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Tax Cuts Are A Bigger Problem Than Spending

TurtleDude said:
have you ever sat back and considered that the federal government spends way too much on way too many things?
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You are qiite probably right that the government spends more than it should. To reign in spending would require a rethink, however.
 
JasperL said:
Raising rates increases revenue. Sorry, the Laffer curve is pretty worthless except as propaganda.

And the real point about Europe's tax structure is it makes sense given their spending patterns, with universal healthcare and in general larger 'entitlements.' The entitlements are broad based, especially healthcare benefits, and they are funded largely through the broad based VAT. In that sense the VAT is a lot like our payroll taxes, which fund OUR broad based entitlements. If your point is to fund UHC/single payer, we should have a broad based tax like a VAT, I do agree.
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You do know how taxes are collected in Europe? Whom for instance do you think a 19 or more percent V.A.T. impacts? Or whom do you think taking about 17 percent with a cap out of wage income will affect most?
 
joG said:
You do know how taxes are collected in Europe? Whom for instance do you think a 19 or more percent V.A.T. impacts? Or whom do you think taking about 17 percent with a cap out of wage income will affect most?
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Yep, I know how they're collected and what a VAT is. I'm guessing the 19% VAT impacts the same people with guaranteed healthcare, generous paid maternity leave, and free college. Are you saying it's unfair to levy taxes on people who enjoy the generous government benefits?
 
Winston said:
Look at countries like Germany and Sweden. They spend on a single-payer healthcare system. They also spend more on their citizens in general. But, they are taxed significantly higher than us. They provide more for their society without damaging their budget. Both countries run surpluses.

German budget surplus soars as economy motors ahead | Reuters

Conservative like to tell you spending is the problem. Yet we have so many outright refutations of their "spending is the boogeyman" talking point. The problem is the Tax CUTS!


View attachment 67217813

That shows you the Bush Tax Cuts costed more than both wars Bush waged on the countries credit card. You guys don't realize that a tax cut that saves you two or three thousand per year, may feel nice and give you a cushion. But, the same legislation that gave you an extra two or three thousand, is giving the top an extra quarter million. A chunk of money they do not need and has no positive benefits for society from they're acquiring it. That's money that could've been used to build roads, schools, or provide healthcare to our citizens.


Once again, Germany high tax, high spending, runs a surplus. The problem is the tax cuts. Not the spending.

Also very boneheaded and deceptive move cutting HUD and Community Development Block Grants. It's not saving you any money, because those cuts in spending will be eviscerated by giant tax cuts coming.
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The problem is spending more than you have to spend. Tax revenue and spending both affect that. They are causes, not the problem. You can address the problem with either cause or both of them. Your post doesn't make any sense to me at all. You are simply stating that your favorite cause is better than the the other cause. They are both the same.
 
calamity said:
If Americans sat down for a minute and added up all the money they pay for private healthcare, including the employer contribution, they would gladly pay a flat 5% tax for universal govt funded health system--hell, even 10% would be a steal for well over 75% of the country. But, Americans are really bad at math---and, I mean really bad.
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Care to show us that math? Total US annual personal income is about (not quite) $13 trillion so a flat 5% tax on that is $650 billion. $650 billion divided by about 320 million people is $2,031.25 per person. That is obviously not going to cut it so let's go with your 10% figure bumping UHC revenue to $4,062.50 per person. Do you think that is enough to git-r-done?

$10,345 per person: U.S. health care spending reaches new peak | PBS NewsHour

The bottom line is that you cannot finance 18% of the US economy with a payroll tax of less than that percentage.
 
calamity said:
If Americans sat down for a minute and added up all the money they pay for private healthcare, including the employer contribution, they would gladly pay a flat 5% tax for universal govt funded health system--hell, even 10% would be a steal for well over 75% of the country. But, Americans are really bad at math---and, I mean really bad.
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Care to show us that math? Total US annual personal income is about (not quite) $13 trillion so a flat 5% tax on that is $650 billion. $650 billion divided by 320 million people is $2,031.25 per person. That is obviously not going to cut it so let's go with your 10% figure bumping UHC revenue to $4,062.50 per person. Do you think that is enough to git-r-done?

$10,345 per person: U.S. health care spending reaches new peak | PBS NewsHour

The bottom line is that you cannot finance 18% of the US economy with a payroll tax of less than that percentage.
 
ttwtt78640 said:
Care to show us that math? Total US annual personal income is about (not quite) $13 trillion so a flat 5% tax on that is $650 billion. $650 billion divided by about 320 million people is $2,031.25 per person. That is obviously not going to cut it so let's go with your 10% figure bumping UHC revenue to $4,062.50 per person. Do you think that is enough to git-r-done?

