Tax Mythbuster Speaks Out

[Boghie]

Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

To All,

The proposed tax increase on the Top 2% will generate about $70 Billion per year if the rich do not adjust their finances to remediate against the increase. Thus, the $70 Billion is a best case scenario. Here is a Federal Revenue/Spending/Deficit chart from FY1996 through June of FY2012 (There are three months left in FY2012 with a best deficit estimate of -$1.2 Trillion):



I could not even freehand the affect of an additional $70 Billion in revenue. The FY1998 surplus was actually $70 Billion - see the green bar for how much that affects things...

The only way to resolve this mess is to cut spending to FY2007 inflation adjusted, and then initiate a wide band tax increase till we close the gap. The tax increase is necessary because we absolutely have to pay for the recent largess. However, I will not freely accept a tax increase unless it is something everyone pays into (no credits and no write-offs) and only after I see real and substantial cuts. I have not seen ANY real and substantial cuts.

And, I can watch you

 

[burrocrat]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

I say let's wipe the income tax and all it's loopholes. Nothing comes out of your pay until you transact. Then you will pay. I don't care if that's called a fair or a flat tax. But it dang well better be fair and flat for everyone. Talk about diversity and inclusion? All pay just the same. Trustfunders, politickians, lords of commerce, the illusory middle class, pimps and h'os, all the same.

Buy a yacht? You pay. Buy a car? You pay. Buy a coke and a double fat burger? You pay. Condoms and thongs? You pay too. Droopy drawers? Yep, you pay. Widen the base, nobody escapes. Same for all.

And raise prices immediately, acoss the board to cover it. That way there is no hiding the theft of labor/wealth. No crap? You mean my nachos now cost $5 instead of $2.50? Maybe i've lost my appetite. Want to buy some crack? Of course we won't tax you on that, but when your dealer buys new bling he's gonna pay. Which ensures you will too.

Tax consumption. Go ahead have all you want. Just pay for it. Bonus is that saving and frugality are rewarded. How middle class.

 

[Birchtree]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

" The tax rates should be raised on all the slugs that are too lazy toi do an honest days work."

 

[burrocrat]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

Dude, that's the whole problem. If they don't do an honest days work they don't have any money to pay taxes. Luckily they don't need any money because everything is free. Courtesy of the taxpayers. Don't you see?

" The tax rates should be raised on all the slugs that are too lazy toi do an honest days work."

 

[burrocrat]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

Oops, i'd like to retract those last statements. I thought i was somewhere else. Sorry bohgie.

 

[Boghie]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

Here is our current Revenue, Spending, and Deficit since FY1997.



The last two columns are FY2012 projected numbers and FY2012 projections + the Presidents tax on the Top 2%.
Is there anyone out there with sharp enough eyes to see the difference?
I'm guessing that tax increases won't make a dent.
I think the problem is somewhere else.
Where could that possibly be.
Can't figure it out.
Yowser.

 

[Boghie]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

I think you've made an argument for Greenspans reccomendation...Get rid of the Bush tax cuts...for all.
Greenspan says Bush tax cuts should expire for all - Jul. 16, 2010

Going back to 2000 rates plus keeping spending at 2007 levels would do it.

Wouldn't that be a true "bi-partisan" budget agreement?

Then when you start running surpluses again, the surpluses become the amount that taxes could be reduced...or cut additional spending for more tax cuts.

That would be how a business would establish its budget...why would we be any different?

Great idea FWM, but let us do it in stages and perform a 'lessons learned' as we progress. Since it is obviously unpalatable for politicians to reinstate the 'marriage penalty', tax retired folks living off dividends higher, reduce the child care credits, etc. to get us back to the President Clinton era tax code perhaps we should do what we can and take it from there. To compound things, simply changing the revenue structure to FY2000 is only half the equation of the Great Clinton Era of America - we also have to look at the spending side since we are winding down the Bush era as we speak (we are four years into that, eh).

Thus, let us take baby steps.

Instead of forcing politicians to enact Taxaggedon (they WILL be blamed for inaction, see 2010) let us simply take spending to FY2007.

That leaves us with an FY2013 deficit of somewhere around $287 Billion.

Then, I will gladly accept a tax increase. With the marriage penalty, the dividends tax on oldsters, the reduction in all sorts of credits, and an additional levy on the plutocrats we will run a decent surplus. Now, that is something I can vote for. But, show me something first. Come on, show some leg...

 

[Boghie]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

Psst., FWM,

I'll give you the Clinton Tax code if you give me the Clinton Spending - even inflation adjusted...

Taking FY2000 (the FY for the largest surplus) we should be spending $2,383 Billion. Our current projected FY2012 revenue is $2,441.
So, inflation adjusted, we would be running a $58 Billion dollar surplus - without a single dime of tax increases.
But, FYM, I'll gladly accept a tax increase after paring spending to the Great Clinton Era.
Then we could pay down the debt of the Failed Bush/Obama policies.

Wow, that was easy. Low hanging fruit.

