A gift from Laurie. The Week: American's Don't Pay Enough Taxes Now one must consider the perspective of the author. Paul Waldman
Now I assume he is using this information, which seems to only include Federal revenues and taxes. Because we know the Total Tax Bill is closer to 31% of GDP. Which we know is a BIG problem because our spend is ~36% of GDP. Because that 5% difference goes directly to the National Debt each year.
So I do agree whole heartedly that we are not paying enough taxes, but I disagree with his reasoning. I just think if we are rational responsible adults, we should be paying our bills and not shifting them to our children.
Note: When someone compares US revenue, spend, taxes, etc to other countries... Make sure to note that many of these countries are smaller than MN and they are national democracies with less in local, county and state taxes. One must compare apples with apples.
And it would be pretty easy for us to jump into the ~45% of GDP to/thru the government... We would probably be there if we went to a national healthcare system. And that is where the Liberal Progressives want to pull our boat for better or worse.
Now I assume he is using this information, which seems to only include Federal revenues and taxes. Because we know the Total Tax Bill is closer to 31% of GDP. Which we know is a BIG problem because our spend is ~36% of GDP. Because that 5% difference goes directly to the National Debt each year.
So I do agree whole heartedly that we are not paying enough taxes, but I disagree with his reasoning. I just think if we are rational responsible adults, we should be paying our bills and not shifting them to our children.
Note: When someone compares US revenue, spend, taxes, etc to other countries... Make sure to note that many of these countries are smaller than MN and they are national democracies with less in local, county and state taxes. One must compare apples with apples.
And it would be pretty easy for us to jump into the ~45% of GDP to/thru the government... We would probably be there if we went to a national healthcare system. And that is where the Liberal Progressives want to pull our boat for better or worse.
33 comments:
Maybe the problem is we spend too much.
--Hiram
I just think if we are rational responsible adults, we should be paying our bills and not shifting them to our children.
Why? Don't our children benefit from the expenses we shift to them? Don't they benefit from spending in the past? Did they pay for the schools that they attend, or the roads they used to get to them? Did they pay for the military that keeps them safe at night? What is the rationale exactly for giving the kids of today a free ride than no other kids in the history of the Republic have ever gotten?
==Hiram
Hiram,
It seems we have been here before... And as I said previously, leaving them bonds to pay off for infrastructure that is still usable is just fine.
Leaving them debt because today's citizens wanted more spending / programs today while paying less in taxes today is irresponsible and selfish.
And please note that we are on track to leave much more debt to our kids than at any time in the past. The only time even close was right after WWII, which a definite outlier.
Hiram nails it! but let me try bringing the question down to a personal level.
Let us assume that my wife likes nice things and enjoys shopping. And being a good citizen myself, we just had to buy that new hybrid vehicle to help save the planet. I count the golf club membership as either entertainment or a business expense, though my boss doesn't pay me for it, and I must admit we eat out a lot. We are getting further behind every month and we have a huge debt in our credit card balance.
now, the simple solution would be to go to my boss and tell him I have to have a 20% raise, right away, just to make ends meet. I am a bit afraid to do that though, because I know what he will say. He will tell me that he would like to give me that raise, but to do that he would have to cut back someplace in his operation, and the best place to start might be with ME. So I consulted with a financial advisor who told me to 1) cut up my credit cards, and pay cash for everything, and 2) to cut back to only what you can afford, and then cut back some more so that you can pay down that credit card balance. There is no other way and you don't have to like it. Live within your means.
Leaving them debt because today's citizens wanted more spending / programs today while paying less in taxes today is irresponsible and selfish.
So is not providing them with schools. I won't deprive kids of an education just because Republicans can't get it together enough to pass a tax increase.
--Hiram
A lot of people voted for Trump because they want America to retreat from the role in the world we assumed after WW II. Europe isn't the shattered ruin it was in 1945, and it's time they took care of themselves. They should be able to pay for their own defense, saving us the money so we wouldn't have to cut retirement and health care benefits. There is certainly a logic to that, but that's not ever what seems to happen in practice. The deep state has it's way in the end.
--Hiram
In household economic terms, think in terms of life cycles. When we are young we incur debt that we pay off as we get older. We have kids who are a loss in their early years, but pay off later as they enter the work force. It's all like "The Lion King".
--Hiram
Hiram,
I am curious... Do you have a child or children?
I am pretty certain Sean, Jerry and Laurie do... And that Moose does not... But you I just don't know.
Hiram, Republicans could go along with every wild and crazy increase in education spending proposed by the DFL and their masters the teachers unions, and it wouldn't make a dime's worth of difference to educational outcomes. And it hasn't.
