Is it Time to Raise Taxes?

Recession ended last spring. Reagan raised taxes 6 years out of the 8 he was in office.

 

Increase my revenue.

 

Some folks would argue the pork and waste begins with the excess greed of Wall street and shill corporations.

 

On the backs of others?

 

Careful, that's Socialist rhetoric.

 

Asking if you would raise your revenue on the backs of others is socialist?

 

Sounds like commie talk to me.

Seriously, I'd get another job or a raise from my current employer.

 

Would you even consider cuts in spending? So far, you haven't mentioned it...

 

I would certainly do both and hopefully meet someplace in the middle. But let's say I was underwater on my mortgage for whatever reason. Because of higher interest rates on my ARM, my payments shot up. I would certainly get rid of cable, cell phones, and any other luxuries and tell those businesses they can't count on me anymore. So now I've managed to cut out $167 dollars out of my budget, but my new mortage is $400 higher. I'm 3 months behind on my mortgage payments and have a deficit of $233 every month. My only option is to raise more revenue or go live in a box. Why in this country are we OK with getting rid of the cable, the cell phone, and other luxuries but unwilling to tackle our debt by increasing our revenue? Makes very little sense to not attack it from both ends.

 

What you are proposing...getting rid of the cell, cable...is the easy, obvious stuff. Why stop there? Keep going. There are many many more items that can be eliminated if your budget is squeezed without having to take if from other who are similarly squeezed.

 

Not in my analogy. You will never pay off the debt cutting things out of the budget even if you eliminate the government completely. If you know the numbers, you know this is true.

 

Why cut anything from your budget, Moen? Just ask your neighbors to give you some money.

 

We tried that with our neighbor China. But it hasn't worked out real well.

 

And the Saudis, the Japanese, the Brits, the Germans, and even the Iranians. What is actually wrong with our richest corporations paying a share? They claim to have this high tax rate but 2/3 of them pay nothing at all.

 

Can't there be alternative ways to raise revenue without taking it from people who can't afford it?

 

Yes! Yes! Yes! Tax the wealthy at the same rates they were taxed at before Reagan. Ding! Ding! Ding!

The middle class is tapped out and all the wealth in this country has pooled at the top. Like 80% of the people asked say this is a good solution and only the wealthy themselves and the ideologues are against it.

 

So, who are the wealthy? What's the benchmark (remembering, of course, in another thread you said it's the small business owner who needs tax breaks)? And what about the truly wealthy who don't have taxable wages?

 

What the hell difference does it really make? Make it 250K, 450K, 750K, or 1 million or make it progressive, who cares. The point is that there isn't a shortage of money in this country. The money has all pooled at the very top and crushed our states, crushed our middle class, and crushed our entire economy. There is just so much wealth pooled at the top thanks to billionaire friendly tax loopholes and thanks to the lack of manufacturing going on due to off-shoring US jobs that the only possible result is a huge vacuum sound of money being sucked out of the middle class.
Tax policy has to change or the middle class will continue to erode. I didn't say begin to disappear because that ship has already sailed. It is a matter of stemming the blood letting at this point. Ignoring this warning won't hurt me nearly as much as it will hurt you. I think that the best 3 words to describe people on the Right that can't see what is right in front of their faces is.....Eyes Wide Shut.

 

I guess the light just came on!! You've just made every point I've been pressing here for the last couple of years.
As a country, we are guilty of looking for the temporary fix to our problems without regard to the issues at the core and the permanent fix. Virtually every obstacle we face is economic at the core and most of those are tax-centric....why else do we have a 22,000 page tax code with nearly 90% of the tax code being amendments, add-ons, etc? It's because we have chosen to "update" the current tax system rather than scrap it & start anew.
I agree with dr moen that there is plenty of money in this country but I disagree with his belief that our budget deficient can only be resolved by taking more & more from the best earners & producers among us. The dirty little secret the left doesn't want us to know is that the majority of this wealth pooled at the top is held by wealthy, old money families (liberals on the most part) and it is taxed at 1/3 the rate of real income- the money people go out & work hard to earn. There is also billions & billions of dollars being traded back and forth (and not taxed) by people who don't participate in our income tax system- self employed, cash under the table tax cheats...criminal enterprises....foreign visitors, etc.
The money is there, we just need to be smarter & more open-minded in identifying the sources.

