How to pay the debt

[Der-Lowe]

With taxes, duh. But what kind of taxes?
Mankiw, among others suggests that the budget deficit should be reduced (and reversed) with a creation of the VAT, Value Added Tax, that is to replace all other sources of taxation.
Basically a VAT is like an Income tax, which
1) is flat (same rate for everyone)
2) Taxes consumption, not income.

On the plus side, it's not distortive (since every good is being taxed proportionately, you won't change your consumption pattern). However, it's regressive, since those with lower incomes will consume a higher proportion of their incomes, and therefore, pay a larger proportion of their incomes in taxes.

I say: 90% marginal tax rates!
But you know me, I'm a commie.

[Al6200]

At 10/14/09 01:19 PM, Der-Lowe wrote:

I say: 90% marginal tax rates!
But you know me, I'm a commie.

Call me a right wing looney, but wouldn't 90% put us on the right side of the Laffer curve and which would lead to smaller revenues? I think that labor is elastic enough that they'd be willing to work harder when the marginal tax rate is 50% then when it is 90% to to a sufficient degree to make up for the smaller share of the economy that is collected in taxes.

My solution would be to make taxes more progressive and get rid of all government benefits for wind and solar (they're worthless with the current technology).

I'd also impose a large inheritance tax on the wealthy. The super rich (multimillionaires) tend to vote for the Democrats anyway, so taxing them isn't that big of a deal.

[TheMason]

At 10/14/09 01:19 PM, Der-Lowe wrote: With taxes, duh. But what kind of taxes?
Mankiw, among others suggests that the budget deficit should be reduced (and reversed) with a creation of the VAT, Value Added Tax, that is to replace all other sources of taxation.
Basically a VAT is like an Income tax, which
1) is flat (same rate for everyone)
2) Taxes consumption, not income.

This was first tried by FDR during the Great Depression, however back then it was called a "sin" or "luxury" tax. It was placed on things such as furs, cars, whiskey, cigarettes, etc. Basically the premise that we'll tax the things that are not needed for human survival.

One of the things that happened is what it was very regressive. Furs, yachts and toys for the rich did not bring in enough revenue to justify their continued enforcement. However, the consumer goods most consumed by the poor were money makers. So things like VAT will dispropoartionately take from the poor.

I find it absolutely laughable how the Democrats spun Bush's tax cuts for the "rich" (actually the rich and the poor). What the sheep who buy into the rhetoric don't understand...is the Democrats will actually raise their tax burden from several different directions.

Ah the American Electorate, quick to anger and quick to sleep.

[ReiperX]

I'd like to see a few things happen.

1) Raise taxes slightly on the poor (1 or 2%). I doubt this is going to cripple too many people.

2) Do away with the ability to use tax credits to get more back than you put in. This is something that has always bugged the hell out of me. I can see certain people being able to get all of the money paid in income taxes back (although the % needs to be a hell of a lot smaller than it is now).

[TheMason]

At 10/14/09 04:00 PM, ReiperX wrote: 2) Do away with the ability to use tax credits to get more back than you put in. This is something that has always bugged the hell out of me. I can see certain people being able to get all of the money paid in income taxes back (although the % needs to be a hell of a lot smaller than it is now).

This would actually accomplish the first thing you want to see. When I was married I had a negative tax rate. Our family income was $20K (my ex-wife was in medical school). Then when I'm single and a grad student making $16K I still had a negative tax rate (-7% to be exact).

While it was all sorts of awesome getting $1,200 (single) to $4,000 (married) back when I only paid $700-1,200 in taxes...it is not socially responsible.

I am all in favor of no one getting more back than they paid in.

[TheShrike]

Legalize pot.

Tax the hell out of it.

Let the hippies pay for welfare.

[DarkBetaStudios]

Personally, I think the best way for the Economy to rebound, we should tax the Obsenely rich big time.
Thier interest coming from the insane amounts of money in the banks they own pays for thier obsene spending habits.

