Here's hoping we can discuss the Obama budget

Good idea i principle but it won't work for the simple reason that the money, as with other taxes, will not be used in the manner it's supposed to be. And that's got nothing to do with which party is in control.

Waste and graft are bipartisan.

 

This sums up why I support the FairTax. I believe unless this or something similar is implemented, this country is doomed. We have built up a government that cannot sustain itself on the backs of the public in its current structure and eventually it will fail.

 

The mega-facts are as follows. Without some form of national sales tax ADDED to the income tax, and/or dramatic controls on health care costs, and/or dramatic reductions in spending on the armed forces, the budget deficit is only going to get worse even if we eliminate entire Cabinet departments and stop enforcing most laws by ending administrative agencies like the SEC, FAA, and other bodies that do kind of important work. Sure, you can trust that pharmaceutical company it's drug is safe. They tested it.
So I challenge anyone on this board to run for any U.S. office on a platform of tax increases and cuts in Medicare and other health programs, along with defense cuts. I double dog dare ya!
Truth is, the voters don't care about the deficit, except as a means of expressing resentment that OTHER people get government benefits -- which only they deserve. Until Americans get a clue about public finance, our budget will not balance.

 

Whereas, I thought, when I opened the thread, how many seconds until I hit the response from somebody intellectually dishonest enough to ignore Bush's absolutely ridiculous record of deficit creation? Answer was two seconds. I was scrolling fast.

Meanwhile, for those of us who are really interested in how to fix this stuff instead of the kindergarten crap that has driven many people away from this site, absolutely there needs to be reform of social security, defense spending, medicaid, to really address the deficit. This isn't something the president can just do on his own -- for one thing, whatever he proposes, the republicans will work feverishly against, because there's an election in 2012 and we all know if Obama is seen as leading the way on reforms, that's a great thing for him politically.
A real answer will require the kind of honest, bipartisan, non-gotcha-moment reasoning that our political structure just doesn't seem capable of undertaking anymore.
Anybody who doubts that should just watch this thread over the next hours and days.

 

Okay, simple deal with FairTax/national sales tax/whatever. Poor people spend a much higher percentage of their money on stuff than rich people. This tax essentially taxes poor people at the highest percentage rate of any class, which is just cruel. Fairtax is a national tax hike on the poor and lower middle class and a cut for the rich.

Supporters will try to deny this, but I think we can prove it with a simple line of logic:

1) Some people will be paying more and some people less. There will be a change or else it'd be pointless to do it.
2) The Fair Tax idea almost universally draws its support from economic conservatives, and is especially popular with the rich.
3) Those people are pretty good with numbers, and they aren't going to support an idea that raise their own taxes when their avowed preference is lower taxes.

 

They're all to blame for the budget deficit. Democrats and Republicans both. Clinton managed to balance it, but toward the end, neither he or the GOP Congress was taking steps to keep the country from suffering from the popping of the tech bubble. Then, Bush and the GOP passed tax cuts to, they thought, spur the economy, but the 9-11 attacks complicated things by dragging down any possible benefits so they weren't seen for years. And even when some benefits were seen, billions were being dumped into wars in Iraq and Afghanistan (I won't argue whether these were necessary wars or not; just pointing out they were a drain on the budget at a really bad time).

Then the housing bubble burst and all the other crap went down, and while the size of the bailout has been criticised, the bottom line is the government was forced to step in to some degree. Without it, things probably would have been much worse. Even Bush was ready to step in before he left office, and no matter who got elected, a stimulus bill was going to be passed. If McCain had won, he'd be the one getting the blame for it. Obama won, so he gets the negatives.

And that's not to mention the economic effects of rising oil prices and failing to develop alternate energy sources when we should have, and the rising costs of Medicaid and Social Security.

Basically, the last decade has been a perfect storm of crap for the budget makers. It's been impossible to balance things, and they take so much off the table because of politics, it will be virtually impossible to make major strides toward it for several years yet. You can't raise taxes because it would hurt the economy (I think it wouldn't be too bad if things were targeted right, but that's another argument). You can't touch Social Security or Medicare because you'll get killed in the election cycle. Same with defense. Never mind you can't balance the budget without touching those sacred cows.

