Tax Cuts Are A Bigger Problem Than Spending

[apdst]

Irrelevant. Not an excuse for not having world class health care with access by all.

Fine, kick out all the illegals, secure the borders, cutoff most of the foreign aid and tell the NATO members they're going to have to start pulling their own weight.

You want to have your cake and eat it, too, but this is the real world.

 

[sear]

a #251

You've already made the point, but just to clarify it.

The U.S. spends more than the NATO guideline requires. And we have Obamacare.

They spend less than the NATO guideline requires. And they have healthcare that's broadly popular there.

 

[TurtleDude]

So you get caught spewing evidence free bull****, and so move the goal posts. But at least I think you're finally being honest. When I suggested earlier that you'd have been a fan of the old eugenics programs, including "forced sterilizations" you said, "....there is no need for any affirmative government actions."

Now we know that wasn't true. Whatever it takes to keep undesirables from breeding is what you favor. Glad you're showing your true colors here.

spend some time as a cop or a prosecutor and after you deal with waves of people who are the product of irresponsible parents, most times single parent households of welfare recipients, get back to me

 

[JasperL]

It is not so simple at all. If t'were so, static analysis wouldn't so consistently overestimate revenues from rate hikes, and underestimate losses from rate reductions.

Firstly, we don't have a flat tax ("Taxable Income * Tax Rate"). In fact we have the most progressive tax structure in the modern world. So the incentive to avoid taxation increases with every higher tax bracket, and people respond accordingly. Because our tax code is also incredibly complex - at more than 75,000 pages,
....
All in all, the complexity we've built into the code costs us more than $400 Billion. That's an amazing sum of money.

First of all, just a note on the number of pages stuff. The IRC and regs are NOT 75,000 pages long. That's a right wing myth. The Internal Revenue Code (the law) is about 5,000 pages long and the regs about 13,000 pages. One of the federal tax reporters (which are explanations of the code, regs and cases) runs about 75,000 pages. The relevant point is the regs and the explanations (even court cases) are often issued to clarify a point of law and make compliance easier, not harder. Using a page count of something like the regs or explanations is like complaining that a big book on how to use Lightroom photo editing software by Adobe (I have one on the shelf) makes using Lightroom HARDER or more complex.

Second, yes, complying with taxes is difficult, but the vast majority of that difficulty cannot be 'reformed' away. I've done 1,000s of tax returns and the hard ones are mainly (95% or more) difficult because business is difficult and complex. Your link shows that about 1/3 of the cost of complying with the tax code is to prepare a relatively small number of C corp returns, and I'm positive the vast majority of that cost is concentrated in the Fortune 1,000 or so. Pick any one of them and they likely have at least dozens if not (for the behemoths) hundreds of partnerships, LLCs, and corporate subsidiaries. They most likely have permanent offices for their Big Four tax and audit team who work on that one client for sometimes years, full time, year round. I can promise you they're not primarily doing tax research - it's just dealing with the complexities of a modern corporation with dozens of entities operating globally in perhaps dozens of countries, 50 states, gobbling up other companies nearly every year.

Furthermore, people have the ability to anticipate taxes, meaning they have the ability to alter their behavior before tax season. People will change when they receive their income, how they receive their income, where they receive their income, even the point at which they cease to pursue additional income. And, again, the people with the highest degree of flexibility in doing so are the same people with the greatest incentive to do so under our progressive tax structure.

Sure, but no tax system eliminates this. Our system of taxing foreign earnings for U.S. companies is broken because offshore income is not taxed until the earnings are repatriated back to the U.S. so companies have $trillions parked offshore waiting on Congress to pass the next 'repatriation holiday' which is almost surely going to happen this year. It's for this reason I do support lowering top rates on C Corporations to get them in line with current international norms.

For example, it's just a WAG on my part but the average state corporate come tax rate is something like 7% or so, in any event well under 10%, and modern corporations spend enormous resources to get that to as close to 0% as possible. So this idea that if we reduce rates to 25% or so from 35% that it will somehow reduce incentives to engage in sophisticated tax planning efforts is just false, misguided.

The math is hardly simple, and the process - rather than being direct - contains multiple complications, complexities (those are two different things), and feedback loops. There is good reason why the experts fail so regularly in their predictions.

Again, you overstate the problems of the 'experts' in their predictions....

 

[JasperL]

Sure. It is simply not anything close to the being the primary driver of receipts, and it's indirect effects tend to be inverse to it's direct effects.