That being said, I don't mean we should tax the crap out of them, or bring Communism or anything, but they make millions per year, and they should probably pay much higher emergency taxes.

But that's just my opinion.

LordWalsh of DBS

[TheShrike]

At 10/14/09 09:30 PM, DarkBetaStudios wrote: Personally, I think the best way for the Economy to rebound, we should tax the Obsenely rich big time.

Even though you quantify your statement by specifying obscenely rich, I guarantee you some trickle-down asshat will come in here claiming that would hurt the economy.

[michelinman]

At 10/14/09 09:29 PM, TheShrike wrote: Legalize pot.

Tax the hell out of it.

Let the hippies pay for welfare.

If they legalized pot, I'd grow my own. For sure.

[DarkBetaStudios]

At 10/14/09 09:48 PM, TheShrike wrote:

At 10/14/09 09:30 PM, DarkBetaStudios wrote: Personally, I think the best way for the Economy to rebound, we should tax the Obsenely rich big time.

Even though you quantify your statement by specifying obscenely rich, I guarantee you some trickle-down asshat will come in here claiming that would hurt the economy.

"My Asshat senses are tingling...?"
Sounds to me that that we just might be in the Newgrounds Forums. Noone anywhere but Newgrounds and 4Chan would someone do that.
Wait....are we....in 4Chania?!

[TheShrike]

At 10/14/09 09:51 PM, michelinman wrote: If they legalized pot, I'd grow my own. For sure.

Ah, but can you deny that you'd buy a bag/pack of joints at least once? Or maybe if you were just feeling particularly lazy that day?

And we all know how active those stoners are. They're so motivated!

Not a personal judgement against you, but I think 90% of the people who claim they'd just grow their own would probably make a single half-hearted attempt before trying to rationalize adding pot money to their budget.

[Attacknun]

Take a loan out of one bank to pay the debt. Then take another loan out of a different bank to off the first bank.

Just continue this cycle.

[michelinman]

At 10/14/09 10:00 PM, TheShrike wrote: Not a personal judgement against you, but I think 90% of the people who claim they'd just grow their own would probably make a single half-hearted attempt before trying to rationalize adding pot money to their budget.

For the more motivated among us though, it'd be nothing to sell it for JUST under the federal price for it. Weed is just too damn underground to be able to regulate how it's sold.

[ReiperX]

At 10/14/09 04:21 PM, TheMason wrote:

At 10/14/09 04:00 PM, ReiperX wrote: 2) Do away with the ability to use tax credits to get more back than you put in. This is something that has always bugged the hell out of me. I can see certain people being able to get all of the money paid in income taxes back (although the % needs to be a hell of a lot smaller than it is now).

This would actually accomplish the first thing you want to see. When I was married I had a negative tax rate. Our family income was $20K (my ex-wife was in medical school). Then when I'm single and a grad student making $16K I still had a negative tax rate (-7% to be exact).

While it was all sorts of awesome getting $1,200 (single) to $4,000 (married) back when I only paid $700-1,200 in taxes...it is not socially responsible.

I am all in favor of no one getting more back than they paid in.

Right now my tax rate is about 3% after business deductions (I have my own side business), college, mortgage ect, and I feel bad enough about only paying 3%. But I have to agree that it is not responsible to allow people to get back more than what they pay in.

[TheMason]

At 10/14/09 09:30 PM, DarkBetaStudios wrote: Personally, I think the best way for the Economy to rebound, we should tax the Obsenely rich big time.
Thier interest coming from the insane amounts of money in the banks they own pays for thier obsene spending habits.

You do realize that currently they pay the majority of the income tax, right?

Also when FDR attempted "sin" or "luxury" taxes, the ones that affected only the rich were soon discarded because they did not bring in a significant enough revenue stream to justify their continued existence. However, those excise taxes that disproportionately effected the poor were maintained because they did generate revenue.

