Raising taxes

[Darth_Yuthura]

I don't know whether this is going to become a serious debate or not, but I just want to hear what other people (Americans more specifically) think about the prospect of raising taxes. Only two things in life are certain, death and taxes.

 

In a time when the US deficit is approaching a trillion dollars annually, would people support higher taxes if that's what it takes to overcome with the healthcare, education, and infrastructure problems? And even taxing the most wealthy might not be enough, so even the middle class might have to contribute even more than before.

 

Personally, I believe it is important to deal with the deficit as quickly as possible. That requires reducing the debt owed by the US, currently over $10 trillion. The interest we pay on that debt is nothing more than waste, which is why we must seek to take care of it. Higher taxes would generate the resources the US needs to increase the production of goods that can be exported, generate new jobs, and pay off the debt.

 

It will hurt taxpayers, I know that already; but what is happening today is really the result of past decisions leading to delayed consequences. If we don't solve our economic problems today, they will hover over us forever. But that doesn't exactly mean raising taxes will make the difference.

 

What are your thoughts?

[Trench]

I hate taxes. Let the government bother someone else. Its their fault that we are in this mess, and they should fix it without putting hard working Americans out on the streets.

I'd better not say any more...

[Darth_Yuthura]

Let the government bother someone else. Its their fault that we are in this mess' date=' and they should fix it without putting hard working Americans out on the streets.[/quote']

 

Maybe, but despite who was responsible for it all; we're all in the same boat together. If someone else does something stupid or irresponsible, it does not help us to just brush the problem aside. They may get what they deserve, but everyone else who had nothing to do with it will suffer as well.

[Trench]

Would you mind if I say something slightly rude? (towards the government:xp:)

 

We could send them to China to work off their debts in factories.

:pYou have to admit that it would be effective with all the politicians we've got, and its character building.

 

All kidding aside, I know that we are all in the same boat together, but these taxes are going to force even more people onto the streets, and that won't do anything good for this country.

[jrrtoken]

All kidding aside' date=' I know that we are all in the same boat together, but these taxes are going to force even more people onto the streets, and that won't do anything good for this country.[/quote']Or you could simply alleviate certain taxes for lower and middle-income households, while raise taxes on the astronomically wealthy.

 

damn, I forgot; that's socialism.

[mur'phon]

Or you could simply alleviate certain taxes for lower and middle-income households, while raise taxes on the astronomically wealthy.

 

Which is rather hard to do in America as it's one of the countries where the wealthy pay most taxes (as a percent of total taxes paid). Incidentaly I agree with DY that the middle-income households will have to join in. I do not however believe it's right to do it in a downturn, so wait for the economy to pick up first. Unfourtantely since voters tend to hate when the government cut services, and hate it just as much when they raise taxes, I don't see the defecit disapearing any time soon.

[Darth_Yuthura]

Which is rather hard to do in America as it's one of the countries where the wealthy pay most taxes (as a percent of total taxes paid).

 

Well the social class structure is starting to revert back to the way it was when there were lots of rich and poor with few middle class. The number of wealthy people isn't climbing so much as the sheer scale of wealth the top 1% of income earners have. Since the Reagan years, the upper 1% are increasing their annual earnings faster than everyone below them.

 

What does that mean? Every social class tends to earn more than they did the year before, but the lower classes are increasing much slower than the more wealthy ones.

[Master Shake]

damn, I forgot; that's socialism.

Aw, and it was just starting to sound good.

[Litofsky]

Living in the state that I do, the government takes 30% of my family's annual income. That being said, I can't see any other way of getting out of this recession/massive debt any other way. We've been spending billions on two wars for nearly seven years now, and the recent government bailouts (not trying to hit the bailout, just pointing out that they've cost in the trillions) haven't exactly brought in a plethora of revenue.

 

No one would be happy, but I just don't see a plausible resolution to our debt without raising taxes.