 

Sorry, GOP: Tax Revenue Needs To Go Up
By Jeanne Sahadi


NEW YORK (CNNMoney) -- The United States has a spending problem, not a revenue problem.

That is the persistent Republican mantra whenever the question of how to reduce deficits comes up. The party line: Cut spending, and under no circumstances raise taxes.

The GOP is right about one thing: The country is spending more than it can afford. And economists on the left and right generally agree that big tax increases can hurt economic growth. (Fix budget before a crisis)

But there is abundant evidence showing that taxes must be part of debt reduction, however distasteful the GOP finds them.

Why? Because the looming debt problem is just too big. And reducing it by spending cuts alone would require draconian changes that could hurt the economy far more than a mix of spending cuts and tax increases.

Here's one way to conceive of just how big the problem is.

If lawmakers wanted to permanently freeze the debt held by the public at the today's level -- 62% of GDP -- they would need to immediately cut spending by 35% or about $1.2 trillion, according to the Government Accountability Office. And those cuts would need to be permanent from hereon out.

How hard would that be?

Consider that in 2010, all of discretionary spending -- including defense -- totaled $1.35 trillion. In other words, to do deficit reduction all on the spending side means "you have to cut into the real meat," said Roberton Williams, senior fellow at the Tax Policy Center.

Consider, too, how much fun lawmakers are having right now trying to negotiate spending cuts for this year alone. Their working range: Between $10 billion and $61 billion.

And here's the kicker: Even permanently cutting $1.2 trillion today wouldn't be the end of the story. Deficit hawks note that public debt at 60% is still well above the country's historical average -- which is below 40%. So more cutting would need to occur in subsequent decades.

Slowing the real drivers of debt takes time
One the biggest reasons for increased spending -- and hence, high debt -- is the aging of the population. That means burgeoning Medicare and Social Security rolls, especially over the next 25 years.

Inflation in health care costs is the other big problem.

In both cases, fixing those problems without increasing revenue isn't feasible. For one, kicking grandma to the curb is not really an option in civilized society. And making adjustments to spending will not happen overnight.

Done right, benefit changes would have to be phased in so future retirees can adjust their plans accordingly. And reducing health care costs requires systemic changes over time.

"Since retirement program reforms can only be made slowly, we must also cap defense and non-defense discretionary spending, restrain other mandatory programs, and restructure the tax code to raise more revenue," said federal budget expert Alice Rivlin at a Senate Budget Committee hearing last week.

If that doesn't happen and lawmakers instead keep tax revenue at around 18% of GDP -- the historical average -- "by 2040 we will only be collecting enough revenue to cover the costs of net interest and not quite all of Social Security," budget expert Diane Rogers noted in her blog Economistmom.com.

Tax cuts exacerbate the spending problem

The fastest growing area of spending is interest on the debt, which is expected to approach $1 trillion a year by the end of this decade.

Since tax cuts don't pay for themselves, they reduce revenue going into federal coffers. And that increases the debt. More debt means higher interest costs.

Obama's real deficit problem: His tax cuts
While Republicans portray President Obama as the biggest of big spenders, in fact the driving force behind the big deficits in his 2012 budget proposal isn't spending. It's his proposed tax cuts, and the increased interest costs that result, according to an analysis by the independent Congressional Budget Office.

The $1 trillion in annual tax breaks also exacerbate the spending problem and have the perverse effect of pushing some rates higher.

The president's bipartisan debt commission called this phenomenon out.

"Instead of promoting economic growth and competitiveness, our current code drives up health care costs and provides special treatment to special interests. The code presents individuals and businesses with perverse economic incentives instead of a level playing field," the commission wrote in its final report.

Hints of some flexibility?

In the current debate, some Republicans are reluctantly acknowledging that taxes might need to play a role in debt reduction.

"Taxes? They'll be a bitter pill for me. But we have got to get this country on the right path. ... I'd have to challenge [calls to put taxes on the table], but I would look at it," Jeff Sessions, the top Republican on the Senate budget committee, told Bloomberg's Al Hunt earlier this month.

Meanwhile, three other Republican senators -- Tom Coburn, Mike Crapo and Saxby Chambliss -- are part of the bipartisan Gang of Six, which is looking to turn the proposals from President Obama's debt-reduction commission into legislation.

A key commission recommendation: Reform the tax code by eliminating most tax breaks. That would raise a lot of revenue, and the commission proposal would use most of it to reduce rates. But it would also earmark a small amount for deficit reduction.