Also what about all the jobs that will be lost if the "obsene" (sic) spending habits of the rich are suddenly curtailed? Afterall it is not another rich person who is manufacturing, marketing or otherwise involved in producing those goods the rich are buying.

In the end you're talking about making the economy worse...not better.

[TheMason]

At 10/15/09 04:29 AM, ReiperX wrote: Right now my tax rate is about 3% after business deductions (I have my own side business), college, mortgage ect, and I feel bad enough about only paying 3%. But I have to agree that it is not responsible to allow people to get back more than what they pay in.

Why feel bad for paying what you pay? What is the government going to do with the money you earn/generate that you cannot do better yourself?

I don't know what your side business is, but given time what are the chances that you could provide a job to at least one other person? Then your employee or employees will be paying taxes too. Getting the unemployment rate down to 5-7% will be the ultimate sign that the economy has recovered...and the most important thing the government and private citizens can do.

If you want to be socially conscious, what's stopping you? You don't need to give it to the state or federal government to improve education. Donate the money to your local school. There are a myriad of charities that you can donate to...hell they don't always want your money but your time.

[Der-Lowe]

At 10/14/09 02:55 PM, Al6200 wrote:

At 10/14/09 01:19 PM, Der-Lowe wrote: I say: 90% marginal tax rates!
But you know me, I'm a commie.

Call me a right wing looney, but wouldn't 90% put us on the right side of the Laffer curve and which would lead to smaller revenues? I think that labor is elastic enough that they'd be willing to work harder when the marginal tax rate is 50% then when it is 90% to to a sufficient degree to make up for the smaller share of the economy that is collected in taxes.

Nah. Empirical studies have shown that the labor supply in the high income brackets bends backwards, ie inverse relationship between salaries and hours of labor supplied. A 90% marginal income tax on the highest bracket would actually increase the numbers of hours worked.

My solution would be to make taxes more progressive and get rid of all government benefits for wind and solar (they're worthless with the current technology).

I don't really know if they're fiscally relevant.

I'd also impose a large inheritance tax on the wealthy. The super rich (multimillionaires) tend to vote for the Democrats anyway, so taxing them isn't that big of a deal.

Death taxes are easily eluded (just donate everything before you die), much of the wealth doesn't end up in the government.

At 10/14/09 03:54 PM, TheMason wrote: This was first tried by FDR during the Great Depression, however back then it was called a "sin" or "luxury" tax. It was placed on things such as furs, cars, whiskey, cigarettes, etc. Basically the premise that we'll tax the things that are not needed for human survival.

One of the things that happened is what it was very regressive. Furs, yachts and toys for the rich did not bring in enough revenue to justify their continued enforcement. However, the consumer goods most consumed by the poor were money makers. So things like VAT will dispropoartionately take from the poor.

There's a light regressive effect, yes. Mankiw (the first link I've provided), suggests creating a demogrant (lump-sum transfer) to balance its light regressiveness, yet does not say what the basis of the demogrant is so as to be able to compensate this regressiveness.

However, since the VAT is highly efficient, it is used in most countries in conjunction with other taxes (or alone in those countries which do not value equality highly, ie, Latin America and Eastern Europe).

At 10/14/09 04:00 PM, ReiperX wrote: I'd like to see a few things happen.

1) Raise taxes slightly on the poor (1 or 2%). I doubt this is going to cripple too many people.

You could do the same with wealthy people, getting more money, and not throwing anyone below the poverty line.

2) Do away with the ability to use tax credits to get more back than you put in. This is something that has always bugged the hell out of me. I can see certain people being able to get all of the money paid in income taxes back (although the % needs to be a hell of a lot smaller than it is now).

It's a subsidy, in order to redistribute income. Remember that reducing a subsidy is the same as creating a tax; your solution basically is: tax the hell out of those who are in a disadvantaged position. woo!

At 10/14/09 09:29 PM, TheShrike wrote: Legalize pot.