Of course rates are the primary drivers of receipts. Over any reasonable time horizon (e.g. 10 years) taxable income is largely independent of tax rates - it's not 'fixed' but perhaps 80-90% fixed, assuming definitions of the base don't change. So, yeah, you change the top marginal rate by 5% and receipts change by something like 80-90% of that rate change.

You're assuming that tax rates are the primary driver of economic activity or taxable income and there is just ZERO evidence for that assumption.

An example, perhaps: You decide that you want to be stronger, so you go to the gym, and work out. Well, in the short term, this is a disastrous strategy. When you leave the gym, you will, in fact, be tired, and your muscles will be torn - you will be weaker when you leave the gym than you were when you walked in.

There are two different questions you're addressing. 1) Do lower tax burdens maximize economic activity? and 2) Can we grow government by cutting tax rates (and keeping the definition of the base constant)? The answer to 1) is yes, as long as we cut spending so the shortfall from the drop in receipts from tax rate cuts isn't borrowed and 2) NO!

You're either conflating those two different issues, or pretending that the boost in economic activity DOES more than offset the first order effect of a lowering of tax rates. This is an empirical question and the data say - NO! - tax rate cuts will reduce revenues. There is no free lunch, no tax Santa Clause.

Possibly. It depends where you are starting from. Moving from a top nominal rate of 39.5% to a top nominal rate of 35% will have diminished returns. Moving from a top nominal rate of 90% to a top nominal rate of 50% could have fantastic returns.

Fine - in this reality in 2017, we're not at 90% so that scenario is nice to discuss theoretically, but moot as it relates to current policy discussions.

That's on regular income, mind you. Labor is less elastic than things like investment, as you note indirectly when you point out the higher return on cutting those rates.

Yes, and again in 2017, we subject capital gains to a lower tax rate already.... BTW, by some estimates about HALF that complexity in the IRC and Regs is because of our preferential taxation of capital gains, so if you want to eliminate complexity, subjecting all income to a uniform rate is the single biggest step we can take, by far, by orders of magnitude over all other options.

And the 'higher return' from capital gains tax rate cuts STILL means tax rate cuts LOWER REVENUES.

Kind of funny that (almost) all the "flat tax" proposals out there exempt capital gains and dividends from tax entirely, and often exempt interest income. Gosh, what happens if individuals can recharacterize ordinary income at 25% even, to a 0.00% taxable category? Tax simplification? LMMFAO......

Over the course of a year? :shrug: again, I would say it would depend on where you are starting from, and where you are moving, and how you are doing it. Temporary tax cuts, for example, do not have much effect because they do not alter long-term incentives, and so they are less likely to significantly alter behavior.

No, it's not over a year but over any reasonable period that is relevant to decision making - a decade or so.

 

[sear]

Originally Posted by Celebrity View Post
"as long as you can own one or fewer guns, your right to bear a firearm is not being infringed upon." #253

a) 2A uses the plural: "arms". Not "arm".

b) Even deaf-mutes have 1st Amendment rights.
The inability to exercise a right is not an automatic forfeit of that right.

c) A single mom that only had a muzzle-loader when she was 24 has not forfeited her right to get a .357 6-shooter when she's 27.

"One bullet in the hands of a mentally unstable person or a convicted felon is one too many. Six bullets in the hands of a mother protecting her twin nine year olds may not be enough." U.S. Sen. Lindsey Graham (R-SC) [source: NBC-TV News 13/01/30]

 

[jaeger19]

the welfare system encourages irresponsible breeding. cut off the money and the breeding will decrease.

so your theory is that people won't have sex if there is no welfare?

Several thousand years of human history proves that theory wrong.

 

[jaeger19]

if you are living on the dole and already have kids you cannot support-and thus have forced the taxpayers to fund the existence of your children, I have absolutely no problem subjecting such a person to involuntary sterilization. You don't have any right to constantly impose more and more costs on society

Except the vast majority of folks that are on welfare will only be on welfare temporarily and will be net positive taxpayers.

Are you for euthanizing the elderly? Disabled?

A new CBPP analysis of budget and Census data, however, shows that more than 90 percent of the benefit dollars that entitlement and other mandatory programs[1] spend go to assist people who are elderly, seriously disabled, or members of working households — not to able-bodied, working-age Americans who choose not to work. (See Figure 1.) This figure has changed little in the past few years.