Other than that, you are correct that one of the spending priority decisions we have to make is how much to finance the defense of other nations. I guess my point is that there are absolutely no spending priority decisions being made today. The budgeting process seems to be to add together all of the various wish lists and then spend that amount. Figure out how to (pretend to) pay for it if you are in Minnesota and have a balanced budget requirement, or don't worry about it if you are in the U.S. Congress.
From Minnpost Ryan Farewell
"I trust you don't mean to suggest that government spending is unimportant in an economy.
Saying that the "Left leaning view" supports government spending is an oversimplification that looks too hard for a balance with the Right leaning views. Conservatives (and correct me if I'm oversimplifying) regard government spending as inherently suspect. Spending and taxes should be low for the sake of being low. The predominant Left leaning view does not regard all government spending as inherently good, and does not favor high taxes or spending for their own sake. In other words, despite the caricature that circulates, there is no cabal of leftists cooking up ways to increase taxes, or trying to find ways to increase spending.
BTW, I've not read the Wikipedia entry on Keynesian economics, but did it not point out that high spending and deficits are counter-cyclical measures to be undertaken in a downturn? The time to balance the budget is during the good years." RB
"Speaking for Conservative is hard for me since the Right has been too foolish lately as I have noted.
The problem I have with much of the spending supported by the Left is that it involves transferring the negative consequences and risk from individuals to tax payers. Some examples:
- If parent(s) raise their kids poorly and the kids turn out delinquent and/or under educated. The Liberal view is that we should raise taxes on everyone to provide more welfare, police, prison, social services, Medicaid, etc
If a single Mom raising 2 kids on welfare gets pregnant again. The Liberal view is that we should raise taxes to give her more money every month to feed, house, care for, etc baby number 3. If she does it again... Just make the check bigger. Repeat...
- If people fail to learn, work, save, invest, etc for retirement... The Liberal view is that all of citizens should pay patrol taxes...
Now I think there is some excellent government spending: roads, bridges, education, job training, care for the truly disabled, national defense, law and order, etc...
However spending that removes the negative consequences from the individual who made errors and moving it to the shoulders of those who made good life choices seems counter productive.
I could make my daughters share their allowance when one does something foolish, but that would punish the 2 making the good decisions while minimizing the learning opportunity for the one that made a poor choice." G2A
Republicans could go along with every wild and crazy increase in education spending proposed by the DFL and their masters the teachers unions, and it wouldn't make a dime's worth of difference to educational outcomes. And it hasn't.
They do like to spend. It's just that their priorities are sometimes and by no means always, different. And in deficit terms, the wisest spending has the same impact as the stupidest. This the reality Republicans try to avoid, and we try to thrust on them.
--Hiram
Again, Hiram is correct, but that is why we supposedly elect these people, to separate the "wise" spending from the stupid. It can be said we have the most expensive education system in the world, so why do we not have the best educations? Stupid. We have spent roughly $50 Trillion on eliminating poverty, so why are there still poor people (with big screen TVs, AC and cars)? I think the difference, ideological rather than in the practical, is that Leftists want spending for its good intentions, and the Right prefers spending for good results-- always a smaller number. Remember the old adage, "There is no limit to the amount of good that can be done with somebody else's money."
And they want MORE?
50% now
Here is a point of view John will agree with. I am not completely convinced the parties are equally to blame for the budget deficits.
Deficit addiction is a bipartisan disease
The problem with the "both sides do it" argument is that nothing can CHANGE. Without strong political pressure, the stupidity prevails. If one "side" can point to the other, successfully blame them for the problem, promise to do better and WIN election thereby, change becomes possible.
Just an example: if a Balanced Budget Amendment came before Congress, every Republican supported it and every Democrat opposed, would public blame-casting shift?
Laurie,
Thank you !!! I think I am in love!!!
"Against that backdrop, it’s absurd to classify Democrats as fiscal conservatives. The main point of Leonhardt’s exercise is to cast blame for the budget stalemate on the Republicans. That’s a partisan conclusion. The reality is that the budget paralysis is a bipartisan failure. As a practical matter, there are few genuine fiscal conservatives, a label that implies a willingness both to cut spending and raise taxes. And that’s the truth — really."
Love aside, equating tax cuts and spending increases is a symptom of the poisonous thinking that prevents the problem from being solved. Remember Reagan's Great Bargain, where tax cuts would be matched by spending cuts? Unless you did, you couldn't find the evidence. Taxes were cut, the economy grew, but government spending increased more than that.
The Balance Did Reaganomics Work
Now doesn't the following quote seem sound familiar to what our idiots did today.
"That's according to William A. Niskanen, a founder of Reaganomics. Niskanen belonged to Reagan's Council of Economic Advisers from 1981 to 1985. Inflation was tamed, but it was thanks to monetary policy, not fiscal policy. Reagan's tax cuts did end the recession.