Tax the hell out of it.

Let the hippies pay for welfare.

Could work.
What's the current consumption and price of marijuana in the US?

[SadisticMonkey]

So the government wastes TRILLIONS of dollars of money it doesn't have, and so the answer is to FORCE hard working Americans at the threat of their liberty to pay for it?

Get out of here you stupid communist.

At 10/14/09 09:48 PM, TheShrike wrote: Even though you quantify your statement by specifying obscenely rich, I guarantee you some trickle-down asshat will come in here claiming that would hurt the economy.

Liberals: Tax the rich "greedy evil" corporations! Take away money that could be used to expand their business and hence create jobs! Wah!

Liberals in next breath: Wah! There's no jobs! Give everyone welfare and raise the already ridiculously high tax rate for the wealthy! Wah!

[lapis]

At 10/16/09 02:21 AM, SadisticMonkey wrote: So the government wastes TRILLIONS of dollars of money it doesn't have, and so the answer is to FORCE hard working Americans at the threat of their liberty to pay for it?

Maybe those hard working Americans shouldn't have elected said government? At the very least, every democracy gets the government that it deserves.

[pr0ded]

by paying back the earth, via paving over endemic plants

[SadisticMonkey]

At 10/16/09 05:48 AM, lapis wrote: Maybe those hard working Americans shouldn't have elected said government? At the very least, every democracy gets the government that it deserves.

What about the large number of these people who didn't vote for said government, and who could do nothing more than to vote against them to prevent them from being elected?

[Korriken]

At 10/14/09 09:48 PM, TheShrike wrote:

Even though you quantify your statement by specifying obscenely rich, I guarantee you some trickle-down asshat will come in here claiming that would hurt the economy.

California, New York. Michigan. need I say more? ok fine then.

California, New York, and Michigan all place massive tax burdens in the rich. What happens? the Rich leave for states with less taxes. Every time these states need money they pump more taxes on the rich, and oddly enough, they're not drowning in money, to the contrary, they're broke! No one wants to open a business in California, no one wants to open a business in New York, and no one wants to open a business in Michigan.

Trickle Down? no need to mention it. The simple fact that businesses aren't started by those who sit on their front porch all day waiting for the mail man to show up with their welfare check should be enough.

The rich start businesses, the rich invest in businesses, the rich make money which can be taxed, While this happens people become employed who then can work and make money, which is taxed. Same people also buy stuff, which is taxed.

you overburden the rich, they will leave for a state with a lighter tax burden and bring their money and businesses with them. This is why the states with such a huge tax rate is overflowing with entitlement chasers and not many businessmen and multimillionaires.

and as so, if the federal government decides to place huge burdens on the rich, they can just as easily apply for and get visas to live elsewhere, and have the means to live there long enough to get citizenship.There are many places that would just LOVE to take in our wealthy businessmen.

Libs think that the rich are a bunch of cattle who give golden milk, but they soon find out if you kill the cow to get the milk faster, the milk stops flowing.

Wanna pay the debt? lower taxes so businesses can hire again, stop with piling on entitlements, begin ratcheting down entitlements, make people get jobs, and stop wasting money on frivolous things, and THEN you can begin to pay off the debt.

that is common sense!

[lapis]

At 10/16/09 06:14 AM, SadisticMonkey wrote:

At 10/16/09 05:48 AM, lapis wrote: Maybe those hard working Americans shouldn't have elected said government? At the very least, every democracy gets the government that it deserves.

What about the large number of these people who didn't vote for said government, and who could do nothing more than to vote against them to prevent them from being elected?

Campaign harder next time? I mean, one of the essences of a government is that it takes money from the collective and then does things with that money, like buying tanks and building courthouses and whatnot. Everyone has an opinion about what money they and others should give and get, and since it's hard to objectively say which one has it right the only real way to settle these issues in a democracy is through majority voting. If you're represented in parliamant by a minority that can't act as a swing voter then, well, tough luck. Democracy can be a bitch like that.

