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Balancing the Budget Wouldn't Be That Difficult

jpn

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It wouldn't be that difficult if we had reasonably sane people in positions of power, that is.
(I've adapted the following from this article.)

Here are four painless things we could and should be doing:

1) Get wealthy Americans to pay the taxes they legally already owe. The net tax gap — taxes Americans are legally obliged to pay but don’t — is simply huge, on the order of $600 billion a year. There'll always be tax cheats, but restoring the IRS budget would let them crack down on wealthy tax cheats. (Of course, the GOP is doing the exact opposite, strangling the IRS of funds because Republicans don't like making people pay their legal share. Government tyranny!!!).

2) Crack down on Medicare Advantage overpayments. A Center for American Progress estimate found that Medicare is at risk of overpaying [Medicare Advantage] plans between $1.3 trillion and $2 trillion over the next decade. Elon Musk, where are you? Oh yeah, you're ending cancer research and stopping life-saving aid overseas. Great.

3) Get serious about corporate tax avoidance. Multinational firms use shady and dishonest strategies to make profits actually earned in the United States disappear and reappear in low-tax nations like Ireland. International cooperation, amending tax laws, and public shaming would help reduce the annual loss of tens of billions.

4) Let Donald Trump’s 2017 tax cut lapse. It wasn’t a response to any economic needs, and there’s not a shred of evidence that it did the economy any good. All it did was transfer a lot of money to corporations and the wealthy.

These provisions wouldn't be enough to balance the budget, but they would certainly slow the expansion of the debt to GDP ratio, and perhaps be enough to reverse it.

After all this, balancing the budget would only require the highest tax bracket to be raised by a few percentage points.
 
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It wouldn't be that difficult if we had reasonably sane people in positions of power, that is.
(I've adapted the following from this article.)

Here are four painless things we could and should be doing:

1) Get wealthy Americans to pay the taxes they legally already owe. The net tax gap — taxes Americans are legally obliged to pay but don’t — is simply huge, on the order of $600 billion a year. There'll always be tax cheats, but restoring the IRS budget would let them crack down on wealthy tax cheats. (Of course, the GOP is doing the exact opposite, strangling the IRS of funds because Republicans don't like making people pay their legal share. Government tyranny!!!).

2) Crack down on Medicare Advantage overpayments. A Center for American Progress estimate found that Medicare is at risk of overpaying [Medicare Advantage] plans between $1.3 trillion and $2 trillion over the next decade. Elon Musk, where are you? Oh yeah, you're ending cancer research and stopping life-saving aid overseas. Great.

3) Get serious about corporate tax avoidance. Multinational firms use shady and dishonest strategies to make profits actually earned in the United States disappear and reappear in low-tax nations like Ireland. International cooperation, amending tax laws, and public shaming would help reduce the annual loss of tens of billions.

4) Let Donald Trump’s 2017 tax cut lapse. It wasn’t a response to any economic needs, and there’s not a shred of evidence that it did the economy any good. All it did was transfer a lot of money to corporations and the wealthy.

These provisions wouldn't be enough to balance the budget, but they would certainly slow the expansion of the debt to GDP ratio, and perhaps be enough to reverse it.

After all this, balancing the budget would only require the highest tax bracket to be raised by a few percentage points.
Don't forget about rolling back Bush's equally irresponsible and needless tax cut that expanded the debt by trillions and counting.
 
It wouldn't be that difficult if we had reasonably sane people in positions of power, that is.
(I've adapted the following from this article.)

Here are four painless things we could and should be doing:

1) Get wealthy Americans to pay the taxes they legally already owe. The net tax gap — taxes Americans are legally obliged to pay but don’t — is simply huge, on the order of $600 billion a year. There'll always be tax cheats, but restoring the IRS budget would let them crack down on wealthy tax cheats. (Of course, the GOP is doing the exact opposite, strangling the IRS of funds because Republicans don't like making people pay their legal share. Government tyranny!!!).

2) Crack down on Medicare Advantage overpayments. A Center for American Progress estimate found that Medicare is at risk of overpaying [Medicare Advantage] plans between $1.3 trillion and $2 trillion over the next decade. Elon Musk, where are you? Oh yeah, you're ending cancer research and stopping life-saving aid overseas. Great.

3) Get serious about corporate tax avoidance. Multinational firms use shady and dishonest strategies to make profits actually earned in the United States disappear and reappear in low-tax nations like Ireland. International cooperation, amending tax laws, and public shaming would help reduce the annual loss of tens of billions.