[Web Rider]

People want government services, so people pay taxes. While I agree that government spending is often wasteful, wasteful spending is not solved through increases of reductions in taxes.

 

As long as people want government services, they should pay taxes, though I do think a lot of non-necessary taxes should be optional, and of course, if you don't pay in, you don't get them.

[Q]

Or you could simply alleviate certain taxes for lower and middle-income households, while raise taxes on the astronomically wealthy.

 

damn, I forgot; that's socialism.

Isn't that pretty much what we already do?

[mimartin]

Spend and borrow, then let the next generation pay for it.

 

It has worked for 17 of the past 29 years.

[Darth_Yuthura]

It has worked for 17 of the past 29 years.

 

Why 17?

 

Well there are other options to higher taxes, but one of the consequences is higher population density. Of course that hasn't been very successful around here, but when people are more concentrated, it costs less to provide more bang for the buck in terms of public services.

 

Then there comes the point of public/private spending causing vast amounts of waste. A solution to reduce that is to designate where private services have proven effective and public ones are just a waste of money. This would inspire for more effective competition among corporations to improve on the private side while the public services which don't work would be scrapped.

[mimartin]

Your right it, I should have said 19 years.

 

8 years under Ronald “so-called small government” Reagan

 

8 years under George W Bush

 

3 years under George H Bush before his lips lied and he raised taxes. Still took 4 years before the surplus took effect.

 

8 years under Clinton are the only time the tread was reversed where we had a surplus until 1 year after George W Bush took office.

 

7 months of Obama look like par for the course. I don’t know why people call him a socialist, seems to take after the Republicans to me.

 

 

[ForeverNight]

I would be curious to have the above graph plotted with who was in control of the Congress and/or Senate... otherwise interesting graph Mimartin.

[Darth_Yuthura]

The graph shows the deficit, not the debt mind you. I originally assumed when I saw it years ago that Clinton eliminated all US debt and that Bush ruined it all. Still it is better to be getting a surplus than a deficit.

 

Also note that Clinton actually had rein of the US in a time where the worldwide economy was booming. Although he may have been a great president, don't make the mistake of assuming he flipped the economy completely around by his action... although he helped, the US economy was booming at the time anyway.

 

W can take credit for his part in reversing the flow of funds back into the red, but he didn't take the US debt from 360 million in the green to -10 trillion in his 8 years in office.

[Bimmerman]

While it's very PC to tax the rich, they already pay proportionally more per person in taxes than middle and lower classes do. Simply taxing a select small group of people will never achieve the desired result, the tax increases must be spread out more than the current "people making more than 250k per year."

 

250k also, while it seems like a lot, isn't much. Before I get flamed for saying that, here's why: 250k is the household tax increase level. Say you have a couple who have advanced degrees and ten years of experience in their field. For an engineer with only a Bachelor's straight out of school, the average pre-tax income is ~$55k. For a Master's, ~$65k. For a PhD, ~$85k. Add a few years of experience, and your Master's degree nets you ~$100k. PhD, $125-150k. Of course, this varies area to area, but the point stands. Fields like law, medicine, engineering, are well known for high salaries. Fields like construction management, business management (MBAs), Biotech, Chemistry, Physics, all make very good money, +/- 10k or so around the Engineer's.

 

Now, back to the couple. Two people with similar degrees in engineering with similar experience will net them six figures each at some point in their lives, probably before age 35. If both partners make 125k, that's the needed 250k for tax increases. Hence, that threshold is rather low for a hardworking educated salaried family. And yes, I've simplified my model significantly, there are lots of holes for D_Y to aim for, and I could care less. It works and it makes a lot of sense if you look at expected salary data with years of experience factored in.

 

What I'm not saying, and I know this will be overlooked, is that 250k isn't enough to live on; hell I'd love to earn that much. For a household, 250k is a very luxurious life. What I AM saying is that it isn't as high a threshold as you may believe it to be.