I mean, do you have some sort of objective moral framework that you can use to determine what kind of taxing/spending habits are fair, or at least more fair than majority decisions?

[SadisticMonkey]

Well, I'm not going to go into all my specific beliefs about economic policy, I'd like to make a few general points.

Firstly, I think the most important thing when dealing with this topic is to be pragmatic, highlighted by Korriken in his above post. Sure, even if we all agreed "taxing the hell out of the rich" was the best solution in terms of morality, in reality this clearly would, if anything, make the situation much worse.

Secondly, following on from Korriken's points, if you want your economy to woek, you need to let the rich have money.
This is the kind of thing that really exposes the flaws in liberal "feel good" politics.
The less money the rich are able to have, the less jobs there are. The less jobs, the more people on welfare. the greater the tax burden on everyone, especially the rich, whose taxing caused the problem in the first place.

Thirdly, I don't see what's so moral about increasing the tax burden of the 'Obsenely (sic)' rich.
The tax burden of top 1% now exceeds that of bottom 95%.
This already should be seen as ridiculous and unfair. Liberals act as if the magnitude of an individual's income is decided by a raffle or lottery, and that taxing them makes things more fair. In reality this is actually less fair, as generally one's ability to make money is based on how hard they work, how intelligent they are and most importantly how good they are at what they do.

Fourthly, do you believe it is moral that the people who benefit least from government spending should be forced to pay for more of it than anyone else? Forced to pay for the government's idiotic fiscal liberalism?
Because that seems pretty objectively immoral to me.

[lapis]

First off, for some reason I thought that you were talking about Obama when I read your post, later realising that you were, of course, responding to Der-Lowe, who is indeed a dangerous Communist. So my comments about democracy may have come off as a little out of the blue.

At 10/16/09 08:21 AM, SadisticMonkey wrote: Firstly, I think the most important thing when dealing with this topic is to be pragmatic,

Everybody's pragmatic. People with a low income are pragmatic by wanting to tax the fuck out of the rich. People with a high income are pragmatic by not wanting to be taxed the fuck out of.

Secondly, following on from Korriken's points, if you want your economy to woek, you need to let the rich have money.

Sweden and Denmark have individual income tax rates that go up to 57% and 59% respectively in the highest bracket. Still, I don't think that the poor over there are scavenging for trash can food. In fact, their poor are in terms of income about comparable to those in the US. In addition, they get health insurance, cheaper public transport, better access to universities etc.

Of course there are limits on the extent to which you can tax the rich, however, if we assume that the tax rates stay within certain bounds the poor will profit from a higher tax rate and a more even income distribution. So you will get a clash between interest instead of a single objectively fair solution.

The less money the rich are able to have, the less jobs there are.

But higher living standards for the poor people that do have jobs, and the unemployed people can then go and clean up parks, being paid using taxpayer money. But seriously, unemployment rates between the US and Sweden don't differ that much, I think right now Sweden even has lower unemployment.

Thirdly, I don't see what's so moral about increasing the tax burden of the 'Obsenely (sic)' rich.

You have your morality, someone else's morality may be more along the lines of "from each according to his ability, to each according to his needs". In the end, the morality of the majority is what becomes government policy in a democratic country.

The tax burden of top 1% now exceeds that of bottom 95%.

Maybe that says more about the income distribution than the fairness of the taxes.

Fourthly, do you believe it is moral that the people who benefit least from government spending should be forced to pay for more of it than anyone else?

Not only do I find that morally justifiable, I find it pretty obvious. If you want to make universities more accessible to people regardless of their parents' income by using taxpayer money to partially fund their education, then who are you going to tax? Poor people?

Also, how about government-given development aid? Who are we going to give it to? Ourselves?

