room. The mortgages were packaged, the good with the bad, repackaged, and repackaged again as they worked their way back up the money train, often to international investors, who were more than happy to get high returns secured by American real estate. AIG was in the middle of this providing underwriting insurance on the deals and giving the ultimate investors even more confidence in the investment and deploying more money.

The buyers of these mortgages were not the poor buying low income housing. These were over-extended doctors, lawyers, sales professionals etc. buying too much house, some on speculation, some just living the American dream. The money was being being extended, no one was saying 'no'... so simple greed, up and down the chain, took over.

Sorry, this was a systemic problem causes by greed and Harvard MBA's that every 10 years outsmart themselves and bring the whole system down. This one was just worse than most. This is why the problem brought international banks and hedge-funds down. This was not the CRA, it was far bigger money and more sophisticated than that.

washunut said:

The key move was TARP which stopped the run on the banks. This was dome under a different administration. The stimulus package has helped a little but at a huge cost.

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I agree that Bush gets some credit for correcting the problem. TARP was under his watch, though Obama did have a bit of a hand in it. It was also the auto bailout and the stimulus, which actually wasn't big enough and targeted enough..... I know most think the cost was huge, but given the fact that so much money was removed from the economy when housing and the stock markets crashed and wealth evaporated, the fractional transfer of the wealth to the government in the form of printing money, I think, was actually of inconsequential impact....

But to say he did everything wrong, given that we have had a bit of a comeback from disaster, is disingenuous.

mbig said:

I think Income taxes need to be Raised to More Historical NORMS.
The Class Warfare (Surprise! Someone tell Hannity it didn't start in 2009) of the last 25 years has really increased the Deficit and shifted the burden Down
(and this doesn't even include Bush's near Halving of the Capital Gains and Dividend taxes, 28/15%, and the gutting of the estate tax.)

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Well, fact is. Most of the income is among the ones with normal incomes. Also the ones who have very high incomes have a tendency to go around taxes, especially if they get very high. For instance, they may go abroad. Having a 80% tax for all income over 250K won't give very much money, actually may give less. The only way to get more money is to tax the average american. That's the way they do it in every single left wing country.

For instance in Sweden, when you add all taxes (Income, GST and Payroll tax) low earners get 67% taxes, while high earners get 75% in taxes. In the US, low earners get 30% tax, high earners get 45% in tax.

upsideguy said:

I agree that Bush gets some credit for correcting the problem. TARP was under his watch, though Obama did have a bit of a hand in it. It was also the auto bailout and the stimulus, which actually wasn't big enough and targeted enough..... I know most think the cost was huge, but given the fact that so much money was removed from the economy when housing and the stock markets crashed and wealth evaporated, the fractional transfer of the wealth to the government in the form of printing money, I think, was actually of inconsequential impact....

But to say he did everything wrong, given that we have had a bit of a comeback from disaster, is disingenuous.

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First, I have not said that everything that Obama has done is wrong.

As to the GM bailout you will remember that was also started under Bush. As to the stimulus, a big problem is that the spending is spread ot over several years. If the money was to kick start the economy, then it should have been spent earlier. The Chinese who spent a lot more as a percent of GDP did it in about one year and their economy is rolling along pretty well now.

Camlon said:

Well, fact is. Most of the income is among the ones with normal incomes. Also the ones who have very high incomes have a tendency to go around taxes, especially if they get very high. For instance, they may go abroad. Having a 80% tax for all income over 250K won't give very much money, actually may give less. The only way to get more money is to tax the average american. That's the way they do it in every single left wing country.

For instance in Sweden, when you add all taxes (Income, GST and Payroll tax) low earners get 67% taxes, while high earners get 75% in taxes. In the US, low earners get 30% tax, high earners get 45% in tax.

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Increased taxes can only be a piece of the puzzle. The Obama people are smart enough to know this.

Tackling the big three costs, social secrity, medicare and defense is where a lot of the money will have to be found.

mbig said:

I think we need..

$250,000 ..... 40%
$500,000 ......50%
$1,000,000....60%

that would probably do it and affect few.
And no need for a "Pay Czar" any more.
Just take 60%.
Bonus away!
And that way they'll be more deservant of the next bailout.

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You going to tax business at those rates, too?

But..... the hope and change Obama promised us no new taxes for anyone making under 250k

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Hope.
Change.
Unity.

Three words that will forever be ridiculed.
Three words owned by the biggest failure we've had at the helm.
Three words that will dovetail into Tax and Spend Liberals (Radicals).

How's your Hope and Change working for ya?
And in the words of The Carpenter's... We've only just begun...

.

Councilman said:

Every move this AMATEUR Administration has made on the economy has been wrong and this is no exception.

Raising taxes kills any chance of recovery and will help to continue to kill jobs ad well.

Does this brainless bunch in D.C. not read can they not remember or learn from the past.