Then again, we are spending $3,653 Billion. Where did that $1,310 go. Each and every year.

Quintilius Varus, give me back my legions!

 

[Boghie]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

“Endless borrowing is not a strategy; spending cuts have to come first.”

Wow, I wish I had said that...
Actually, I have. But this article is amazing...

 

[Aitrus]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

If you cut spending too much...you risk a double dip recession.
If you raise taxes too much all at once...you risk a double dip recession.
Has to be a good balance of both. Heard this from several economists.
I'm not an economist but I play one on the Internet. :toung:
Guess we all do

Baloney. Government spending doesn't drive our economy. Private sector does.

IMHO, The solution is threefold.

1 - Even out taxes for everybody - that means that some get a lower tax break while others will have theirs increased. It's going to be painful when we first do it, but the long-term benefits are worth it. Start out at 10%. You are taxed on the total amount you make in the year, to include overseas holdings. Example: somebody made $50k, had $3k increase in their 401k / savings accounts, and they sold a house for a profit of $10,000. They're taxed 10% on $63k, or $6,300. In exchange, get rid of all federal-level taxation rules. This means no death taxes, no real estate taxes, no sales taxes, etc. You pay to the government only once, or by deductions in your paycheck.

2 - Cut spending across the board by a certain percent. Start with 10%. Nobody is immune. No sacred cows. All programs take a 10% cut, so everybody feels the pinch. No increases in spending, no increases in the debt ceiling except to adjust for inflation.

3 - The Flat Tax rate can be increased or decreased, but only via popular vote, and only by 0.5% at a time.

Do this for 2 years, then let's see where we stand. If that's enough, then we stop right there and carry on. If we need to cut spending more, then we do that. If the populace votes to increase revenues, then they can do that as well.

 

[Boghie]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

Tempted to say yes...but...that means all the Clinton taxes come back.
If you cut spending too much...you risk a double dip recession.
If you raise taxes too much all at once...you risk a double dip recession.
Has to be a good balance of both. Heard this from several economists.
I'm not an economist but I play one on the Internet. :toung:
Guess we all do

FWM,

Inflation adjusted, 'The Great Clinton Revenue Stream of the Dot.Com Boom and Tax Code' would result in the following:

• Revenue: $2,698 Billion (FY2000 Revenue of $2,025 inflation adjusted)
• Expenses: $3,653 Billion (Current FY2012 Projection)

Thus, we have to cut a cool Trillion off spending to get a balanced budget.

Are you just being vindictive on Wealthy Plutocrats regarding the possible $70 Billion that President Obama's Top 2% tax increase will provide. You are only closing 7% of the deficit - leaving about $930 Billion untouched. Even Bush never touched $930 Billion in deficit spending - the highest he ever had was $455 Billion. That is less than half of your dream deficit.

We have got to be serious. Tax increases on the rich will not substantially help - thus it is a diversion and a fig leaf.

I ask again, what have we received by making the Stimulus spending Structural spending?

I ask again, why should I vote for tax increases on myself (since tax increases on the rich will not clear the deficit or make it manageable I know that the next bell will toll for me) until I see the newfound structural spending cut dramatically. And, don't give me 10 year numbers - I can watch you...

 

[Boghie]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

Baloney. Government spending doesn't drive our economy. Private sector does.

IMHO, The solution is threefold.

1 - Even out taxes for everybody - that means that some get a lower tax break while others will have theirs increased. It's going to be painful when we first do it, but the long-term benefits are worth it. Start out at 10%. You are taxed on the total amount you make in the year, to include overseas holdings. Example: somebody made $50k, had $3k increase in their 401k / savings accounts, and they sold a house for a profit of $10,000. They're taxed 10% on $63k, or $6,300. In exchange, get rid of all federal-level taxation rules. This means no death taxes, no real estate taxes, no sales taxes, etc. You pay to the government only once, or by deductions in your paycheck.

2 - Cut spending across the board by a certain percent. Start with 10%. Nobody is immune. No sacred cows. All programs take a 10% cut, so everybody feels the pinch. No increases in spending, no increases in the debt ceiling except to adjust for inflation.

3 - The Flat Tax rate can be increased or decreased, but only via popular vote, and only by 0.5% at a time.

Do this for 2 years, then let's see where we stand. If that's enough, then we stop right there and carry on. If we need to cut spending more, then we do that. If the populace votes to increase revenues, then they can do that as well.

Aitrus,

We DO NOT NEED a tax increase or a change in the tax code. Our current revenue stream aligned with the FY2007 spending (inflation adjusted) would result in:

• Revenue: $2,442 Billion
• Spending: $3,020 Billion
• Deficit: $578 Billion

That still leaves too much of a deficit. But, I think it important to note that we are not in the middle of an Iraq war surge. Thus, cut $50 Billion off. Get spending down to at least $3,020 Billion and I will look at revenue stream enhancements (yuk, yuk). And, if the supply siders are correct, the GDP - and hence the tax base - will increase to cover much of that deficit. The FY2007 revenue stream generated $2,842 Billion. That would mean a deficit of $178 Billion - or just about 15% of this years projected deficit.