[Der-Lowe]

At 10/16/09 02:21 AM, SadisticMonkey wrote: So the government wastes TRILLIONS of dollars of money it doesn't have, and so the answer is to FORCE hard working Americans at the threat of their liberty to pay for it?

As the deficit was created by a reduction in taxes, it follows that inverting the cause of the problem would solve it.
Now, what this thread was (or at least, intended to be) about was the best way of raising revenue so as to cancel, or rather, reduce the debt burden. Professor Mankiw has suggested imposing a VAT, whereas I am more in favor of intensifying the income tax, for the reasons that were being discussed prior to your digression.

At 10/16/09 06:55 AM, Korriken wrote: California, New York. Michigan. need I say more? ok fine then.

California, New York, and Michigan all place massive tax burdens in the rich. What happens? the Rich leave for states with less taxes. Every time these states need money they pump more taxes on the rich, and oddly enough, they're not drowning in money, to the contrary, they're broke! No one wants to open a business in California, no one wants to open a business in New York, and no one wants to open a business in Michigan.

Trickle Down? no need to mention it. The simple fact that businesses aren't started by those who sit on their front porch all day waiting for the mail man to show up with their welfare check should be enough.

The rich start businesses, the rich invest in businesses, the rich make money which can be taxed, While this happens people become employed who then can work and make money, which is taxed. Same people also buy stuff, which is taxed.

you overburden the rich, they will leave for a state with a lighter tax burden and bring their money and businesses with them. This is why the states with such a huge tax rate is overflowing with entitlement chasers and not many businessmen and multimillionaires.

and as so, if the federal government decides to place huge burdens on the rich, they can just as easily apply for and get visas to live elsewhere, and have the means to live there long enough to get citizenship.There are many places that would just LOVE to take in our wealthy businessmen.

This a nice example of the fallacy of composition, one of the most popular ones in economics. You say that, according to you, because a measure has had negative effects on states it will therefore have negative effects if it is imposed on the country as a whole.
Ignoring the dubious accuracy of your first statement, it does not follow that the effects imposed on an individual (or a subset of individuals) will have the same effects on the whole. One of the most clear examples is with the printing of money. If I print 100,000 dollars and hand them to you, you'll certainly be better off, since the expansion of the money supply will be minimal, you'll gain 100,000 dollars. However, if I were to do the same for every American, then the price level will certainly adjust to the massive printing.
Same happens with your example; a tax imposed on a State within the US is likely to be easily avoided by simply moving to other State, because most states are alike: they share the same customs, legal practices, educational levels, average incomes, etc, so moving from one state to the other is quite straight forward.
This is not the case for leaving the US. There are few countries to which a major reallocation of resources could take place (safe legal framework, highly qualified labor) if a tax hike were to take place, and they all have higher taxes than the US.

Wanna pay the debt? lower taxes so businesses can hire again, stop with piling on entitlements, begin ratcheting down entitlements, make people get jobs, and stop wasting money on frivolous things, and THEN you can begin to pay off the debt.

You seem to forget that lowering taxes is what has created the debt in the first place. You see, before the 80s, the US had a very basic yet effective fiscal policy: when we're at war, we take debt to pay for it, and then in peace years, we create surpluses to pay it back. This "law" was broken in the 80s with the beginning of the tax-cut policy, fixed in the 90s, and broken again in the year 2001.
Lowering taxes has been proved catastrophic for the coffers of the US Treasury.
However, I cannot fail to agree with the necessity of delaying the fiscal correction for a time where economic recovery is clear. This whole VAT idea, if you read the links I have provided to the discussion, is actually thought to resolve fiscal issues that will manifest themselves in 20 years or so.

that is common sense!

A final comment: common sense is the mental process laymen have. Us scientists rather use the scientific method.

At 10/16/09 08:21 AM, SadisticMonkey wrote: Well, I'm not going to go into all my specific beliefs about economic policy, I'd like to make a few general points.