 

[jaeger19]

spend some time as a cop or a prosecutor and after you deal with waves of people who are the product of irresponsible parents, most times single parent households of welfare recipients, get back to me

What percentage of people do you contend are criminals?

Do you realize that your experience is only a minute number of americans and is not valid to the American population.

 

[TurtleDude]

so your theory is that people won't have sex if there is no welfare?

Several thousand years of human history proves that theory wrong.

if they get sterilized for having more kids that they cannot pay for they can screw like minks till the second coming and it won't matter

 

[TurtleDude]

What percentage of people do you contend are criminals?

Do you realize that your experience is only a minute number of americans and is not valid to the American population.

I know that coming from a single parent home is the single strongest predictor of someone ending up a mope

 

[FastPace]

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.

I'm fiscally liberal. To an extent far more than 99% of American Democrats.

But there is a variable you are leaving out about some of those countries like Germany and Sweden. They are not financing a military and an empire and bent on war like Democrats are. Democrats and Republicans. Those countries basically focus more on taking care of their own people and cleaning up their own backyard. But I suspect you are bent crazy-eyed on spending billion over over many years trillions on waging wars (our missiles cost $$$$ and our private companies selling those weapons to governments or the US government financed by tax payer dollars reaping in mega $$$ profits.) in Syria, Iran, even against Russia. Actually, across all of planet earth minus your former colonial powers and buddies in Western Europe. Surprise, surprise, you all don't want to invade each other.

The good cop/bad cop game played by the leaders and fanatical religious adherents of the Democrats and Republicans is getting tiring.

I just read some 16 year-old white girl in Chicago just hacked some male Uber driver to death with a machete and smaller knife she stole from Walmart. The socialpathologies, the rates and normalcy of it in the United States culture(s), relative to other "advanced" economy societies is just through the roof. But like hypocrites pointing fingers with 3 fingers of their own pointing back at them Americans have the audacity in some PC, secular, holier than thou, self righteous tone to pontificate how it can and will solve every other nations problems from Russia to Libya to Syria and to Iran. Americans can't even fix their own problems. And is without doubt the most war monger nation on earth. Possibly, the most war mongering in all of human history. And everything the US touches turns worse.

I'd be happy to advance a simply temporary policy of this: until the US provides free, or near free, universal health care to all its *citizens* then it can't wage war on another country . With the exception being the country of ISIS or a genocide being waged as was the case in Rwanda, which the US did not a thing to stop.

 

[jaeger19]

I know that coming from a single parent home is the single strongest predictor of someone ending up a mope

Except that "mopes" make up a tiny portion of the community.

the vast vast vast majority of people that come from single parent homes are law abiding and productive people.

 

[jaeger19]

if they get sterilized for having more kids that they cannot pay for they can screw like minks till the second coming and it won't matter

My grandparents had to go on welfare for a period. They ended up paying way more in taxes than they ever took in welfare (which is statistically the vast majority of people who get welfare) .. my parents never took a dime in welfare and put way more in taxes.. and I never took a dime of welfare and have put in MORE taxes in one year than most people put in their lifetime of taxes.

Why would you have sterilized my grandparents? Why does that make sense to you?

 

[TurtleDude]

Except that "mopes" make up a tiny portion of the community.

the vast vast vast majority of people that come from single parent homes are law abiding and productive people.

the vast vast majority? I find that to be a bit specious.

 

[KLATTU]

According to a 2010 study by the U.S. Census Bureau, the percentage of married couple families living in poverty was 6.2%. For single-parent households in that same year, the poverty rate was 27.3%; for single mother households, the poverty rate was 29.9%.

Research also shows that children born or raised in single-parent families are at higher risk for a variety of social ills, including welfare dependency, academic difficulties and criminal activity.

https://mic.com/articles/11316/27-3-of-single-parent-households-live-in-poverty#.37Y6PplS9

 

[jaeger19]

According to a 2010 study by the U.S. Census Bureau, the percentage of married couple families living in poverty was 6.2%. For single-parent households in that same year, the poverty rate was 27.3%; for single mother households, the poverty rate was 29.9%.

Research also shows that children born or raised in single-parent families are at higher risk for a variety of social ills, including welfare dependency, academic difficulties and criminal activity.

https://mic.com/articles/11316/27-3-of-single-parent-households-live-in-poverty#.37Y6PplS9

So lets sterilize single mothers because 30% of them will be in poverty? Or because their children will have a higher risk?