 

The idea among the more left leaning folks is that those who earn more money somehow work less hard and don't deserve it. I strongly disagree; in order to get to that level of income, you have to work your ass off. Why should someone who has worked hard their whole life to get where they are pay for someone's welfare or illegal immigrant baby? Or an unrelated 65 year old's healthcare? Or GM? Or.....? Most people who earn lots of money put in the hours required to do so. Paris Hilton's an admittedly vapid anomaly.

 

 

Anyway, enough of me ranting. My solution is instead of spending money we don't have on ideas and bills that haven't really done anything for the economy in a measurable way (banks aren't lending stimulus funds, so the stimulus was worthless) and raising taxes, we leave the taxes where they are and cut spending.

 

We don't need to keep fighting wars with dubious benefits in this economic climate; we can't afford it when the economy is in the dumps. Argue the war's pros and cons all you like, I'm talking about the fiscal reasons. So, cut spending on the war, cut spending on medicare/medicaid, cut welfare benefits, cut handouts, cut everything that isn't essential to true government function.

 

Once the government is running, start adding back in the programs that actually are needed (i.e. medicare/medicaid, veterans benefits.....not social security. that won't happen, but would be nice to see). That would free up a significant amount of money each year that could then be used to pay back the debt, interest, and deficit.

 

As for taxes, the best solution is to implement an actually fair metric. Impose a tax of 35 or 40% of income on everybody. Then the rich pay the same proportional amount as the poor, so everyone is helping the exact same way. No more bogus tax breaks for Priuses, Hummers, or house renovations. Cut out all the exemptions, all the tax shielding, all the BS, and simply levy a flat tax across the board. Leftists will scream bloody murder, conservatives will scream bloody murder, so therefore it's the right thing to do. Simple, effective, and very very functional (btw, 40% is the top tax rate more or less not including capital gains).

 

The graph shows the deficit, not the debt mind you. I originally assumed when I saw it years ago that Clinton eliminated all US debt and that Bush ruined it all. Still it is better to be getting a surplus than a deficit.

 

Also note that Clinton actually had rein of the US in a time where the worldwide economy was booming. Although he may have been a great president, don't make the mistake of assuming he flipped the economy completely around by his action... although he helped, the US economy was booming at the time anyway.

 

W can take credit for his part in reversing the flow of funds back into the red, but he didn't take the US debt from 360 million in the green to -10 trillion in his 8 years in office.

 

Very good point! It would be interesting to see that same graph overlaid not just against who controlled congress but also against the stock market trendline. That would show overall market conditions and how the US fared during boom/bust times. I don't know if that's doable, but would be interesting to see. If anyone's a photoshop wizard....you know what to do.

[Darth_Yuthura]

And yes, I've simplified my model significantly, there are lots of holes for D_Y to aim for, and I could care less. It works and it makes a lot of sense if you look at expected salary data with years of experience factored in.

 

Uh... you really haven't taken macroeconomics have you? I'm not proclaiming to know it myself, but I'm not expecting to make a perfect model, nor do I expect one to come from anyone who has a PHD in multiple economic fields.

 

What I'm going for in general is that Americans have to realize that the lack of government services are a result of insufficient funding. Where else is that supposed to come from?

 

While it's very PC to tax the rich, they already pay proportionally more per person in taxes than middle and lower classes do. Simply taxing a select small group of people will never achieve the desired result, the tax increases must be spread out more than the current "people making more than 250k per year."

 

One of the biggest problems I see with this is the issue of the wealthiest individuals being able to hire accountants and most others can't afford it. There are many loopholes in the tax system that the middle class could exploit, but that's assuming they have a dedicated accountant to do that... most can't. Corporations are able to dodge taxes left and right if they know the proper loopholes to exploit.

 

There is a major division between wage earners and business owners. This is really where the tax-loophole discrepancy is found. Those who own their own business or take part in a corporation have many options to place wealth and resources in order to reduce what they have to have taxed. This should be where the taxes system is most significantly flawed.