4) Let Donald Trump’s 2017 tax cut lapse. It wasn’t a response to any economic needs, and there’s not a shred of evidence that it did the economy any good. All it did was transfer a lot of money to corporations and the wealthy.

These provisions wouldn't be enough to balance the budget, but they would certainly slow the expansion of the debt to GDP ratio, and perhaps be enough to reverse it.

After all this, balancing the budget would only require the highest tax bracket to be raised by a few percentage points.
I would support all of that.
 
Seeing your thread title I became elated, though the OP reversed that feeling as it set the thread on a path of partisan argument.
In reality, balancing the Federal budget would be quite simple, IF we could just put aside left/right lean and begin a discussion with intent to resolve the issue.
Below is my solution with most recent changes:
1. Each individual with a total income equal or greater than 1/4 the Federal minimum wage, ( $7.25 x 2085 / 4 ) should be required to file and pay Federal income tax.
2. Total gross income, regardless of source or form would be taxed with no allowed exemptions, deductions, loopholes, adjustments.
3. There would be 5 permanent progressive tax rates of 15%, 20%, 25%, 30%, 37%.
4. The 5 tax rates would be applied to income of up to 1, 2, 3, 4, and greater than 4 times the GNI per person, with tables adjusted each year relative to the GNI per person.
5. Any projected Federal budget deficit would be resolved, when possible, by a surtax multiplier applied to the tax owed, not to exceed a predetermined maximum.
6. Any revenue surplus would be left for Congress to decide if it should be used to reduce the debt, and/or be used by those with gross income in the lower 4 OR just the lowest tax bracket(s) as a surtax multiplier of less than 1.
7. FICA tax and associated Trust funds would be eliminated, and made part of the Public held debt allowing Social Security and Medicare to be administered and funded through the general revenue fund.
8. Social Security benefits would no longer be associated with FICA taxable income, but primarily on age and citizenship. Details still a work in progress.
9. There would be 11 annually inflation adjusted Social Security benefit amounts determined by the age one first begins receiving benefits. ( Remains a work in progress. )
10. Naturalized citizens, who were naturalized at age 45 or more would be ineligible for reduced benefits at an age less than 67.
 
Don't forget about rolling back Bush's equally irresponsible and needless tax cut that expanded the debt by trillions and counting.

Indeed. The reality is that a good chunk of the 'middle class' also needs to be paying more. But good luck ever winning an election promising to raise taxes.

People would much prefer screaming about "cutting waste", at least until they find out their access to health care has been deemed "waste".

They'd also much rather kicking the can down the road so that, I suppose, they can watch the US's finances collapse from the comfort of a nursing home while their children and grandchildren strive n' struggle to climb out of the whole grandpa and great-grandpa dug.



I'm actually rather fiscally conservative, but not in the way anyone else who calls themselves a fiscal conservatives means. I'm not about cutting every last dollar of spending that helps Americans in the name of tax cuts for the richest, oh no. I want the rich to pay a lot more, and indeed, people in my shoes to pay more. If it weren't for Bush, Trump 1, and the coming Trump 2's tax cuts, we'd probably have wobbled between surplus years and mild deficit years; if at least some of Reagans tax cuts disappeared on top, we wouldn't have a debt of any real significance.

And maybe less people would be able to replace their iphone every year. Hell, we'd have financial room to do things on top of what we do for people, re: upper education, childcare, healthcare, etc.
 
Indeed. The reality is that a good chunk of the 'middle class' also needs to be paying more. But good luck ever winning an election promising to raise taxes.

People would much prefer screaming about "cutting waste", at least until they find out their access to health care has been deemed "waste".

They'd also much rather kicking the can down the road so that, I suppose, they can watch the US's finances collapse from the comfort of a nursing home while their children and grandchildren strive n' struggle to climb out of the whole grandpa and great-grandpa dug.

The tax exclusion of employer-based health insurance is costing almost $400 billion this year. Pare that back and we're looking at hundreds of billions of dollars in new revenue every year without even having to touch rates.
 
Below is my solution with most recent changes:
1. Each individual with a total income equal or greater than 1/4 the Federal minimum wage, ( $7.25 x 2085 / 4 ) should be required to file and pay Federal income tax.
This would be a huge hit on the poorest Americans who already pay local, state, and federal payroll taxes.
2. Total gross income, regardless of source or form would be taxed with no allowed exemptions, deductions, loopholes, adjustments.
Pie in the sky. Every exemption and loophole is backed by one or more powerful constituencies. (The same is true of my suggestions, but, I think, less so).
3. There would be 5 permanent progressive tax rates of 15%, 20%, 25%, 30%, 37%.
Top rate isn't high enough. The top bracket can easily absorb a 50% rate, although I'd settle for 42%.
5. Any projected Federal budget deficit would be resolved, when possible, by a surtax multiplier applied to the tax owed, not to exceed a predetermined maximum.
Wouldn't that act like an automatic drag on the economy during recessions--the opposite of what is needed to pull us out of an economic downturn?
 