For all the hype about how brilliant Obama is he's done everything wrong from the minute he took office and is going to drive this Country into the toilet of time if he and his radical cabal of idiots are not stopped before he gets his way and we end up in a DEPRESSION of monumental proportions that will make stock market crash of 1929 look like a birthday party.

He is not going to just wreck our economy the whole world's economies are at stake.

This man and those who support him seem brain dead to reality.

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The last amateur administration caused the mess. It amazes me how soon some have forgotten that.
Obama has cut taxes and increased tax credits, so far. That along with decreased revenue due to the recession that began three years ago and stimulus money has led to record deficits.
This depression/recession started in 2007.
In your mind what was Obama supposed to do to end Bush's recession?

Bush wrecked our economy. Remember?

zimmer said:

Hope.
Change.
Unity.

Three words that will forever be ridiculed.
Three words owned by the biggest failure we've had at the helm.
Three words that will dovetail into Tax and Spend Liberals (Radicals).

How's your Hope and Change working for ya?
And in the words of The Carpenter's... We've only just begun...

.

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When did this economic collapse begin?

[nomedia="http://www.youtube.com/watch?v=T6bmEv2-rFA&feature=fvw"]YouTube- President Bush's speech on the financial crisis 9/24/08 (1)[/nomedia]

zimmer said:

Hope.
Change.
Unity.

Three words that will forever be ridiculed.
Three words owned by the biggest failure we've had at the helm.
Three words that will dovetail into Tax and Spend Liberals (Radicals).

How's your Hope and Change working for ya?
And in the words of The Carpenter's... We've only just begun...

.

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There is nothing wrong with tax and spend, as long as the money spent is reasonably close to money gathered in taxes.
It is when we borrow and spend that we get into trouble, just like in family finances....

UtahBill said:

There is nothing wrong with tax and spend, as long as the money spent is reasonably close to money gathered in taxes.
It is when we borrow and spend that we get into trouble, just like in family finances....

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But Cheney said
deficits don't matter.

UtahBill said:

There is nothing wrong with tax and spend, as long as the money spent is reasonably close to money gathered in taxes.
It is when we borrow and spend that we get into trouble, just like in family finances....

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Truer words were never spoken!

zimmer said:

Hope.
Change.
Unity.

Three words that will forever be ridiculed.
Three words owned by the biggest failure we've had at the helm.
Three words that will dovetail into Tax and Spend Liberals (Radicals).

How's your Hope and Change working for ya?
And in the words of The Carpenter's... We've only just begun...

.

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Me, I am hoping for some serious change Come 2010 and 2012

UtahBill said:

There is nothing wrong with tax and spend, as long as the money spent is reasonably close to money gathered in taxes.
It is when we borrow and spend that we get into trouble, just like in family finances....

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There is plenty wrong with taking the money of the few to spend it on the wants of the many when the many aren't paying for the spending

USA-1 said:

The last amateur administration caused the mess. It amazes me how soon some have forgotten that.
Obama has cut taxes and increased tax credits, so far. That along with decreased revenue due to the recession that began three years ago and stimulus money has led to record deficits.
This depression/recession started in 2007.
In your mind what was Obama supposed to do to end Bush's recession?

Bush wrecked our economy. Remember?

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My BS detector is redlining with this nonsense.

what wrecked the economy goes back to the decision to ignore the limits placed on the federal government by the constitution which in turn started a fast breeder machine for dependent freeloaders.

ie the New Deal and Great Society

TurtleDude said:

My BS detector is redlining with this nonsense.

what wrecked the economy goes back to the decision to ignore the limits placed on the federal government by the constitution which in turn started a fast breeder machine for dependent freeloaders.

ie the New Deal and Great Society

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Now that is BS. Since the New Deal and Great Society the US has become the most powerful and prosperous nation on earth with one of the highest standards of living on the planet. The spiral downward started when we became the world police and first stuck our nose into the civil war in Vietnam.

USA-1 said:

Now that is BS. Since the New Deal and Great Society the US has become the most powerful and prosperous nation on earth with one of the highest standards of living on the planet. The spiral downward started when we became the world police and first stuck our nose into the civil war in Vietnam.

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You have almost as poor a grasp of history as you do of the concept of cause and effect.

TurtleDude said:

My BS detector is redlining with this nonsense.

what wrecked the economy goes back to the decision to ignore the limits placed on the federal government by the constitution which in turn started a fast breeder machine for dependent freeloaders.

ie the New Deal and Great Society

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The economic crash of 2008 had NOTHING to do with the New Deal or Great Society,

Did anyone not know that Obama was going to spend like hell and eaise taxes when he was elected?

Navy Pride said:

Did anyone not know that Obama was going to spend like hell and eaise taxes when he was elected?

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Not really, because Clinton didn't spend like hell and he actually cut deficits.

Camlon said:

Not really, because Clinton didn't spend like hell and he actually cut deficits.

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He didn't cut the national debt, he just had a budget surplus.
Big difference.