$10,345 per person: U.S. health care spending reaches new peak | PBS NewsHour

The bottom line is that you cannot finance 18% of the US economy with a payroll tax of less than that percentage.
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Sure you can, if you eliminate all the price gouging. Of course that means all the people getting fat off medical and drug industry profits will need to go on a diet. And, that includes overpaid doctors and pharmaceutical reps.
 
calamity said:
Sure you can, if you eliminate all the price gouging. Of course that means all the people getting fat off medical and drug industry profits will need to go on a diet. And, that includes overpaid doctors and pharmaceutical reps.
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Dream on. We could have plenty of fine doctors if we just paid them less than half of what they currently make - look it up. ;)
 
ttwtt78640 said:
Dream on. We could have plenty of fine doctors if we just paid them less than half of what they currently make - look it up. ;)
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The whole industry is gouging and taking advantage of the huge sums of money being poured into it. When a pill or injection, which someone needs to take on a weekly basis, costs $2500, you know someone is gouging.
 
Winston said:
Look at countries like Germany and Sweden. They spend on a single-payer healthcare system. They also spend more on their citizens in general. But, they are taxed significantly higher than us. They provide more for their society without damaging their budget. Both countries run surpluses.

German budget surplus soars as economy motors ahead | Reuters

Conservative like to tell you spending is the problem. Yet we have so many outright refutations of their "spending is the boogeyman" talking point. The problem is the Tax CUTS!


View attachment 67217813

That shows you the Bush Tax Cuts costed more than both wars Bush waged on the countries credit card. You guys don't realize that a tax cut that saves you two or three thousand per year, may feel nice and give you a cushion. But, the same legislation that gave you an extra two or three thousand, is giving the top an extra quarter million. A chunk of money they do not need and has no positive benefits for society from they're acquiring it. That's money that could've been used to build roads, schools, or provide healthcare to our citizens.


Once again, Germany high tax, high spending, runs a surplus. The problem is the tax cuts. Not the spending.

Also very boneheaded and deceptive move cutting HUD and Community Development Block Grants. It's not saving you any money, because those cuts in spending will be eviscerated by giant tax cuts coming.
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It seems I constantly have to remind you guys that Bush left office in 2009 and his tax cuts expired in 2010. But like every other dutiful liberal, you guys keep posting this same dishonest graph. The tax rates we have today are OBAMA era tax cuts since it was he who made them permanent. Is it really that difficult for you guys to lay any blame at that mans feet? It almost like you guys forget he was president for 8 years.
 
calamity said:
The whole industry is gouging and taking advantage of the huge sums of money being poured into it. When a pill or injection, which someone needs to take on a weekly basis, costs $2500, you know someone is gouging.
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So you say, yet if that person is allotted $4K/year then they (or someone else) must simply do without that pill (or care). What is being ignored is that "end of life" care (do anything and everything medically possible to delay the inevitable?) is using up to 25% of our medical care resources.

Cutting the High Cost of End-of-Life Care | Money
 
Winston said:
I don't see it that way. I think as the world becomes more and more complex you will need more and more government to contain its complexity.
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So in other words, the ultimate end of mankind is tyranny. Maybe you ought to rethink things.
 
ttwtt78640 said:
So you say, yet if that person is allotted $4K/year then they (or someone else) must simply do without that pill (or care). What is being ignored is that "end of life" care (do anything and everything medically possible to delay the inevitable?) is using up to 25% of our medical care resources.

Cutting the High Cost of End-of-Life Care | Money
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Costs for that will go down too when there is no money to be made off those people. Of course, to do that successfully, we can't have some political hack like Sarah Palin go running around screaming, "Death Panels!"
 
calamity said:
Costs for that will go down too when there is no money to be made off those people. Of course, to do that successfully, we can't have some political hack like Sarah Palin go running around screaming, "Death Panels!"
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Hmm... you seem to think that simply cutting benefit spending will drive down costs. I suppose we should try that "fix" for Medicare, Medicaid and VA just to see if it really works. ;)
 
Fletch said:
So in other words, the ultimate end of mankind is tyranny. Maybe you ought to rethink things.
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Tyranny is driven by malice. That's not an accurate portrayal. A perfect example of the complexity of the world, that did not exists 100 yearx ago, would be the Homeland Security Department.
 
Fletch said:
It seems I constantly have to remind you guys that Bush left office in 2009 and his tax cuts expired in 2010. But like every other dutiful liberal, you guys keep posting this same dishonest graph. The tax rates we have today are OBAMA era tax cuts since it was he who made them permanent. Is it really that difficult for you guys to lay any blame at that mans feet? It almost like you guys forget he was president for 8 years.
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You must not have read many of my posts on Obama. I never voted for Obama. Also, not sure why you could credit Tax Cuts for growth under Bush, and then Tax Cuts under Obama led to a "miserable recovery" and "economic stagnation".
 
Winston said:
Tyranny is driven by malice. That's not an accurate portrayal. A perfect example of the complexity of the world, that did not exists 100 yearx ago, would be the Homeland Security Department.
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No tyranny is driven by power.
 
Winston said:
You must not have read many of my posts on Obama. I never voted for Obama. Also, not sure why you could credit Tax Cuts for growth under Bush, and then Tax Cuts under Obama led to a "miserable recovery" and "economic stagnation".
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I didn't.
 
Winston said:
Not true. There have been plenty of benevolent men with great power.
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One of the great weaknesses of modern progressive thought is the faith that theirs will be a benevolent despotism.
 