Below is how your tax bill would have been determined this year relative to your gross income without any deductions or adjustments. My taxes would have been about $1,700 more; my income put me in the top 10% of filers, 3rd tax bracket.

MyTaxTable.png
 
Indeed. The reality is that a good chunk of the 'middle class' also needs to be paying more. But good luck ever winning an election promising to raise taxes.
I disagree. We pay enough. The wealthy get off like bandits, however.
 
The tax exclusion of employer-based health insurance is costing almost $400 billion this year. Pare that back and we're looking at hundreds of billions of dollars in new revenue every year without even having to touch rates.
Wouldn't that cause those employees to lose their health insurance?
 
Wouldn't that cause those employees to lose their health insurance?

It would help decouple health benefits from jobs, sure, but that doesn't mean not having health insurance at all.
 
This would be a huge hit on the poorest Americans who already pay local, state, and federal payroll taxes.
Perhaps if you read to the end before making complaints, you would see that to be untrue.

Pie in the sky. Every exemption and loophole is backed by one or more powerful constituencies. (The same is true of my suggestions, but, I think, less so).
The Federal income tax code should apply to all equally, but progressively. AND, what I posted has nothing to do with business/corporation taxes, just individuals.

Top rate isn't high enough. The top bracket can easily absorb a 50% rate, although I'd settle for 42%.
The top rate IS high enough, considering it is GROSS income that is being taxed, AND a surtax applied IF the CBO finds it necessary.

Wouldn't that act like an automatic drag on the economy during recessions--the opposite of what is needed to pull us out of an economic downturn?
Perhaps the surtax should be applied ONLY on those in the 2nd or higher tax bracket OR just the top tax bracket?

As I said, we need to begin a discussion with intent to RESOLVE the issue. I'm open to making changes where they can be found necessary.
 
It would help decouple health benefits from jobs, sure, but that doesn't mean not having health insurance at all.
I've always thought workers would benefit more from receiving the cost of health benefits paid by the employer in their paychecks, leaving them to buy the health insurance they find adequate. What would that be, about $6.00 an hour pay increase?
 
I disagree. We pay enough. The wealthy get off like bandits, however.
Sadly, we can't undo the past, but the longer we put off fixing past wrongs the worse it gets.
 
I disagree. We pay enough. The wealthy get off like bandits, however.
What would you say the middle class income is, low to high?
 
I've always thought workers would benefit more from receiving the cost of health benefits paid by the employer in their paychecks, leaving them to buy the health insurance they find adequate. What would that be, about $6.00 an hour pay increase?

Employers were kicking in over $19,000 last year for the average family plan. So that’s more than $9/hour in hidden compensation costs—if that were converted into taxable wages, maybe $6-7 something an hour in additional take-home, depending on the bracket?
 
Employers were kicking in over $19,000 last year for the average family plan. So that’s more than $9/hour in hidden compensation costs—if that were converted into taxable wages, maybe $6-7 something an hour in additional take-home, depending on the bracket?
Hourly paid workers, regardless of bracket. Perhaps insurance companies could work out deals with companies to provide low cost plans which employees could select and have deducted from their pay, if they wanted, OR go out own their own and find something better or more appropriate for their needs.
 
Indeed. The reality is that a good chunk of the 'middle class' also needs to be paying more.

Then after you blow that money, you'll go after the low income class, the way your beloved Nordic shithole countries do with their 25% vat.

I want the rich to pay a lot more,

Blue states soak the rich, and guess what, the rich leave - in droves. You'll find out when the 2030 census comes around and house seats and EC votes get transferred from blue states to red states.

And maybe less people would be able to replace their iphone every year.

Right, instead of people using their money to benefit themselves, they should give it to the filthy government to squander.

Why don't you just go full commie and take it all, since mommy government knows how to spend it best.
 
It wouldn't be that difficult if we had reasonably sane people in positions of power, that is.
(I've adapted the following from this article.)

Just to clarify, Krugman's article said nothing about balancing the budget, which I'm sure he understands would not be a good thing.


2) Crack down on Medicare Advantage overpayments. A Center for American Progress estimate found that Medicare is at risk of overpaying [Medicare Advantage] plans between $1.3 trillion and $2 trillion over the next decade. Elon Musk, where are you? Oh yeah, you're ending cancer research and stopping life-saving aid overseas. Great.