But government spending wasn't lowered, just shifted from domestic programs to defense.
The result? The federal debt almost tripled, from $997 billion in 1981 to $2.857 trillion in 1989.
And I like this point also...
"Reaganomics and supply-side economics can be explained by the Laffer Curve. Economist Arthur Laffer developed it in 1979. The curve showed how tax cuts could stimulate the economy to the point where the tax base expanded. It showed how Reaganomics could work.
Tax cuts reduce the federal budget immediately, and dollar-for-dollar. These same cuts have a multiplier effect on economic growth. Tax cuts put money in consumers' pockets, which they spend. That stimulates business growth and more hiring. The result? A larger tax base.
But the effect that tax cuts have depends on how fast the economy is growing when they are applied. It also depends on the types of taxes and how high they were before the cut. The Laffer Curve shows that cutting taxes only increases government revenue up to a point. Once taxes get low enough, cutting them will decrease revenue instead. Cuts worked during Reagan's presidency because the highest tax rate was 70 percent. They have a much weaker effect when tax rates are below 50 percent."
So, what do you take from this supposedly contradictory information? It should be that taxes went down but spending went up faster and therefore deficits increased. The simple lesson for today is that taxes are largely irrelevant to the deficit; it is spending that must be curtailed. Just as your salary does not determine your debt load, it is how much you spend.
Let's see if this link works better.
The Balance Reaganomics
Looking at the revenues drop in ~1981 and ~2002, I would say that both matter equally.
And that the voodoo economics theory is bunk. One simply does not increase revenues by cutting taxes on the wealthy.
To me the piece seems pretty consistent and correct...
" The Laffer Curve shows that cutting taxes only increases government revenue up to a point. Once taxes get low enough, cutting them will decrease revenue instead."
And now the GOP / Trump repeated the same stupidity again... Lower taxes & Increased Spending...
How can you defend their irresponsible choices?
"" The Laffer Curve shows that cutting taxes only increases government revenue up to a point."
And so you are going to claim that that tiny tax cut threw us "over the hump" of the Laffer curve? Somehow the booming economy would suggest otherwise.
Stupidity? How about Democrats insisting that spending increase before they would vote for tax cuts? The tax cuts alone could have passed if just a few Democrats had joined in, and the effect on deficits would be much smaller. Can we NOT try to apportion blame equally, or all on the Republicans, for a change?
Personally...
I blame the negative impact of the tax cuts on revenue 100% to the GOP.
I blame the negative impact of the spending increase 50/50.
So the GOP owns 75% of the problem and the DEMs own 25%.
Please remember that economy was "booming" long before the tax cut.
That is exactly why it was such a waste and so irresponsible.
Booming is 1.5% growth and a labor participation rate the lowest in 20 years?
And the spending was a 50/50 decision? How many Democrats, and how many Republicans, voted for the tax cuts WITHOUT the spending? How many WITH?
Oh please... Here are some facts and data for you. I do not see any big change yet.
Though with Trump approving the additional federal borrowing, spending and big tax cuts, one would expect a miracle sometime before things tank. I mean we are borrowing ~1 Trillion per year from our kids. :-(
As for vote counts, I am sure you can look them up. The GOP owns the majority of the blame/praise for whatever happens.
In a Senate where 48 votes are controlled by Democrats, 52 by Republicans and 60 Votes are required for cloture, blame should be allocated 52-48. That is a majority, but the question is what constitutes a WORKING majority, and what is the right side of the issue? Calling a tax cut a problem doesn't make it wrong, especially in light of the results for the economy. Calling spending a problem seems only sensible, so who voted for which? I don't think I need to look it up. Fiscal sanity is more or less an all-or-nothing arrangement, it can't be 50/50 or even 52/48.
As I said...
The GOP owns the majority of the blame/praise for whatever happens.
Well, you have a lot of far left media outlets that would agree with you. It is why I continue to advise Republicans that "the media is not going to like you whatever you do, so you might as well do what is right." Even here, they get all the blame and none of the credit. Democrats, on the other hand, get credit for good intentions alone, regardless of reality or of their nefarious progress-blocking.
Please note that no where do I apportion all or nothing...
"So the GOP owns 75% of the problem and the DEMs own 25%."
"The GOP owns the majority of the blame/praise for whatever happens."
As for bias... Media Bias Ratings
The GOP can stand in their echo chamber until they find themselves voted out of power I suppose. There is a big world beyond their perception of reality.
"I blame the negative impact of the tax cuts on revenue 100% to the GOP.
I blame the negative impact of the spending increase 50/50.
So the GOP owns 75% of the problem and the DEMs own 25%."
I can mostly agree with John's analysis. It is kind of boring to agree.
I promise to find something we can disagree on soon... :-)
By the way, you owe me an answer on the school funding post.
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