Fletch said:
One of the great weaknesses of modern progressive thought is the faith that theirs will be a benevolent despotism.
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Coming.. from a Trump supporter. Trump has openly praised dictators and wishes he could rewrite libel laws to prevent dissent.
 
Winston said:
Coming.. from a Trump supporter. Trump has openly praised dictators and wishes he could rewrite libel laws to prevent dissent.
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What does that have to do with anything? Not every answer to every question has some variation of Trump in it.
 
Fletch said:
What does that have to do with anything? Not every answer to every question has some variation of Trump in it.
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It shows that you support someone who has expressed a longing for tyranny. The very thing you fear.

Or, are socialist dictators more scary than their right wing counterparts?

My point is this philosophical discussion of "more government is tyranny." Is one dimensional.
 
cpwill said:
Well, with their lower growth, lower income, resgressive tax structure, and lower economic freedom than the United States, I would suggest that would mean "not Germany and Sweden".
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If you're going to compare income, you really ought to use median income, not simple averages. It's the whole, "Bill Gates walks into a bar - average net worth of bar patrons increases by over $10 million per person" problem. From what I can tell, Sweden's median income is about $10k higher than the U.S., Germany about $10k lower, but that data seems a bit questionable - can't really believe Sweden's standard of living is that different than the economic leader of Europe... Anyway, average (mean) income is worthless if you're concerned about working people.

Worldwide, Median Household Income About $10,000 | Gallup

Income tax is what grew - are you really prepared to argue that was the result of the increased income of construction workers?
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That's part of it. From 2000-2008, household debt increased by nearly double, adding about $7 trillion. That money went into the economy, fueled a bubble that included lots of construction workers, who spent their paychecks, etc. But the tax cuts had little to do with it - the Fed's ultra low interest rates were FAR more important. And when the bubble burst as it must, collections cratered.
I grab-quoted the Bartlett bit, because I wanted to be accurately representing what you were saying. I'll come back with two points:

1. The critical point is that the Bush tax cuts did not result in actual loss of revenue - revenue climbed.
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Right, but unless you're prepared to argue tax increases lower revenues (see Clinton years...), it's unclear what your point is. Certainly if rates had been higher, receipts would have been higher.
 
2. Bartlett is probably correct that we have reached the point of diminishing returns when it comes to nominal-rate-cut-driven growth increases. That is why we should focus on reducing complexity:

Americans spend an estimated between $67 billion and $378 billion annually in accounting costs related to filing taxes. Americans spent more than 6 billion hours (2011) complying with the tax code. This represents an annual workforce of 3.4 million—a population that could be the third largest city in the United States, surpassing Chicago (2,707,120), Houston (2,145,146), and Philadelphia (1,536,471), and larger than the population of 21 states. A workforce equivalent to that employed by the four largest US companies—Walmart, IBM, McDonald’s and Target—combined.

The impact of taxes on the economy extends beyond the revenue taken by the government. The compliance burden results in estimates of foregone economic growth from $148 billion to $609 billion annually.​


As that is probably where the greatest bang-for-our-buck is. You could strip out complexity while lowering nominal rates - but keeping real rates approximately the same - and give a good sized boost to the economy, as those losses would then go to fund more productive things.
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There are good reasons for broadening the tax base, but it just won't make taxes significantly easier to comply with. I do taxes for a living and itemized deductions, for example, are simple for about 99% of taxpayers. What makes a return difficult is the business income reported on them, through Scedule C's, LLCs, partnerships, S Corps and the like. If there is an economic boost, it's probably going to come from removing tax distortions that arguably funnel investments into sub-optimal projects because of tax advantages. Before passive loss rules with TRA 86 did them in, a lot of crap real estate projects were built because of the tax advantages, for example.

Okay! Now - take this insight, and apply it backwards in time.

IF we know that tax revenue as a % of GDP does not produce corresponding swings to nominal rate changes because people see an increased reward from avoiding taxation and a decreased award from taking part in taxed activities, then that means that had tax rates been higher during the post-2003 era, tax revenue as a % of GDP would not have been significantly higher because people would have seen an increased reward from avoiding taxation and a decreased award from taking part in taxed activities.
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There is just no evidence for that as a general rule, sorry. Bush cut tax rates, twice, and taxes as a % of the economy dropped to near post WWII lows. And it's hard to conclude any relationship with tax rates and really anything in the midst of a WORLDWIDE debt bubble and associated housing bubble, then collapse.

Which would mean that the graph in your OP.... according to what you here are recognizing.... is bunk, because it assumes that they would not have, but instead would have blithely taken all the exact same actions that they did, only to be surprised when their taxes came due.... every single time..... ;)
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It's not really "bunk." Sure, taxes affect behavior, and higher tax rates all else equal depress economic activity, but all the other things relevant to businesses matter far more - interest rates, demand from wages, debt levels, worldwide demand, oil prices, etc. It's certainly more accurate to assume a high correlation between rates and revenues than to assume that there is no relationship or a weak one as you're asserting. There is just no evidence for it.
 
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