 

What I'm not saying, and I know this will be overlooked, is that 250k isn't enough to live on; hell I'd love to earn that much. For a household, 250k is a very luxurious life. What I AM saying is that it isn't as high a threshold as you may believe it to be.

 

The idea among the more left leaning folks is that those who earn more money somehow work less hard and don't deserve it. I strongly disagree; in order to get to that level of income, you have to work your ass off. Why should someone who has worked hard their whole life to get where they are pay for someone's welfare or illegal immigrant baby? Or an unrelated 65 year old's healthcare? Or GM? Or.....? Most people who earn lots of money put in the hours required to do so. Paris Hilton's an admittedly vapid anomaly.

 

It's not unfair. When there is only so much work to go around for everyone, then there should be progressive taxes in place. Someone who earns 250 K can live comfortably on that salary... and it's not like they are being punished if they are told that any more work they do will be taxed higher. They simply would be given less incentive to work for more than 250 K a year.

 

And those who earn the least are given the most tax breaks because they may be struggling to get by. It is to ease the burden of minimum wage earners and to give the wealthiest individuals less incentive to earn more than they need to live comfortably.

[Bimmerman]

Uh... you really haven't taken macroeconomics have you? I'm not proclaiming to know it myself, but I'm not expecting to make a perfect model, nor do I expect one to come from anyone who has a PHD in multiple economic fields.

No, I have not. I do, however, have hard copies of data showing exactly what I have described over decades of experience. So in this case, yes, I am right. I will see if I can get scans of the graphs....may be a while as the books are literally 6000 miles away.

 

What I'm going for in general is that Americans have to realize that the lack of government services are a result of insufficient funding. Where else is that supposed to come from?

 

....maybe we should rely more on ourselves and less on the government to help us inefficiently? Considering how much you love efficiency, why do you believe the government, which is basically the epitome of sloth, ineptitude, and inefficiency (regardless of party), must help the people? You can do it better, faster, and quicker yourself.

 

One of the biggest problems I see with this is the issue of the wealthiest individuals being able to hire accountants and most others can't afford it. There are many loopholes in the tax system that the middle class could exploit, but that's assuming they have a dedicated accountant to do that... most can't. Corporations are able to dodge taxes left and right if they know the proper loopholes to exploit.

 

Well, I'm not wealthy, and I've never hired an accountant. I also don't need to. People just need to go to Barnes and Noble, but JK Laser's latest Tax Code book, and work through the worksheets for a few weeks before tax time. It's not hard, it just is mindnumbingly tedious. Paying an accountants is a tax on being lazy or not having enough time to do it yourself, or both.

 

Similarly, I invest my money in IRAs, mutual funds, and money market accounts entirely on my own without any oversight from an accountant. I do well on that, despite me not having a lot of money. All the knowledge you need is available in the financial section of a bookstore (Bogle on Mutual Funds is GREAT). Again: me = poor college student. I don't use an accountant, but I invest a significant portion of my income and do my own taxes. Why do people in the middle class, with more time on their hands, and money, not do the same? Laziness and/or overbooking of time.

 

Also, for loopholes, I think they should all be closed and everyone be subject to the same tax rate. Fair for all.

 

There is a major division between wage earners and business owners. This is really where the tax-loophole discrepancy is found. Those who own their own business or take part in a corporation have many options to place wealth and resources in order to reduce what they have to have taxed. This should be where the taxes system is most significantly flawed.

 

Again....I'm no business owner, and while I work fulltime, I barely earn enough to live on the time honored ramen and beer (occasionally pasta) diet. I live like this solely to fund my automotive habit and to put the max possible into my IRAs and mutual funds as possible per year. This will pay off tremendously when I'm near retirement age, and I'll undoubtedly get nailed by new income-distribution BS. But, always in motion is the future.

 

Acquiring wealth isn't relegated solely to business owners, nor is knowledge of tax-loopholes. If a poor broke college idiot can do it....anyone can.

