+- MacResource (https://forums.macresource.com)
+-- Forum: My Category (https://forums.macresource.com/forumdisplay.php?fid=1)
+--- Forum: 'Friendly' Political Ranting (https://forums.macresource.com/forumdisplay.php?fid=6)
+--- Thread: Tax Breaks vs. Budget Cuts... maybe we should try both? (/showthread.php?tid=112726)
Pages:
1
2
Tax Breaks vs. Budget Cuts... maybe we should try both? - DaveS - 02-27-2011
(Hey Ted, found that $100 billion we went looking for ... x2)
House leaders are unfortunately restricting their proposed budget cuts for the remainder of fiscal year 2011 to nonsecurity discretionary spending in an attempt to tame a $1.3 trillion deficit. This approach is especially shortsighted since the Federal Treasury loses twice as much revenue due to tax breaks than Congress appropriates on all nonsecurity discretionary spending.
Most Americans would be surprised to learn that tax breaks are not on the table during any budget negotiations. In fact, Congress has the Congressional Budget Office prepare an official spending estimate for the cost of all programs or their expansions. Meanwhile, Congress enacts and continues tax breaks without any requirement that the cost of tax breaks be calculated and shared with members before a vote.
That’s why, over the last 16 years, the cost to the Treasury of the mortgage interest tax deduction, for example, doubled from $48 billion in 1995 to nearly $100 billion this year and no one made a peep about getting control of this loss in revenue. The stunning growth in this tax break is unchecked and unquestioned.
The chart below compares the 10 safety-net programs slated for deep cuts with the cost of the tax breaks that should also be considered for reduction or elimination to bring the budget into balance. The column on the left is a list of safety-net programs that have already been targets of the House leadership’s budget ax. The column on the right is the cost to specified tax breaks (see bottom of page for sources).
more at:
http://www.americanprogress.org/issues/2011/0/tax_breaks_infographic.html
Re: Tax Breaks vs. Budget Cuts... maybe we should try both? - cbelt3 - 02-27-2011
The mortgage tax break is a key element in the political goal of post WWII America. Single Family home ownership for everyone. A chicken in every pot, and a chevy in every garage. And the extreme pressure to make mortgages available to *everyone* is, of course, one of the proximate causes of the bust that we're in.
I have a feeling that pushing that agenda will only serve to make the real estate collapse continue.
However....
President Obama's reference to the tax code in recent speeches give me some hope. The code badly needs to be nuked and paved.... it's such an awful amalgamation of special interests and social engineering that a lot of bad decisions are driven based on 'tax rules'. Rather than targeting one sacred deduction after another, it would be more palatable to the electorate to clean off ALL the crap from the tax code and reengineer it to be truly 'fair'.
Yes... I AM one of those 'flat tax' believers. :oldfogey:
Re: Tax Breaks vs. Budget Cuts... maybe we should try both? - mattkime - 02-27-2011
>>Most Americans would be surprised to learn that tax breaks are not on the table during any budget negotiations.
but not anyone who's been paying attention. they should be.
oh, and simplified tax system? yes, please!
Re: Tax Breaks vs. Budget Cuts... maybe we should try both? - Acer - 02-27-2011
Flat tax with a flat, per-person annual refund equivalent to the tax on the first 20,000 of income, even if no income was earned. All income taxed regardless of source, including interest, dividends and capital gains and pensions. Index the 20,000 figure to the CPI going forward. Withheld by employer. Tax form would be about half a page.
Think of the savings by reducing the IRS to one-tenth its current size! Nothing is off the table, right???
Re: Tax Breaks vs. Budget Cuts... maybe we should try both? - Mac1337 - 02-27-2011
You left out the biggest piece of the puzzle. What rate?
Re: Tax Breaks vs. Budget Cuts... maybe we should try both? - Ted King - 02-28-2011
I mentioned about the $100 billion in spending cuts because that is what the Republicans said they would do. I actually think that spending cuts now are a bad idea. We are not safely out of the danger caused by the near depression-level collapse of the economic system. We need more stimulus for a couple of more years - even at the cost of increasing the debt. I am convinced by those economists who say that over the long run the greater economic activity now will lead to increased economic activity in the future that will more than make up for the cost of the additional stimulus. The cutting of spending that will probably happen won't have much of a long term effect of reducing the national debt, but it will prolong high unemployment and suppress consumer demand (the lack of consumer demand being identified as the number one economic problem by business people). The cynical side of me suspects that many Republicans know that reduced spending will prolong the negative effects of the near economic collapse, which will reduce the chances of Obama getting reelected in 2012.