And no one wants to do it. They play lip service, but it won't matter who is in power. Both sides have been too scared to lose power that they won't make the changes to Social Security and Medicare necessary to help control costs. Maybe they'll close some tax loopholes to raise some revenue, but I'll believe it when I see it. Other tax reforms would be so hard to get through, I can't see it happening.

 

It is NOT a fact, just a theory that increased taxes will increase revenue. I say it will decrease revenue in the long run, because there is less incentive to earn, which leads to less incentive to spend, so you're just hurting yourself there.

And yes, there has to be reform at every level. And not just Medicaid, but Department of Education, Defense, Housing and Urban Development, etc. And that's unpopular.

So, take the power out of the government's hands. That's what taxes are: Power. Incentives are given to friends, cuts given to this group, etc. But you eliminate the income tax, there is no power left. Which means they can now do what the government was intended to do, and govern. Find ways to make things work better and more efficient.

 

The idea that increasing taxes does not increase revenue is simply a defiance of arithmetic on behalf of ideology. It's not a rational statement. You want to argue that spending cuts are a better way to balance the budget, fine. But fantasy mathematics are not an argument.

 

It will take a new slate of politicians, that only the populace can elect, to steer the country in a new direction and truly encompass fiscal responsibility. Maybe it's a pipe dream but the voter has the power to make it happen. I'm not a political activist by any measure but I make sure I phone my elected reps and tell them what I think they are doing, both right and wrong. Everyone should take the time to do the same.

I would want to know why the US hasn't been trying to repatriate manufacturing operations back to depressed areas of the rust belt. Give a company like Black and Decker some tax breaks to reestablish operations where developed infrastructure exists, housing prices are at rock bottom(with financing costs at decades low levels) and a ready and willing work force is in place. Entice companies to make products with the old "Made in the USA" stickers. Why isn't the idea of a pilot project like this being floated? The economic renewal of the heartland is a necessary step on the long road back and seems to be a no brainer. It seems everyone has just given up hope and somehow expects a rabbit will be pulled out of some hat along the way that will make everything okay.

Maximizing resources, improving revenue and cutting expenditures, implemented by competent management will always be a successful strategy for a potential turnaround situation and that's where the United States sits.

 

That would never have happened, though, because the Bushies just didn't put the wars on the budget so they would never have that kind of deficit. I suppose Obama could have just left the single biggest expense off his budget and then his deficit wouldn't have looked so bad ... everybody's happy!

 

Unfortunately, it's an ideology the Republicans are inexorably wedded to ... even more now that they are firmly in the grasp of the Tea Party.

I have to admit, it's kind of funny to see lectures on cutting spending and reducing the deficit from the party that did nothing on either account when they controlled the entire government for six years.

 

No, it's not.

If you increase the percentage on something, but the base that that percentage is based on is lower, you get less money.

The following is just a quick example:
If I make $100 a week and that's taxed at a 10% rate per week, I bring home $90. Of that, let's say 50% goes to bills, so now I have $45 to spend as I please, which I spend the entire wad on something.

Now, same thing, but there's a 5% VAT. If I continue to spend that same $45, yes, there would be an increased $2.25 in revenue, for a total tax revenue of $12.25.

But my employer now has to make cuts because of that same tax so the profit margin remains the same for the stock holders. So, I'm cut back to 32 hours.

Now I make $80 a week. That means I pay $8 in taxes and bring home $72. Bills are still the same amount (though, they would probably increase as well due to additional taxes), so now I have $22. Spend all that, and you make $1.10 in taxes.

So now the government has brought in just $9.90 because I don't have as much money as before. That's $.10 less than taxes in the original structure.

This is of course assuming that I would lose hours, but seriously, look around. Teachers are being furloughed, newspapers are cutting staff (along with other industries). Do you think that isn't a real possibility if you add a VAT?

Come on, it's not just an ideology here. It's how the world works. You can't keep raising and raising and adding and adding taxes and expect there to be more and more money generated. It doesn't work.