 

It's not unfair. When there is only so much work to go around for everyone, then there should be progressive taxes in place. Someone who earns 250 K can live comfortably on that salary... and it's not like they are being punished if they are told that any more work they do will be taxed higher. They simply would be given less incentive to work for more than 250 K a year.

 

No, that strikes me as absurdly unfair. There is only so much work to go around, and the cold hard truth is that the better a worker you are, the better skilled you are, the greater your motivation and drive, and your willingness to get the job done no matter how much time it takes (most people I know or have met who earn six figures or more work 85hrs a week or more), the better you will do in your career. Why should there be disincentives for working hard to better your life?!? I want to own a Ferrari someday. I fully expect to put in 80hr+ weeks to get myself to a point in my career and life where I can afford one. If you're not willing to work that hard to realize your life goals, then that's fine, I'll just end up paying your healthcare, and can justifiably bitch about it. I will also be understandably angry when I hear repeated calls for more of my money to be distributed amongst the not so driven.

 

Case in point: I know a man, a son of a day laboring machinist, who went to school, got a PhD while working full time, and still over 35 years later, still puts in 80-100hr weeks including weekends. He is immensely successful, living comfortably, with a very nice family. What he does not need to spend on living, he invests. Now can you honestly tell me that someone like him, who came from absolutely nothing, should not work so hard to live his life the way he wants to? Are you honestly going to tell me he doesn't deserve the fruits of his considerable labor?

 

If so, well, we're going to agree to disagree. I will not budge on this.

 

 

And those who earn the least are given the most tax breaks because they may be struggling to get by. It is to ease the burden of minimum wage earners and to give the wealthiest individuals less incentive to earn more than they need to live comfortably.

 

So, rather than give them incentives to work hard and move up in life, we give them everything and expect nothing of them. The blatant hypocrisy here is astonishing. If you come from a welfare family, living off of food stamps, make something of yourself, and earn a significant amount of money per year and accumulate wealth over time, the leftists then have the utter gall to tell you that you do not deserve that money, and that you shouldn't work as hard or you will be taxed more. How is that possibly fair?

 

As Jesus said, there will always be poor. There is no point trying to ease their suffering too much, as those with drive and ambition will rise above it (and they do, more often than you know). I suspect that your family has lived a comfortable middle class life for many generations. Mine has not. Understandably, I fully believe that those who make something of themselves should not be penalized for it, and those with little to nothing can better themselves if they have the drive.

[mimartin]

The graph shows the deficit, not the debt mind you. [/Quote] No, the graph shows deficits and surpluses. If you run a budget deficit (spend more than you take in) then your get into debt.

 

 

don't make the mistake of assuming he flipped the economy completely around by his action..[/Quote] I believe it begin to be flipped when George H Bush finally got conservative and raised taxes instead of continuing to practice his predecessors spend and borrow philosophy

 

W can take credit for his part in reversing the flow of funds back into the red, but he didn't take the US debt from 360 million in the green to -10 trillion in his 8 years in office.

No, George W Bush took spending from a little under $200 billion surplus to deficit of $162 billion in 2007 (the last real year of numbers).

 

Also note that Clinton actually had rein of the US in a time where the worldwide economy was booming.

Kind of ruins the entire theory of trickle down economics. Clinton did not cut taxes on the wealthy, but the economy was booming during his term.

[Darth_Yuthura]

Case in point: I know a man, a son of a day laboring machinist, who went to school, got a PhD while working full time, and still over 35 years later, still puts in 80-100hr weeks including weekends. He is immensely successful, living comfortably, with a very nice family. What he does not need to spend on living, he invests. Now can you honestly tell me that someone like him, who came from absolutely nothing, should not work so hard to live his life the way he wants to? Are you honestly going to tell me he doesn't deserve the fruits of his considerable labor?