But once the economy isn't struggling so badly, I would agree that getting the budget deficit down much smaller or eliminating it would be a good idea. If it were up to me and most liberals, we'd do most of the balancing by raising taxes on the wealthiest Americans. But I understand that we are a pluralistic society where many people think that the balancing should be done entirely by spending cuts. The logical compromise then is to balance the budget by a combination of both spending cuts and raising taxes - hopefully primarily on the wealthiest. But that would require Republicans to, you know, actually compromise with Democrats with respect to taxes.
Re: Tax Breaks vs. Budget Cuts... maybe we should try both? - rankandfile - 02-28-2011
Ted King wrote:
many Republicans know that reduced spending will prolong the negative effects of the near economic collapse, which will reduce the chances of Obama getting reelected in 2012.
You got that right.
I don't think we will ever "fix" the problem without overhauling the tax structure; for example, Exxon-Mobil paid $15 billion in taxes in 2009, but not a penny to the US Treasury. The list goes on...
Re: Tax Breaks vs. Budget Cuts... maybe we should try both? - DaveS - 03-01-2011
Ted King wrote:
I mentioned about the $100 billion in spending cuts because that is what the Republicans said they would do. I actually think that spending cuts now are a bad idea. We are not safely out of the danger caused by the near depression-level collapse of the economic system. We need more stimulus for a couple of more years - even at the cost of increasing the debt. I am convinced by those economists who say that over the long run the greater economic activity now will lead to increased economic activity in the future that will more than make up for the cost of the additional stimulus.
I know I'm being a little snide here but are you really stating that "voodoo economics" actually works????
Ted King wrote:
The cynical side of me suspects that many Republicans know that reduced spending will prolong the negative effects of the near economic collapse, which will reduce the chances of Obama getting reelected in 2012.
Politics, Republicans and Elections.... and your cynical... come on now.
Ted King wrote:
But once the economy isn't struggling so badly, I would agree that getting the budget deficit down much smaller or eliminating it would be a good idea. If it were up to me and most liberals, we'd do most of the balancing by raising taxes on the wealthiest Americans.
Yes and I would agree with you.
Ted King wrote:
But I understand that we are a pluralistic society where many people think that the balancing should be done entirely by spending cuts.
Just for the record I would consider this to be an act of stupidity,
Ted King wrote:
The logical compromise then is to balance the budget by a combination of both spending cuts and raising taxes - hopefully primarily on the wealthiest. But that would require Republicans to, you know, actually compromise with Democrats with respect to taxes.
I will only ask at what point do "poor" people need to contribute?
Re: Tax Breaks vs. Budget Cuts... maybe we should try both? - rankandfile - 03-01-2011
DaveS wrote:
I know I'm being a little snide here but are you really stating that "voodoo economics" actually works????
"Voodoo economics" refers to supply side theory. Stimulus spending is a demand side approach.
George H. W. Bush referred to Reagan's economic plan as voodoo economics when Bush ran for President in 1980.
Supply side won't work when interest rates are at the "zero bound". Demand side, properly done, will. It's straight out of Keynes.
Re: Tax Breaks vs. Budget Cuts... maybe we should try both? - Lux Interior - 03-01-2011
DaveS wrote:
I will only ask at what point do "poor" people need to contribute?
Why do "poor" (I don't know why you put it in quotes) people need to contribute? Most of the wealth is concentrated at the top, therefore, it makes sense that they pay most of the taxes. They would pay most of the taxes under almost any system. Even a flat tax.
You can increase the taxes on the poor, if that's what you want to do in the name of fairness, but what does that accomplish? It makes the poor poorer and more reliant on social programs. So you're sucking money from the people who have the least so you can give it back to them.
Sounds very inefficient to me.