Originally Posted by Bryant Platt:
Mr. Cornyn's argument is irreconcilable with the facts.  He argues that by reducing taxes one reduces the size of government, however as we see the tax rate has generally gone down for the last couple decades, yet the government was grown under both parties.  The rate of taxes seems more directly related to the size of the debt than the size of government.  He also makes the assumption that the smaller a government the more rational it will become, however I don't see any logical basis for this.

As for the statement that only the top %53 pay taxes, as I payed several thousand to taxes last year either the statement is false or the state of the American economy is much worse than I ever imagines (I had a fairly meager income).

Originally Posted by Bryant Platt:
The rate of taxes seems more directly related to the size of the debt than the size of government.

Originally Posted by Bryant Platt:
Mr. Cornyn's argument is irreconcilable with the facts.  He argues that by reducing taxes one reduces the size of government,

Originally Posted by Kieran Colfer:

Originally Posted by Bryant Platt:
Mr. Cornyn's argument is irreconcilable with the facts.  He argues that by reducing taxes one reduces the size of government,

Well, not really, what he says is that you don't reduce government by raising taxes, the reverse (reducing taxes increases government) isn't mentioned, and doesn't necessarily make sense anyway. Reducing taxes lowers the government revenue which forces them to either (a) cut spending or (b) run a bigger deficit. These days, a) isn't a given as no-one will agree on where to cut them or how much.

To me, cutting taxes and cutting spending at the same time is a stupid idea, you do it wrong (which they will) and they cancel each other out and you just end up where you started money-wise.

Originally Posted by Dødherre Mørktre:

Originally Posted by Bryant Platt:
Mr. Cornyn's argument is irreconcilable with the facts.  He argues that by reducing taxes one reduces the size of government, however as we see the tax rate has generally gone down for the last couple decades, yet the government was grown under both parties.  The rate of taxes seems more directly related to the size of the debt than the size of government.  He also makes the assumption that the smaller a government the more rational it will become, however I don't see any logical basis for this.

As for the statement that only the top %53 pay taxes, as I payed several thousand to taxes last year either the statement is false or the state of the American economy is much worse than I ever imagines (I had a fairly meager income).

47% of americans don't pay federal income taxes, because their returns offset what they paid in.


In 2009, roughly 47% of households, or 71 million, will not owe any federal income tax, according to estimates by the nonpartisan Tax Policy Center.

http://money.cnn.com/2009/09/30/pf/taxes/who_pays_taxes/index.htm

Originally Posted by Dødherre Mørktre:

Originally Posted by Bryant Platt:
The rate of taxes seems more directly related to the size of the debt than the size of government.

i don't see how you can separate the two. the size of the debt is a direct correlation to the size and cost of the government. the bigger the government, the more it costs to operate, and the greater the debt.

and while tax rates may be low, we clearly don't have a revenue problem, we have a spending problem.



How does revenue/spending normalize against population growth and inflation?  Something from the Heritage Foundations rallying against government spending seems so insincere.

Originally Posted by Dødherre Mørktre:
and i would have to ask miles, what DOES force less spending and less government? because that's what we need. more revenues? do you think that since we borrow 40 cents of every dollar the government spends, that the government needs to increase its revenues by 40%, and how would that affect this stagnant economy of ours? i mean if less revenues doesn't force less spending, what will? anything?

Originally Posted by Kieran Colfer:

Originally Posted by Dødherre Mørktre:
and i would have to ask miles, what DOES force less spending and less government? because that's what we need. more revenues? do you think that since we borrow 40 cents of every dollar the government spends, that the government needs to increase its revenues by 40%, and how would that affect this stagnant economy of ours? i mean if less revenues doesn't force less spending, what will? anything?

I never said that cutting taxes wouldn't force spending cuts, I said that it wasn't a given. You seem to be looking at it though the prism of "smaller government, smaller government" which is a good and laudable aim but is not the be-all and end-all, whereas I'm looking at it from the point of view of a country with a debt/GDP ratio of 99% which has to pay off €15 billion in loans over the next 4 years (which is pocket change to ye, but considering our govt's tax revenue for this year is forecast at €18bn....). So, if your only aim is to reduce the size of the government, then you can easily cut taxes to force spending cuts. If your aim is to drop the deficit however, then cutting the tax take by $100bn and reducing spending by $100bn gives you a net deficit reduction of...zero.  

Originally Posted by Dødherre Mørktre:

Originally Posted by Kieran Colfer:

Well, you can have both, you just have to make sure the difference between the savings made by the spending cuts and the reduced revenue caused by the tax cuts is a positive one, and use that to pay off the debt.

well, miles, i don't agree that tax cuts necessarily equals less revenues.

"First, back in the 1920s, Treasury Secretary Andrew Mellon pushed Congress to enact a series of tax cuts. The U.S. dropped the top marginal income-tax rate from 73 percent to 25 percent. Tax receipts from the wealthiest Americans rose. According to Treasury data, income taxes paid by Americans making more than $100,000 per year increased from $302 million to $714 million between 1922 and 1928, with the rich's share of income taxes paid rising from 35 to 61 percent.

