Taxes must rise for everyone to pay for all the new spending

Discussion in 'Politics' started by Wyldgusechaz, Sep 17, 2009.

  1. Wyldgusechaz

    Wyldgusechaz New Member

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    Say we raise taxes on the richest 3% of Americans. The top 3% make about $600 billion/year.

    Raise their taxes a full 10%. Do it like this: Extend the Medicare portion of FICA to ALL income. Right now i avoid being taxed on any monies over $100,000 by declaring it a dividend from my shell corporation. All highly compensated folks do this. Totally legal. But close that down.

    Bump taxes 7% to 43% or 45%.

    Net tax receipts to the money wasting liberal Democrats?: about $70 billion.

    Thats it. Not even a drop in the bucket.

    Taxes will have to rise for all income levels, even the poorest of the poor.

    Good work Phil Ayesho and the rest of the wacko progressives.
     
  2. SpeedoGuy

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    My heart bleeds for the oppressed, downtrodden wealthy-investor class.

    They've had it soooo bad the last few decades.
     
  3. B_VinylBoy

    B_VinylBoy New Member

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    As if the OP actually makes six figures...
    Then again, if four of them are before a decimal point that would technically be six numerals. Oh, to be "anonymous" and have the ability to pretend to be anything you wanted. :rolleyes:
     
  4. TurkeyWithaSunburn

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    How about increase taxes on all those corporations that got bailed out and are now making profits?

    When did Medicare taxes start being taken out of anything above $100,000? I thought it was indexed and it was just short of 99,000. Anything above that and there wasn't SocSec/Medicare taken out, at all!

    Complain all you want about taxes, during WWII the top tax rate was 95% on income tax. We've been in a war for several years and the taxes got lowered. Have to pay for a war somehow, lowering taxes doesn't bring in more money. The Medicare drug coverage expansion was a huge expansion of government spending, and that was created during the previous administration.
     
    #4 TurkeyWithaSunburn, Sep 17, 2009
    Last edited: Sep 17, 2009
  5. vince

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    Yep. I agree. Raise taxes. It's about time Americans started paying their way instead of borrowing from the Chinese. Prop 13 in California was the worst thing that ever happened for that state. Everybody wants highways and schools and six billion dollar aircraft carriers and now universal heathcare. All that costs and we'd all be better off if you paid as you go. Ya can't have your cake and eat it too. :cool:
     
  6. porter111

    porter111 New Member

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    Rollback the Bush taxcuts, its just 3% and will fund the healthcare program. We are spending to much in iraq, trillions at a time. When clinton left office there was a $1 trillion dollar surplus. We should of been using some of that to pay down the deficit. Instead we pissed it away in iraq and now we are in serious financial trouble. If china wanted to end us as a country they could take out all their cash and start seizing property all over the united states.

    We borrowed out of the social security trust fund and put a note saying "well pay ourselves back" we have a 7 trillion dollar national debt and a current year deficit that will end at roughly 1.6 trillion. This issue will only grow if we don't address it soon....
     
  7. Ajacoid

    Ajacoid Member

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    Boys & Girls and others,

    Never mind the concept for the government to live within its means like the rest of us have to. Never mind the billions of dollars wasted in bureaucracy and on pork. It's a whole other discussion why politicians (think they) need more money to spend.

    While it sounds reasonable to assume that increasing taxes would lead to increased tax revenues, the negative effect on economic activity (as history has shown) is such that revenues actually drop after tax increases. Unless you have a different agenda than raising money for government programs, it would make sense for those who believe in big government to explore those actions that result in the most revenues for their programs.

    When tax rates are reduced, the economy’s growth rate improves and living standards increase. Good tax policy has a number of interesting side effects. For instance, history tells us that tax revenues grow and "rich" taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden – a consequence that should lead class-warfare politicians to support lower tax rates.

    Evidence of this is that the top 10% of income earners carried a larger share of the income taxes collected in 2007 than they did in 2001. They were responsible for 67.33% of income taxes collected by the IRS in 2001 vs. 71.22% in 2007 according to IRS data, whereas the income tax burden placed on the bottom 50% of income earners dropped from 3.91% in 2000 to 2.89% in 2007.

    Have at it.
     
  8. D_Cleon W Ballbreath IV

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    If cutting taxes is always a good idea, why not eliminate all taxes. That must surely maximize government income.
    If you agree that carrying your argument to its logical conclusion is absurd, what tax rates would you consider reasonable?
     
  9. Ajacoid

    Ajacoid Member

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    I guess you're thinking that despite the overwhelming evidence to the contrary, that raising taxes is a good idea? You can pay more than the IRS expects from you, you know? They will take donations. I'm yet to hear about the left standing in line to voluntarily give more than required. And there are plenty of rich liberals. Hollywood alone could probably bail out California.

    To answer your question, I don't know what tax rates would be reasonable, because I don't think the money currently spent by government is reasonable. There is a huge gap between what they want to spend vs. what they ought to spend (for the record, it ought to be much less).

    To quote Thomas Jefferson: "A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government."

    By that definition, we have not had good government for quite some time.

    And for good measure, John Adams said that, "The happiness of society is the end of government."

    I don't agree with Adams entirely, because there is a role for government, and there is a need for monies to make that government operate. The scope of that government role and how it cost to run leaves much to be desired, no reasonable person could deny that.
     
  10. SilverTrain

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    Bush Administration cuts taxes......and then........global financial meltdown, stock markets plunge perilously and stay there, pensions & retirement accounts lose more than half their value, unemployment at record highs, banks fail......
     
  11. Jason

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    We've had this argument year-in year-out in Britain.

