Tax cuts or balance budget

March said:

Why didn't it, then? Why did they continue to outsource and not re-invest in America if that is the case?



These two statement are contradictory. First you attribute it to the tax cuts then say it has more to do with the economy than anything. Which is it?

I personally don't see any evidence that Bush's tax cuts did anything you claim, in theory or in reality.

Our economy didn't really "grow" either, we didn't begin producing more. If anything speculation increased tremendously during that period, not actual growth. GDP is a poor reflection of economic reality in my opinion, especially in America. How can 70% of an economy be based on consumption? If people increase consumption, which therefore "grows" the economy, how is that a good thing?

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It's not a good thing in general... but it seems like the best way to grow a consumption economy would be to give consumers more tax stimulus (the people, middle class), not the corporations or the rich to trickle down to the consumers..

SheWolf said:

If you had to pick one or the other, which one is more important?

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balance the budget. that being said, this could be easily achieved while reducing tax rates and simplifying the tax code; both of which would lead to higher growth and (ultimately therefore) greater revenue to in turn tackle that debt.

SheWolf said:

It's not a good thing in general... but it seems like the best way to grow a consumption economy would be to give consumers more tax stimulus (the people, middle class), not the corporations or the rich to trickle down to the consumers..

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we are in the mess we are in to no small part because we have consumed to the hilt; leveraging everything we have in order to afford the latest big-screen television. why in the world would we wish to continue to encourage this kind of behavior?

sazerac said:

Revenues don't tend to increase by percentage of GDP. They tend to be a constant percent of the GDP. So if you can increase the GDP you will collect 18 % of the additional monies.

There's lots of ways this can happen. It can happen by cutting taxes. It can happen by raising taxes. It can happen by invention or favorable weather.

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what he said. if you want more revenue, you need to grow GDP. raising rates won't get you therel.

cpwill said:

what he said. if you want more revenue, you need to grow GDP. raising rates won't get you therel.

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nor will repeating right wing talking points based simply upon faith and belief.

Catawba said:

A balanced budget.

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People used to have "balanced budgets", hundreds of years ago..
Today, we, including me, go into debt with the car and the house.
Why should government be any different?
Wars and infrastructure building replace the vehicle and home.
Lets stop these wars and return to building our nation.
And if taxes have to be increased, so be it.

cpwill said:

what he said. if you want more revenue, you need to grow GDP. raising rates won't get you therel.

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You seem to be using some other form of computation that is not mathetmatics, so I am unfamiliar with how you derived your solution.

When I'm paying my bills I allocate a certain portion of my income to doing that. If that portion is not enough, typically I will try to cut expenses for things I deem to be "non-essential" or otherwise less desireable. Keep the internet, ditch the weekly restaurant dinner with my wife. Do put gas in tank to go to work, do not buy new pair of boxing headgear that I've been eyeing. If for some reason I can't cut expenses enough to match that portion of my income, I have two options. I can either borrow money (use the credit card) or allocate a greater portion of my income to expenses. The United States faces the unique situation in which we've actually maxed out all of our credit cards and no longer have that option. The only thing left to do is allocate a greater portion of our income to paying our expenses, (as opposed to say, allocating a greater portion of our income to restaurant dinners or boxing headgear) which means raising taxes.

I don't know where this silly idea of giving billionaires tax breaks = they will invest in America came from but it's not based on reality. Corporations already don't pay any taxes and they are still moving overseas. No, the solution to the debt crisis is not to trust in the crooks who created this disaster. Corporations should have to suffer with the rest of us for our governments mistakes. And suffer we will, the *solution* to our problems is going to suck big time. Chemotherapy makes you feel like **** but ultimately it's going to save your life.

March said:

You seem to be using some other form of computation that is not mathetmatics, so I am unfamiliar with how you derived your solution.

When I'm paying my bills I allocate a certain portion of my income to doing that. If that portion is not enough, typically I will try to cut expenses for things I deem to be "non-essential" or otherwise less desireable. Keep the internet, ditch the weekly restaurant dinner with my wife. Do put gas in tank to go to work, do not buy new pair of boxing headgear that I've been eyeing. If for some reason I can't cut expenses enough to match that portion of my income, I have two options. I can either borrow money (use the credit card) or allocate a greater portion of my income to expenses. The United States faces the unique situation in which we've actually maxed out all of our credit cards and no longer have that option. The only thing left to do is allocate a greater portion of our income to paying our expenses, (as opposed to say, allocating a greater portion of our income to restaurant dinners or boxing headgear) which means raising taxes.

I don't know where this silly idea of giving billionaires tax breaks = they will invest in America came from but it's not based on reality. Corporations already don't pay any taxes and they are still moving overseas. No, the solution to the debt crisis is not to trust in the crooks who created this disaster. Corporations should have to suffer with the rest of us for our governments mistakes. And suffer we will, the *solution* to our problems is going to suck big time. Chemotherapy makes you feel like **** but ultimately it's going to save your life.

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Who told you that nonsense?