The problem with Medicare Advantage is the same problem with private healthcare insurance - the insurance middleman is eating up a bunch of dollars that should be going to our healthcare.

3) Get serious about corporate tax avoidance. Multinational firms use shady and dishonest strategies to make profits actually earned in the United States disappear and reappear in low-tax nations like Ireland. International cooperation, amending tax laws, and public shaming would help reduce the annual loss of tens of billions.

If we actually taxed people on all of their income, then we wouldn't need to bother with corporate taxes at all. Everything a corporation earns is eventually passed on to people, so just tax the people. This would take some major loophole closing, but the benefit is that corporations would be completely unburdened by taxes and the corresponding paperwork.

4) Let Donald Trump’s 2017 tax cut lapse. It wasn’t a response to any economic needs, and there’s not a shred of evidence that it did the economy any good. All it did was transfer a lot of money to corporations and the wealthy.

These provisions wouldn't be enough to balance the budget, but they would certainly slow the expansion of the debt to GDP ratio, and perhaps be enough to reverse it.

After all this, balancing the budget would only require the highest tax bracket to be raised by a few percentage points.

I started a thread not too long ago about debt and deficits, and why federal deficits (at least in the U.S.) are 100% necessary. A balanced budget is a structural impossibility. We don't run federal deficits because the government spends too much (they don't) or they collect too little in taxes (they probably do, at least from the rich), we run deficits because people save some of their income. You can't consume all of your production if you don't spend all of your income unless there is some other source of demand - either increased private sector debt (unsustainable) or federal deficit spending (sustainable).
 
I've always thought workers would benefit more from receiving the cost of health benefits paid by the employer in their paychecks, leaving them to buy the health insurance they find adequate. What would that be, about $6.00 an hour pay increase?

It's human nature to take the money, especially if you are young and healthy at the time. That leaves people underinsured or uninsured. They get sick, they lose everything (or too much to recover from), and you have lost a worker.

Unfortunately, we live in the only developed nation where this little experiment could possibly play out, because every other country has come to the conclusion that having a healthy population is well worth the cost of universal healthcare.
 
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What would you say the middle class income is, low to high?
Do you really mean income? Or the tax? I find the current level of income tax reasonable.

If you really mean middle-class income, compared to most of the rest of the world or to other historical times, it's amazing. The middle class has never had it better. Think of 40 years ago, in the mid-1980s. A much larger percentage of the population had no health insurance. Gay people were largely in the closet. TVs were expensive, blurry, and weighed a ton compared to the huge, razor-sharp devices they are now. Our entertainment choices have exploded. We all walk around with powerful computers/cameras (with astonishing capabilities)/phones in our pockets and can assess any public information with a few taps, including detailed directions to anywhere. Our cars are more comfortable and much, much safer. Our houses are larger and more comfortable. The availability of fresh produce all year round is far greater, and our food choices are expanded. Coffee is better, bread is better, cheese is better. Beer is better!
 
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Cut the military budget in half, means test social security, eliminate Medicaid.

Budget balanced.
 
Then after you blow that money, you'll go after the low income class, the way your beloved Nordic shithole countries do with their 25% vat.
They're quite happy with their VAT, and all the services it buys.
Blue states soak the rich, and guess what, the rich leave - in droves. You'll find out when the 2030 census comes around and house seats and EC votes get transferred from blue states to red states.
That's what was said before the 2020 census. And before the 2010 census. And so on. Blue states generate wealth better because of our better schools, healthier populations, and stronger infrastructure.
Right, instead of people using their money to benefit themselves, they should give it to the filthy government to squander.
Most of it is "squandered" on defense, SS, Medicare, Medicaid, and interest on the massive debt cause by Republican tax cuts. The rest is "squandered" on essential services such as air traffic control, securing our nuclear arsenal, researching cures for cancer, collecting taxes, helping citizens ravaged by natural disasters, rescuing people in our waterways, enforcing the border (you guys love that one!), protecting the country from terrorists (they're eating the dogs!) and criminals and so on.
Why don't you just go full commie and take it all, since mommy government knows how to spend it best.
It feels like you're advertising your unsuitability to discuss issues maturely. Proud of it, are you?
 
Cut the military budget in half, means test social security, eliminate Medicaid.
Budget balanced.
Raise the upper income bracket to 50%. Budget balanced.
 
Raise the upper income bracket to 50%. Budget balanced.

Depends on where the marginal rate takes over. You're reaching an income where don't find many people. In any case, spending has grown much faster than inlays(which are already quite substantial) indicating the former is the problem.
 
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