Heck.. poor folks are at a higher risk for a variety of social ills.. should we just sterilize all poor people?

 

[TurtleDude]

So lets sterilize single mothers because 30% of them will be in poverty? Or because their children will have a higher risk?

Heck.. poor folks are at a higher risk for a variety of social ills.. should we just sterilize all poor people?

that's a stupid interpretation. if someone has been on welfare and has had children, and are still on welfare, do you think they have an unlimited right to continue to pop out children?

 

[jaeger19]

the vast vast majority? I find that to be a bit specious.

Really.. then please detail what percentage of the population are criminals.. start with that.

 

[jaeger19]

that's a stupid interpretation. if someone has been on welfare and has had children, and are still on welfare, do you think they have an unlimited right to continue to pop out children?

I am countering your idea that if a person goes on welfare.. that they should be sterilized so they can't have children on welfare.. when say over their lifetime.. they will not be on welfare and will pay more in taxes than they got in welfare for that period.

Interesting libertarian take to sterilize someone for what for the vast majority is a temporary need.

As far as having children? Yes.. you have the right to have children. And sterilizing a person removes that ability. now and for the future when you may not even be on welfare. Secondly.. the period that people have children are a small percentage of the time in which a person pays taxes.

 

[JasperL]

that's a stupid interpretation. if someone has been on welfare and has had children, and are still on welfare, do you think they have an unlimited right to continue to pop out children?

On what basis would you deny them that "right"?

What you're suggesting is the price of being poor and a woman in America is to be sterilized. Even Buck v. Bell (and it's incredible that case still stands) only allows sterilization of "inmates of institutions supported by the State who shall be found to be afflicted with an hereditary form of insanity or imbecility."

It's really incredible what you're arguing on this thread. Nazi Germany called and wants its eugenics program back.

 

[TurtleDude]

I am countering your idea that if a person goes on welfare.. that they should be sterilized so they can't have children on welfare.. when say over their lifetime.. they will not be on welfare and will pay more in taxes than they got in welfare for that period.

Interesting libertarian take to sterilize someone for what for the vast majority is a temporary need.

As far as having children? Yes.. you have the right to have children. And sterilizing a person removes that ability. now and for the future when you may not even be on welfare. Secondly.. the period that people have children are a small percentage of the time in which a person pays taxes.

people should be free to do what they want. when they engage in repetitive behavior that forces others to pay for what they do, then I say we who fund them should have a bit more say over their actions.

 

[sookster]

I think that if we were to tax more, we could know with certainty that we could print more. But not printing more on what we have been printing on, which is war from what I can see. Print more on ourselves. Like a health care system, new roads and bridges, green energy, I mean the works. The Treasury uses taxes so they don't have to print as many treasuries that particular day. So we deficit spend like usual, but we print less treasury bonds. That in turn eventually means The Treasury has less to pay out at the beginning of the day in expired treasuries, which means the rest is deficit spent, meaning there is more to deficit spend than before.

I have to agree with an assessment that was made earlier. The rich and the powerful do not want American citizens to be spent upon. They want citizens to work. Give them less, make sure they have to work harder. When there are countries giving out a minimum income, this would never happen in the states because as a Rockefeller was caught saying, "I want a nation of workers, not thinkers."

 

[sear]

"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt." John Adams

I have preferences for the ratio of tax to spendable balance.

But my personal preference is secondary to the more fundamental reality that
regardless of whatever else about it,
government revenues should be proportional to government expenditures.

"... everyone's for big government. The American People say we hate big government, but we like our social security and medicare. That's 38% of government right there. The biggest components of government are the most popular components of government."

"What's pernicious about deficits for conservatives is this. It makes big government cheap. What we're doing, we're turning to the country, the "conservative" administration turns to the country and says: We're going to give you a dollar's worth of government, we're going to charge you seventy five cents for it. And we're going to let your kids pay the other quarter." George Will Nov 30, 2003

 

[KLATTU]

So lets sterilize single mothers because 30% of them will be in poverty? Or because their children will have a higher risk?

Heck.. poor folks are at a higher risk for a variety of social ills.. should we just sterilize all poor people?

What does that have to do with your dubious claim that the vast vast majority of people in single parent households are law abiding and productive. Based on that data I posted , you could sy the majority are . Maybe even the vast majority. But I'm not buying the double vast.( again based on the data)

The sterilization strawman nonsense aside, we we can argue about the remedy, but it does nobody any good to deny the problem.