I'll answer more specifically in a bit but since this is almost identical to something that was asked about 4 months ago, only with a bit less input by the OP, I figured I'd just paste that answer to start

Zyphlin said:

the makeout hobo said:

Republicans and conservatives have lately been championing two positions: one, that taxes need to be cut as low as possible, and that the deficit needs to be shrunk as small as possible. As I see it, by themselves the two are exclusive. Ignoring a change in spending, reducing revenue by cutting taxes means more money is borrowed and the deficit grows. So between cutting taxes and reducing the deficit, which would you say is more important?

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The premise is flawed.

First, you're asking a hypothetical in hopes of catching people in a hypocritical situation based in real life. However, spending IS an option in real life.

Second, you're hypothetical also assumes that somehow having more revenue coming into the government will magically make the deficit reduced. This somehow assumes that the government will not turn around and spend all that new money gained in ways they wouldn't had they not gained it, thus leaving the deficit at the same point but having us paying them more.

If somehow, someway, we lived in a black and white world where literally the ONLY choic was "Tax Cuts, High Deficit" or "Deficit Reduction, High Taxes" and in said magical world there was a garauntee that the money gained from lack of tax cuts would go directly to reducing the deficit then I'd say the second option.

However, that's like saying "If given a magical world where there's a choie between owning a unicorn or owning a dragon, I'd choose the dragon". Wonderful, I've chose a fantasy answer....doesn't really have much relevance to reality.

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Thread

Both are important. Spending and taxation must be at healthy levels for the economy and government. Neither should be neglected.

Now to make it more specific to you.

The simple answer - - - If faced with a hypothetical situation where we can either have A) Tax cuts from the current point with a guarantee of an unbalanced budget or B) Tax’s increases from the current point with a guarantee of a balanced budget then my option would be B.

The complex answer - - - Such a hypothetical is not a reality, there is no only two potential answers and the results of those answers are not unquestionably preordained. It also ignores the human factor that it is entirely possible to raise taxes and still have an unbalanced budget due to politicians simply using the fact that there are more taxes as a justification for passing more and more spending. It also provides additional political fodder to forgo cutting spending by stating that tax increases will be the solution. It is a rather hollow and partisan question not aimed at being honest or having real discourse but simply trying to play “gotcha” by presenting an unrealistic and fictitious scenario as a means to “catch” conservatives in a pathetic and ridiculous ploy.

My personal view has been stated a number of times on this forum, and if we’re talking about unrealistic things then I’d much rather it than the other unrealistic options presented here. That view is to have a 2.5% sales tax (Medicine, food, and lodging exempt) that is tied to a 5% yearly decrease in the budget and whose revenue goes specifically to paying down the debt and is unable to be used to fund any other government program. If the budget fails to be cut by 5% and actually remain under that then the 2% tax is removed from the books the start of the next fiscal year. Once our debt is paid off the tax would also sunset.

I generally am not a big fan of taxes. However, I do understand at times they have their use. The issue is rarely does it seem to be used for anything other than justification for more and more and more spending and growth. I would happily endure a 2.5% sales tax on almost everything I purchase for 5 years in exchange for the removal of the debt and a 25% cut in the Federal Budget. I would not stand a 1% increase however if the federal government refuses to significantly cut their own bloated and out of control spending or if they simply use it as a justification to pass more entitlement programs.

Digsbe is right. There IS a need for taxation. Its ridiculous to assume otherwise. However, taxes should be a mechanism of financing necessary government functions not instituting "fairness", make people who've been lucky or blessed help those that are less fortunante, punishment, or other such things. While there is definitely such a thing as undertaxation, so too is there over taxation as well as the societal message that is sent and inbred in people if you allow the tax brackets to be significantly skewed where a few people are supporting the entire system yet at the same time are being demonized as greedy do nothings who need to have more taken from them.

cpwill said:

we are in the mess we are in to no small part because we have consumed to the hilt; leveraging everything we have in order to afford the latest big-screen television. why in the world would we wish to continue to encourage this kind of behavior?

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Our economy is a capitalistic, consumption based economy... It's not simply an issue of personal choice, or individual behaviour. The entire economy encourages consumption, and the entire economy engages in it. Individual market choice is the foundation of Capitalism.

The market produces the product and free agents buy it... it's a billion dollar industry. Even the dumbest, most impractical sh*t has made people millionaires in America...

Pet Rock That Made Man A Multi-Millionaire In 6 Months Lives On | Pets Do

4 Million "Snuggies" sold... I have officially lost faith in humanity, page 2

This is a bit like asking "What's better - cookie crumbs or the whole cookie?"

Of course the balanced budget is more important. With option A, you not only get the tax cuts, but also get to add spending cuts, reduced government, and everything else that goes along with creating a balanced budget.

SheWolf said:

If you had to pick one or the other, which one is more important?

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The Reps burning need to balance the budget isn't about the economy. It's about cutting more jobs, raising the number of unemployed, and making Obama look bad, so bad he'll lose the election. Just more dirty politics.