But, our current spending is $3,653 Billion. That $633 Billion is pure fat. Give me that cut - or show me actual cuts progressing to such a goal in a reasonable timeframe (3 years) - and I will help out with revenue. Let us start with the absolutely huge tax credits Bush put in as a sop to the masses.

But, as I have told everybody before. I can watch them...
I, for one, will NOT listen to politicians. I will watch the spending...

 

[nnuut]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

Just create more private sector jobs that will create more revenue, it's simple don't make it so difficult.

 

[Warrenlm]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

"Can you account for what additional spending is going on right now to drive those numbers so high?"

Fortunately many benefits programs have stepped forward to fill the gap. When we reach an even 50% being supported permanently by the other 50% the budget is balanced.

 

[Birchtree]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

The Romney team may propose taxing interest from municipal bonds - I think that's fair where I pay 15% on my equity dividend income.

 

[burrocrat]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

Saw no reply from Burro but did see that he indeed liked this

i don't see an asterisk in the thread title so i will try to tread lightly. this is my tax position:

http://www.tsptalk.com/mb/taxes-insurance/10197-tax-mythbuster-speaks-out-2.html#post370060

however, i am a practical man and realize that has no chance of happening, so i'll clarify a bit and offer a few alternate proposals. we may have more in common than you think. for the record:

1) let the bush tax cuts expire, across the board. can't wait for sequestration. anytime we trade permanant contibution increases and perpetual pay freezes for a years worth of free stuff for everybody we get hosed. just ask the natives who used to live on long island how they likin those trinkets now.

or

2) raise taxes now to accomplish a revenue nuetral budget. no deficits. none. if we want it we pay for it first. quit hiding the true cost of our collective largesse. yes the sticker shock will be shocking. that's the whole point. but it's way more honest than promising folks we'll pay them two hamburgers on tuesday for one hamburger we can't afford today.

or

3) quit spending. i mean it. quit spending. we can't afford it. the cookie jar is empty. so quit spending.

i realize that any and all of these solutions are going to hurt. and they're going to hurt me. i have no illusions that some magic pot of promised money is going to show up in my golden years to make good on the promises i've been fed. it already got borrowed against and spent. and the only way to keep the machine turning is to take more from somebody else. like the young, but they are not falling for this three card monty scam we raised them too smart for that. or the rich, but they're not falling for it either because they can afford lobbyists and accountants and lawyers. so it's time to go on a diet. not tomorrow. right now. and not at someone else's table, if you want something done right do it yourself.

that is my proposal to save the dream. if we don't pull it off we will be begging for cucumbers and feta scraps at club med soon enough. i don't expect anyone to vote for that. or even accept it willingly. but if we don't fix it the market will.

i'm ready. are you?

 

[FAB1]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

i don't see an asterisk in the thread title so i will try to tread lightly. this is my tax position:

http://www.tsptalk.com/mb/taxes-insurance/10197-tax-mythbuster-speaks-out-2.html#post370060


i'm ready. are you?

You left out #4) (this is my fav)
Hire more Teachers and other Union workers pay them a hefty salary - they will eat in the restaurants, problem solved! (someone switched off the teleprompter again, dang!)

 

[burrocrat]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

You left out #4) (this is my fav)
Hire more Teachers and other Union workers pay them a hefty salary - they will eat in the restaurants, problem solved! (someone switched off the teleprompter again, dang!)

that didn't work out so well for wisconsin.

[video]http://m.youtube.com/#/watch?desktop_uri=%2Fwatch%3Fv%3D--glFBwA0E8&v=--glFBwA0E8&gl=US[/video]


excuse me, do i have any mud on my face?

 

[FAB1]

Re: Tax Mythbuster Speaks Out - Will a Tax Increase make a difference...

that didn't work out so well for wisconsin.

[video]http://m.youtube.com/#/watch?desktop_uri=%2Fwatch%3Fv%3D--glFBwA0E8&v=--glFBwA0E8&gl=US[/video]


excuse me, do i have any mud on my face?

No, not that I can tell.

Im just the messenger of that little ditty above - was actually said to some group recently...you cant make this stuff up!

 

[Boghie]

FY2007 \ FY2012 Spending Comparison...

Well FWM,

You asked for it, you got it. Here is a spreadsheet of spending in FY2007 and FY2012 (projected):



Note the growth in Social Security and Heath and Human Services. That is largely Social Security and Medicare/Medicaid. There is about $30 Billion in increased Food Stamp services. Labor has unemployment and training benefits.

Thus, a quick read on the situation is that we can cut $400 Billion without touching benefits.
Once that is achieved I will gladly vote myself a tax increase if necessary...

The scary thing is the interest debt. The interest rate in 2012 is about half that of 2007. What is going to happen to that budget line item when interest rates go back to normal? Just asking...