Second, Kennedy-era income tax cuts brought the top marginal rate from an eye-watering 91 percent down to a still-eye-watering 70 percent in 1964. The wealthiest earners paid more tax after the tax cut, some say, even though the rate dropped 21 percentage points. An analysis by Laffer showed, for instance, that in 1965 people making more than $100,000 a year paid $3.76 billion in taxes, versus the $2.1 billion forecast under the higher rate. A few economists say that Ronald Reagan's income-tax cuts, which dropped the top bracket's rate to 50 percent, had a similar effect. Berkeley economist Brad DeLong, for instance, writes, "Arthur Laffer is probably right at the top end: reducing the top tax rate from 70 percent to 50 percent is probably a revenue gainer and surely not much of a loser."

Third, we look abroad. In the 1990s, Ireland's parliament enacted legislation that took certain corporate income tax rates down to 12.5 percent, one of the lowest rates on earth. Receipts climbed. The country, in its "Celtic Tiger" boom period, rapidly became richer. Corporate tax revenues jumped from less than 2 percent of GDP to more than 3 percent of GDP.

In all three cases, the tax cuts likely helped to increase tax receipts. How do lower taxes raise the amount the government takes in? Three answers are commonly given. First, tax cuts encourage businesses and individuals to be more honest about their earnings. Rather than hiding income, taxpayers just fess up and pay their share. Second, lower taxes encourage businesses and individuals to move money from lower-productivity, tax-free investments and shelters to more productive, taxable investments. Third, most importantly, perhaps, tax cuts goose growth. The government might be taking a smaller piece of the pie, but the tax cuts make the pie bigger. (In Ireland's case, of course, there's a fourth: The country became a kind of tax haven.)

The problem, according to most economists, is that Republicans now apply that dogma to all taxes, in all situations.

Monetary policy, government spending, and the business cycle also have a major impact."

http://www.slate.com/id/2297513/

so i would say that we need to spread the tax burden out a bit. sure, the rich should pay the greatest percentage, but this is already the case. you could confiscate all of the wealth of the top income earners, and still not pay off the debt or finance the government. and these are the people who actually create wealth in our economy. the government has already figured out that you can't tax the wealthy enough, which is why many liberals are looking at a VAT tax on top of the income taxes, which i think is a bad idea.

this is why i think we need to go to either a consumption tax, or a flat tax. since the wealthy have more money, they buy more stuff, which means they would still pay more into the system than those who aren't wealthy. a flat tax (meaning that everyone pays the same percentage) would also mean that the wealthy would overall put a greater amount into the system, but it also taps into the lower and middle class. i mean no one wants to say you're taxing the lower and middle classes more, but when half the country doesn't pay into the system at all, something has to change.

Problem is, you'd need a few things first:

1) Two parties who are actually serious about reining in spending and reducing the deficit, instead of just paying it lip-service  to score cheap points off the other side to give them an advantage in the next election (the tea partiers may be serious about shrinking government, but you really think that govt would shrink if the republicans win in 2012?)

if the constituents of the republican party (and the tea party) continue to apply pressure, then yes. this is the main difference between the republicans and the democrats. the republicans actually have a base that's committed to this. more committed than our reps. but our politicians aren't going to lead us out of this. it just isn't in their nature. the people have to lead the politicians.

2) Two parties who agree to cut down on the overblown rhetoric and concentrate on the facts, and who also agree to not just look at things though their narrow ideological prisms and consider things that might be considered "heresy" to the faithful, such as "trickle down economics doesn't always work" and "it's ok for rich people to pay slightly less tax, so long as they pay it".

well, miles, i mean...who is it that uses scare tactics and rhetoric the most? i mean who's making commercials about republicans throwing granny off a cliff? who's misrepresenting the facts, claiming that the republicans want to get rid of social security and medicare (which i just recently saw in a commercial)?

i mean every time we get into an issue with budget cutting, it is the democrats who stand in the way. i mean it's just not in their DNA to cut spending. it goes against everything they believe in. the only kind of scare tactics used by the republicans in this regard, is them saying we're going to go belly up if we don't change things, which is true.

3) Preferably, a plan for the cuts drawn up by an external 3rd party to avoid the partisan battles. This plan should be equitable and fair to all, and should concentrate on removing the government bureaucratic bloat while leaving the front-line services that people actually use/rely on as intact as possible.  

similar to the president's own budget commission, which he ignored?

4) Politicians on all sides to realise and accept that the adjustments will be painful and may not very popular in their constituencies, but they have to avoid grandstanding and obstructionism just because it looks good at home.

never happen

5) An act of congress that states that ALL savings made by the plan go to cutting down the debt and don't get siphoned off somewhere else in earmarks/pork barrel spending/enronomic accounting etc.  

good idea


So what do you think the chances of all that happening are? ;-P