When you're trying to learn, ask questions

[henryclay]

I am trying to learn, so I am asking a question. A three part question really. And even though it's hard to understand, some people have said there is no such thing as a dumb question , , , , when you're trying to learn.

My question is on whether the government should cut spending or raise taxes, or solve the problem a different way. It's obvious that the either tax collections are not enough to suit the government, or spending is too much to suit the public.

One thought is for the government to revisit, (cut), programs that are overly expensive or raise taxes to cover their costs. Gaining in popularity seems to be the idea that if taxes are raised it won't be necessary to cut spending.

So I thought it's time to ask a cross section of the American public, (the posters on this board, anyway), what they thought, and that is my three part question. . . . .

Part 1: Would you rather have your taxes raised, or would you rather the government cut spending?

Pat 2; Would you rather have the taxes raised on the rich and no cuts in government spending.

Part 3: Would you rather apply a different solution to the government's income/outflow practice, and if so can you explain your recommendation?

[Savoir Faire-Demogague in NJ]

Part 1: Would you rather have your taxes raised, or would you rather the government cut spending?
I am 56 and have thoughts of retirement and collecting SS benefits. I am 100% for extending out full retirement age based on some formula. If six months were added to my full retirement date, it will not kill me...add nine months. 100s of billions would be saved.

Pat 2; Would you rather have the taxes raised on the rich and no cuts in government spending.
There is not enough income going to the wealthy that would make so much of a minute dent in the budget gap. 100% confiscation of all net worth held by the wealthy would barely close the budget gap for a single year, perhaps two years. What do you do after that?

Part 3: Would you rather apply a different solution to the government's income/outflow practice, and if so can you explain your recommendation?
Next election, vote for who ever is not in office.

[mmhmm]

Personally, Henry, I don't see it as a choice between one, or the other. I see it as a need for both. We're in deep defecation here. When such an event faces one in one's daily life, one buckles down, cuts expenses and increases income. That's what has to be done in order to bring things back from the brink.

Now, I'm not about to claim to be the be-all, end-all of how to run a country. I'm just a plain ol' citizen doing the best I can. I don't know everything as many do. I just know what I have done when faced with financial difficulties. If you've got more money coming in than you had when the "end" was looming, and less money going out than at that time, you're going to come out of it if you persevere. It's simple, as I see it. It's not fun, to be sure. Cutting expenses is never fun, and raising income is never easy. Still, if you want to recover, that's what you're going to have to do.

[floridayankee]

May 26, 2011 14:57:36 GMT -5 henryclay said:

I am trying to learn, so I am asking a question. A three part question really. And even though it's hard to understand, some people have said there is no such thing as a dumb question , , , , when you're trying to learn.

My dad always had a sign on his desk....

Stupid questions are easier than stupid mistakes.

As for the solution to balancing the budget, it has to come from government spending part. Looking at these charts, tax revenue has held fairly steady (despite various tax rates over the years) as a percentage of GDP while government spending has gone out of control.

Total US Tax Revenue as a Percentage of GDP:



Spending 20-25% of GDP is simply not sustainable when you're only collecting 15-20% of GDP in revenue.

[Savoir Faire-Demogague in NJ]

Using percentages can be misleading. From roughly 2004 through about 2007, tax revenues were at historic levels.
During the early 2000s(2001-2008), entitlement and social service spending was growing at 8-9% annually all mandated by legislation enacted in the 90s.

[billisonboard]

May 26, 2011 15:31:13 GMT -5 Savoir Faire-Demogague in NJ said:

Using percentages can be misleading. ...During the early 2000s(2001-2008), entitlement and social service spending was growing at 8-9% ...

[Politically_Incorrect12]

Just taxing the "rich" without spending cuts isn't really a viable option.

[mmhmm]

May 26, 2011 22:21:45 GMT -5 Politically_Incorrect12 said:

Just taxing the "rich" without spending cuts isn't really a viable option.

Agreed, Politically incorrect. Taxing without spending cuts is as useless as spending cuts without tax increases. Both are needed at this point.

[mwcpa]

In my opinion, we need both.... proper tax "increases" and proper spending "cuts".... but what is the right mix, that is the $64,000 question, or 64 billion+

on the spending side the problem though is we have members of Congress who say let's cut spending, just not in my district or from my lobbyist groups.... (by mere example only how many "bridges to nowhere" do we have, how much does a hammer cost)....

on the taxing side the problem is we have too many social engineering, and special interest loopholes in the tax law (47%+/- pay zero income tax)....

[privateinvestor]

One thing missing from this discussion is the Washington DC Lobbyists who can dictate to congress with their megabucks what spending and taxes they want for their constituents. Those of us who don't have this enormous power in Washington DC can only use our voting power since we don't have megabucks to influence spending or taxes..

Sadly there is a large majority of young voters who don't vote because they are turned off with Washington DC politics and I suspect that may ring true for some of us older voters as well. Voters are about to give up any hope for our elected office holders who have ruined this country....IMHO.

BTW hope you all have a safe and sane Memorial Weekend and keep those in "Harms Way" in your thoughts as well as those who gave their all in our wars.....