Firstly, I think the most important thing when dealing with this topic is to be pragmatic, highlighted by Korriken in his above post. Sure, even if we all agreed "taxing the hell out of the rich" was the best solution in terms of morality, in reality this clearly would, if anything, make the situation much worse.

I have already provided positive analysis of the impacts, read my reply to Al6200.

Secondly, following on from Korriken's points, if you want your economy to woek, you need to let the rich have money.
This is the kind of thing that really exposes the flaws in liberal "feel good" politics.
The less money the rich are able to have, the less jobs there are.

This is the lowest point in your argument. Macroeconomics, which handles the issue of unemployment, has never pointed in the direction you have stated.
For us to understand unemployment, we need to understand what are the underlying forces that determine it: as usual, demand and supply of the good, this time, input, labor.

Unemployment takes place where there is not enough demand of labor. Demand of labor depends on, the relationship between the wage the firm has to pay, and the amount of money the labor "bought" will generate.

Andthat's it. The firm compares the cost of labor with the revenue of the good that labor produces. If benefit>cost, then hires. What you can do is A) reduce costs (labor subsidy) B) increase benefit (increase demand, through stimulus). Since stimulus has a larger bang for the buck (because of its multiplier effects), it's what's being done.
Professor Frank has written a column on the subject

But again, this was not a discussion about counter-cyclical policies.

This was about fixing the long term fiscal standing of the US Treasury.

[jAk88]

What you all fail to realize is that we are past the stage where we could simply pay off our debt by raising taxes or lowering spending, so any debate here is useless.

However, my solution, if it were still possible, would be to lower spending significantly.

[Korriken]

At 10/16/09 08:57 PM, Der-Lowe wrote:

This a nice example of the fallacy of composition, one of the most popular ones in economics. You say that, according to you, because a measure has had negative effects on states it will therefore have negative effects if it is imposed on the country as a whole.

It
already
Happens

Ignoring the dubious accuracy of your first statement, it does not follow that the effects imposed on an individual (or a subset of individuals) will have the same effects on the whole. One of the most clear examples is with the printing of money. If I print 100,000 dollars and hand them to you, you'll certainly be better off, since the expansion of the money supply will be minimal, you'll gain 100,000 dollars. However, if I were to do the same for every American, then the price level will certainly adjust to the massive printing.

printing and giving out money has little to do with crushing the well off with a massive tax burden. the rich will always protect their money. you start handing out massive quantities of printed money, and the rich will swap their american dollars for another currency to protect the value of their money. This is also why most of the well off own a lot of gold.

Same happens with your example; a tax imposed on a State within the US is likely to be easily avoided by simply moving to other State, because most states are alike: they share the same customs, legal practices, educational levels, average incomes, etc, so moving from one state to the other is quite straight forward.

do go on....

This is not the case for leaving the US. There are few countries to which a major reallocation of resources could take place (safe legal framework, highly qualified labor) if a tax hike were to take place, and they all have higher taxes than the US.

I wouldn't be so sure about that one, Jimbo.

You seem to forget that lowering taxes is what has created the debt in the first place.

Horse crap.

You see, before the 80s, the US had a very basic yet effective fiscal policy: when we're at war, we take debt to pay for it, and then in peace years, we create surpluses to pay it back. This "law" was broken in the 80s with the beginning of the tax-cut policy, fixed in the 90s, and broken again in the year 2001.

Lowering taxes has been proved catastrophic for the coffers of the US Treasury.

Do not
feed me
Lies!!

Massive entitlements and out of control spending have been proven catastrophic for the coffers of the US treasury. dropping taxes spurs economic growth, which in turn increases tax revenue.

that is common sense!

A final comment: common sense is the mental process laymen have. Us scientists rather use the scientific method.

Common sense is the backbone of the scientific method. but what would liberals know about either since they cast both aside when it does not work for what they want?

This is the lowest point in your argument. Macroeconomics, which handles the issue of unemployment, has never pointed in the direction you have stated.

thats because macroeconomics is WRONG!