    Labour traditionally argue that there should be higher taxes on the wealthy. It is a popular message in a democracy, where the majority of voters will not be paying them. In the 1970s it led to the absurdity of 97.5% top rate of tax. Now with an election coming Labour are arguing for taxes on those most able to pay, ie the wealthy.

    The British experience has shown that raising taxes on the wealthy doesn't work. The wealthy are the experts at legal tax avoidance, they may well decide to defer income, they may well decide it isn't worth the bother of earning (certainly this was the case at 97.5% tax). Tax rises on the wealthy aren't going to bring in more tax revenue. If you want more tax revenue you have to tax middle and lower income groups. Actually the brutal position is that if you are serious about raising maximum income (rather than income distribution) you have to tax the poor.

    The same logic must apply in the US. Higher taxes only work if they hit the poor.
     
  12. Ajacoid

    Ajacoid Member

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    Tax revenues went up. Tax burden by the lower 50% of income earners went down. Tax burden for top 10% of income earners went up.

    If you can create a link between tax cuts and the financial crisis, one that is legit and founded in facts and truths (and not the talking points from Bill Maher and Keith Olbermann), I will bow before you. You may want to look at Freddie and Fannie, who ran it, what they did, how it was covered up, and what it lead to. Government interference with the free market was a major contributor to the financial crisis. Not the only one, but a major one. Bad business practices and greed were at play for sure. Too bad that behavior got rewarded with bailouts.
     
  13. mikeyh9in

    mikeyh9in Active Member

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    WildGuzChase,

    Yes... absolutely. You are correct.

    Let's start with repealing Bush's tax cut, let's then raise taxes to pay for this war that everyone seems to love. Let's raise taxes again to fund the medicare prescription drug program that Bush left *unfunded*. Let's raise them again to pay for TARP and the rest of the Bush financial bailouts.

    Seems like Bush loved to spend, spend, spend. Strange how I heard not a single peep from the "right", except "cut more taxes".

    Let's get our tax rates back to where Clinton raised them to during his "horribly repressive regime".
     
  14. B_VinylBoy

    B_VinylBoy New Member

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    Why are we even discussing tactics that would essentially help the rich get richer? And they blame the poor for needing handouts. :rolleyes:
     
  15. D_Cleon W Ballbreath IV

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    You go off in strange tangents instead of answering my question. You start by talking about the merits of raising taxes and assuming that I live in the U.S. You conclude with comments about the role of government and how it should be reduced.

    All of that seems irrelevant to the original question, on how to maximize income to the government. Given that the US is incredibly in debt, I would think that even if all government spending could be stopped that you'd still want to maximize tax revenues until the debt is paid off. Since there will be quite a bit of spending, there's even more reason to find the optimal rate.

    Only by knowing the "magic rate" that brings in the most to the government can we know if the current rates should be adjusted. At 95%, chances are it was too high. It's been slashed, but the calls for cuts continue. There is some point at which lowering the rate will indeed lower the amount taken in. Once that is passed, the only way to increase income is to raise taxes.

    As others have noted, during Clinton there was a yearly surplus. After Bush's cuts that was turned to massive deficits. That alone should be enough to think about returning to the "bad old days" when the economy was steaming along and the top marginal rate was a few percentage points higher.

    Since you brought it up: We live in a world that's changed a lot since the US was founded. We now have publicly funded schools, police and fire departments, libraries, interstate highways, Social Security, Medicare, etc. I'm not so sure the Founding Fathers would approve of these socialist innovations. But that isn't necessarily a bad thing.

    Going to an extreme: Giving people a little hand out may not only let them meet their needs but also keep them from getting desperate enough to rob me. Selfish motives can even lead to promoting the common good.
     
    #15 D_Cleon W Ballbreath IV, Sep 17, 2009
    Last edited: Sep 17, 2009
  16. lucky8

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    Taxation without representation is against the constitution...
     
  17. D_Cleon W Ballbreath IV

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    It was a rallying cry during the call for Independence, but it didn't make it into the Constitution. If it had, corporations would be paying no taxes now.
     
  18. Bbucko

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    VooDoo Economics served with an extra slice of sarcasm and condescension: the breakfast of champions.
     
  19. mikeyh9in

    mikeyh9in Active Member

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    We have had a long time to evaluate the true effect of "Trickle Down economics", and it has been proven wrong.
     
  20. Ajacoid

    Ajacoid Member

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    I guess if you choose to not look at facts, stick your head in the sand and squeeze your eyelids together as hard as you can, you'd come to your conclusion.

    So here's a historical overview for your education:

    The tax cuts of the 1920s
    Tax rates were slashed dramatically during the 1920s, dropping from over 70 percent to less than 25 percent. What happened? Personal income tax revenues increased substantially during the 1920s, despite the reduction in rates. Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent.



    According to then-Treasury Secretary Andrew Mellon:
    The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people.

    The Kennedy tax cuts
    President Hoover dramatically increased tax rates in the 1930s and President Roosevelt compounded the damage by pushing marginal tax rates to more than 90 percent. Recognizing that high tax rates were hindering the economy, President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation).



    According to President John F. Kennedy:
    Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.

    The Reagan tax cuts
    Thanks to "bracket creep," the inflation of the 1970s pushed millions of taxpayers into higher tax brackets even though their inflation-adjusted incomes were not rising. To help offset this tax increase and also to improve incentives to work, save, and invest, President Reagan proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).



    According to then-U.S. Representative Jack Kemp (R-NY), one of the chief architects of the Reagan tax cuts:
    At some point, additional taxes so discourage the activity being taxed, such as working or investing, that they yield less revenue rather than more. There are, after all, two rates that yield the same amount of revenue: high tax rates on low production, or low rates on high production.

    I know, I know, it is unfair of me to confuse you with facts.
     
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