Most politicians will do or say anything to get elected or reelected, especially those who live and breath politics, and have no other interests.

ricksfolly

Accidentally voted tax cuts, but balanced budget.

There is a lot going on for such a simple question. First is the concept of the balanced budget. Now, any one who knows me here knows that I strongly believe we have to act, and act soon(if not now...I say soon since I would delay heavy cutting till the economy recovers, 1 to 2 years) on reducing the deficit. However, a small amount of deficit spending is sustainable forever. GDP growth turns a small deficit into no problem. However, I do think we need to get to a balanced budget at least for awhile to let the GDP growth do it's thing with our current debt.

Lower taxes do, to an extent, stimulate growth. While, contrary to the belief of some, not enough to make up for the revenue loss if you are only looking at revenue, it does build for the future which is important. It is also possible to cut taxes and reduce spending. However...

...In the short term, doing both would have devastating effects on the economy. Federal spending makes up a huge fraction of GDP. I did the math in another thread I cannot find right now, and was actually shocked. I want to say maybe 10 %, but do not hold me to that number. Significantly reducing federal spending enough to both make a difference, and make up for revenue loss could very easily put us right back in a recession.

So what do I favor? Leave tax rates alone for now. Cut spending, first by forcing federal programs(this includes the military and every other federal program) to be more efficient. Cut budgets across the board every other year. The year you do not cut, you freeze them. A large, bipartisan commission looks at ways to make federal programs more efficient and save money. The military goes through another round of Base Closure commissions, looking for bases that can be closed without reducing readiness(this can be done and has been done).

Don't play politics with let's eliminate this program or that, since that will not get anything done. Democrats will cut republican programs, republicans will cut democrat programs, nothing will ever get through the senate, and the problem won't be fixed. Worry about what programs we do not need at all down the road.

Once the deficit is taken care of, we can look at lowering taxes and enjoying the benefits of higher growth, part of which is making the debt look smaller every year. The thing to remember though is that this is going to take time, probably a significant amount of time. Solving the deficit is not so simple as saying "cut spending, it's easy". It's not, and there will be significant repercussions that the same people saying "it's easy" will then bitch about.

Right now, neither party is serious about deficit reduction. Our politicians are playing games with the issue, but neither is actually working to solve it. If you create a bill you know will never get signed, you have done nothing to solve the problem. If you are not getting with the other party and working out what you can both agree on, you are a part of the problem, not the solution. I hate with a passion cynicism in politics. It's why I have the quote I have in my sig. However, on the subject of solving the deficit, I fear I am as cynical as any one.

SheWolf said:

If you had to pick one or the other, which one is more important?

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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.

I’ll stay in the box of the thread.
I voted ‘a balanced budget (no growth in debt).’

I say, maybe we need a constitutional amendment requiring a balanced budget.
1. Neither Congress nor the President can override
2. All off budget items are included in the budget
3. Budget must be balanced by eliminating expenditures and no by raising taxes
4. No exception can be made for emergency

I will vote C.--Tax Cuts--Balanced Budget--Prosperity--Destroying Liberalism


Federal Tax Revenue AFTER......The Reagan Tax Cuts




Federal Tax Revenue AFTER.......The Bush Tax Cuts


We The People were given a bigger allowance........and Tax Revenue increased....defying all laws of liberal economics.

The Democrat Party and its universal solution of more taxes and more regulation is killing this country......
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haymarket said:

nor will repeating right wing talking points based simply upon faith and belief.

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i've demonstrated to you several times the futility of raising rates hoping to get a static increase in revenue. i have even demonstrated to you the high likelihood that raising rates will see you get little to no revenue.

people seek to avoid a high tax burden. those with the most means have the most ability. what about those basic facts is a right wing talking point?

SheWolf said:

If you had to pick one or the other, which one is more important?

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Balanced budget with a couple caveats: 1) It is a REAL balanced budget, no accounting gimmicktry such as using social security surplus's to offset federal spending. 2) A hard freeze in current tax rates and user fees. 3) No emergencies 4) Any surplus would be applied to debt. 5) A balanced budget amendment to the constitution. 6) The United States government would have to submit to using similar accounting practices which are used by regular business.

Failing to meet any one of these 6 requirements would then amount to a mandatory tax decrease to be enacted as part of the law.

Both!!!!!!!!

SheWolf said:

Our economy is a capitalistic, consumption based economy... It's not simply an issue of personal choice, or individual behaviour. The entire economy encourages consumption, and the entire economy engages in it. Individual market choice is the foundation of Capitalism.

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no, our tax system and a dozen other systems (to include our "cheap money" system) encourage consumption. capitalism in and of itself would encourage a balance between savings and investment - not a negative savings rate.

either way the point is moot. at this point attempting to encourage more consumption is pushing on thread - the American consumer is leveraged to the hilt and his government along with him.

because when you spend more than you take in, eventually you run out of money.

now the question becomes, will all of those who have voted in favor of the balanced budget option support Senate Republicans when they put up just such a bill?


my bet will be that many of them do not.

Balanced Budget, reduce spending first. Then we can afford tax cuts