For us to understand unemployment, we need to understand what are the underlying forces that determine it: as usual, demand and supply of the good, this time, input, labor.

investment, business growth, asset protection.

Unemployment takes place where there is not enough demand of labor. Demand of labor depends on, the relationship between the wage the firm has to pay, and the amount of money the labor "bought" will generate.

Unemployment happens when businesses can't afford to expand and make purchases of new equipment and such. Without such purchasea, there is not as much demand for labor. Most companies expand and operate using lines of credit. When the housing bubble burst and many banks went under, the credit market came to a screeching halt, cutting off the credit line to many businesses, these businesses, unable to secure the credit for their supplies, and business growth, were forced to either stagnate, contract, or shut down.

Andthat's it. The firm compares the cost of labor with the revenue of the good that labor produces. If benefit>cost, then hires. What you can do is A) reduce costs (labor subsidy) B) increase benefit (increase demand, through stimulus). Since stimulus has a larger bang for the buck (because of its multiplier effects), it's what's being done.

Keynes was wrong. his theory is crap and does not work. If the Keynesian Theory worked, Bush's and Obama's stimulus packages would have pulled us out already. Just ask the people of Japan who went through 10 years of back to back stimulus packages, their economy never once recovered during the entire time, and now their debt is 225% of their GDP. Stimulus packages fix nothing. Only true fiscal reform can bring us out of this mess. wasting trillions of tax dollars on frivolous programs and temporary labor won't make things work.

This was about fixing the long term fiscal standing of the US Treasury.

right.....

[ReiperX]

At 10/15/09 08:09 AM, TheMason wrote:

At 10/15/09 04:29 AM, ReiperX wrote: Right now my tax rate is about 3% after business deductions (I have my own side business), college, mortgage ect, and I feel bad enough about only paying 3%. But I have to agree that it is not responsible to allow people to get back more than what they pay in.

Why feel bad for paying what you pay? What is the government going to do with the money you earn/generate that you cannot do better yourself?

I have no money problems currently. My wife and I both have the cars that we want ('09 Mini's), we have plenty of extra money per paycheck. I personally would have no problem paying higher taxes (and we earn below the national average for a married couple, we are around 60k). By paying such a small portion of my income in taxes, it makes me feel as if I'm not pulling my weight in taxes, which is something that I am a big believer in. I think that it's BS that the rich pay such a large sum of our overall taxes every year. I understand that they will pay more because they make more, but at the same time I understand that it needs to be a little more spread out across all classes.

I don't know what your side business is, but given time what are the chances that you could provide a job to at least one other person? Then your employee or employees will be paying taxes too. Getting the unemployment rate down to 5-7% will be the ultimate sign that the economy has recovered...and the most important thing the government and private citizens can do.

If we had enough traffic to generate enough income, then yeah I would most definitely hire someone. Currently we are using people working for their internships to get their portfolios built and get some experience shooting concerts and interviewing bands.

I agree that hiring people is the best thing we can do to help keep the economy recovering. Unfortunately is a lot of these people will not be happy with their new jobs because the pay a lot of people were receiving prior to the recession was greatly inflated. This goes from the top all the way down. I'm still in awe that CEOs can get multi million dollar bonuses for helping drive their profits into the ground.

If you want to be socially conscious, what's stopping you? You don't need to give it to the state or federal government to improve education. Donate the money to your local school. There are a myriad of charities that you can donate to...hell they don't always want your money but your time.

Money is something that I have some of. Currently though we are in the process of splitting all of our extra money to savings and paying off our house faster (can't refinance because of the housing crash, and we have an ARM that is creeping up). Time, on the other hand, is something that I don't have much of due to my work schedule and running my business.

[pr0ded]

Unemployment happens when businesses can't afford to expand and make purchases of new equipment and such.

sure, not because i think the job is immoral

i don't pick sides, but i know better science to talk about
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