 

What? Simply because he sought an absurdly great annual salary that he shouldn't have a progressively higher tax rate for everything he earns past $250,000? You speak as though I suggest he work harder and give it all away. He knew that the more hours he worked, the greater the proportion of his wages would go to taxes. What I would suggest instead is that this guy work fewer hours altogether. He gets about 250K and has more time to himself per week.

 

No, that strikes me as absurdly unfair. There is only so much work to go around, and the cold hard truth is that the better a worker you are, the better skilled you are, the greater your motivation and drive, and your willingness to get the job done no matter how much time it takes (most people I know or have met who earn six figures or more work 85hrs a week or more), the better you will do in your career. Why should there be disincentives for working hard to better your life?!? I want to own a Ferrari someday. I fully expect to put in 80hr+ weeks to get myself to a point in my career and life where I can afford one. If you're not willing to work that hard to realize your life goals, then that's fine, I'll just end up paying your healthcare, and can justifiably bitch about it. I will also be understandably angry when I hear repeated calls for more of my money to be distributed amongst the not so driven.

 

And the unemployment rate is how high right now? If instead of one person working 80 hours a week, you had two people working 40 hours each; that would mean FEWER people leeching off the welfare system. More people would find work and you'd find that people don't exactly like being on welfare, nor can they be on it for long. It's better to provide jobs for more people than to have elite few earning way more than they would ever need.

 

So, rather than give them incentives to work hard and move up in life, we give them everything and expect nothing of them. The blatant hypocrisy here is astonishing. If you come from a welfare family, living off of food stamps, make something of yourself, and earn a significant amount of money per year and accumulate wealth over time, the leftists then have the utter gall to tell you that you do not deserve that money, and that you shouldn't work as hard or you will be taxed more. How is that possibly fair?

 

You don't start spiking taxes until a person earns over $250 K a year. That's plenty of opportunity to have a comfortable living, but only when you start earning an outrageously high sum of money that restrictions are placed. People are naturally going to want more money... welfare doesn't exactly promote everyone to stay home and do nothing. And a 250 cap isn't going to demotivate people from working harder to earn more than ~100 grand a year.

 

No, the graph shows deficits and surpluses. If you run a budget deficit (spend more than you take in) then your get into debt.

 

It doesn't show debt... that's significant. What I assumed was that the US got out of debt when I originally saw the graph and then went into the hole again with Bush. Those 'surplus' years represented times when the US reduced its debt. Here's an example using one trillion dollars as a base example:

 

Clinton surplus years:

 

-1,000,000,000,000

+100,000,000 surplus

-999,900,000

 

-999,900,000

+150,000,000 surplus

-999,750,000

 

-999,750,000

+200,000,000 surplus

-999,550,000

 

In the Bush Years...

 

-999,550,000

-125,000,000 deficit

-999,675,000

 

-999,675,000

-370,000,000 deficit

-1,093,000,000

 

See what I mean? Although a surplus is a good thing, it actually has a very small impact upon the total national debt.

[mimartin]

The graph serves the purpose I wanted. Despite what you assumed, the graph does a better job a looking at the difference between income and expenses for any given year. The data is not flawed just because you misread it. Particular when you look at the context that it was in response to your question of me.

[Master Shake]

I want Clinton back.

[Darth_Yuthura]

The data is not flawed just because you misread it. Particular when you look at the context that it was in response to your question of me.

 

I wasn't aiming to say it was flawed, but what I misread four years ago (where debt and deficit were easily misrepresented) was another aspect that I thought people shouldn't mistake on. The graph showed EXACTLY what you wanted.

 

What I wanted was to say that people shouldn't mistake that a 'surplus' doesn't mean the US debts were paid back in full at 1998. I simply wanted to remind people that the $10 trillion US debt is not to be mistaken for what the chart shows, which is the US annual loss or surplus. We can quickly go from deficit to surplus, but to pay off all US debt will take much more than a few years to accomplish. That's all.

[Darth InSidious]

Personally, I think there should be a poll tax of 95% on all people who are not British citizens and who have lived outside the UK for more than three weeks.