P.I. (Not Politically Incorrect)

[floridayankee]

May 26, 2011 15:31:13 GMT -5 Savoir Faire-Demogague in NJ said:

Using percentages can be misleading.

Yes, percentages can be misleading, but I don't believe this is the case here. Looking at both spending and revenue as a percentage of GDP is an apples to apples comparison. Seeing how revenues have pretty much held between 15 and 20% of GDP for the last 50 or so years, one could assume that if GDP is growing, we could (eventually) achieve a balanced budget with a Fed spending freeze at current levels and the resulting increased tax revenue.

Yes, I admit...I'm oversimplifying here.

[Savoir Faire-Demogague in NJ]

Yes, percentages can be misleading, but I don't believe this is the case here.

Well, immediately after the 2003 tax cuts, revenue to the fed treasury soared to historic levels. Using percentages, you cannot see that.

Looking at the revenue chart again it does indicate increasing revenue, but fails to illustrate the magnitude.

[dancinmama]

I agree that it has to be a combination of both decreased spending and raised revenue. The spending has gotten totally out of control.

Yes, I realize that this administration had a big problem to deal with 2 1/2 years ago, but all I can see is that megabucks were spent to pump up the economy and economically it does not seem to me that we got a lot of bang for our buck. As a matter of fact, it appear from recent reports that there is a strong possibility that we're headed toward a double dip recession.

In the meantime, millions of people in this country paid no income taxes. As a matter of fact, millions more got a tax credit for working that they had never received before and were used to not getting. Sure the money helped everyone from those who used it to pay everyday bills to those who put it toward retirement savings, but it was a HUGE chunk of change - another government handout that did very little to "stimulate the economy".

This year, we are all getting a break on payroll taxes for social security - SOCIAL SECURITY TAXES - the exact same area that Washington has been telling us for years is going broke. Now that makes A LOT of sense. Now, 47% of the population will not pay any income taxes AND are paying greatly reduced social security taxes. And what are those people going to do next year or the year after when they get a 2% decrease in take home pay because their payroll taxes go back up? How many millions of people do not even know WHY their checks went up this year and that they are going to go back down?

The GOVERNMENT has created these HUGE problems and it has become painfully clear to me that the members of Congress cannot put on their big girl and boy panties to do what it takes both in terms of spending cuts and taxes to get the job done.

The debt clock is ticking.

[Angel!]

Raise taxes on everyone & cut spending. I don't think anything else will solve this problem.

[henryclay]

Raise taxes on everyone & cut spending. I don't think anything else will solve this problem.

Angel D It looks as if you have accepted option 1 and settled on option 3 from the OP. It is one of the few realistic projections made so far in the thread.

Can you flesh it out and expand on who is the "everyone" who will have their taxes increased, (considering that close to 50 percent of American workers are currentkly not paying any taxes, and many of them actually get a reverse income tax, in the form of a refund that is nothing but a redistribution of other people's taxes), and where should the spending cuts begin?

[hello fromWarsaw]

Raise taxes on the rich and vote Dem so health reform cuts spending. Basically, vote Dem.

[hello fromWarsaw]

"50 percent of American workers are currently not paying any taxes"
False. Payroll taxes and other taxes get the poor into the same tax rate as anyone else. And no, I'm not giving the link AGAIN...

[henryclay]

vote Dem so health reform cuts spending

We are already seeing the effect of Obama's health care reform. Insurance rates are rising everywhere to cover the increased costs of health care. When do the cuts in the cost of health care start?

Forgive me if I say I think the answer has someting to do with the cost of health care will have to go up on some people so they can contribute to the cost of health care for the people who don't have any coverage. And that this is just a simple fact of providing for those who can't provide for themselves.

[Angel!]

Sure, I will expand on that. First, I just want to clarify 50% of people pay no Federal Income Taxes, only about 10% of the populations pays absolutely no federal taxes.

I don't have data right now, so I am just going to make broad generalization. But, I think you raise everyone's taxes other than those living close or below poverty. Cutting the child tax credit in half would be a huge start, as would getting rid of the mortgage interest deduction. Then raising the tax rate for all but the lowest bracket by a few percent. I don't want anything massive, but I believe just doing it for those over 250K won't have enough of an impact.

One of the reasons I feel this way - last year I made ~55K, my federal income tax liability was -$650. No, I didn't just get a refund of $650, my refund was actually over $3K, but it exceeded my withholdings by $650. I didn't do anything special that led to this, making mine a unique situation, it was just a combination of the child tax credit & making work pay. I think it is ridiculous that someone with a fairly middle class income has a negative tax liability. If I remember correctly Dark's income was ~100K & he paid $3K - a 3% liability. Not to pick on Dark, I just happened to remember that number. Families earning solid middle class incomes shouldn't have such low tax numbers. I enjoy not paying taxes, but it is not helping our country one bit.

[hello fromWarsaw]

Raise taxes on the non rich? I don't think so. Squeezed to ruin for 30 years of Voodoo...
The fact that people don't realize the cost controls of health reform is due to crappe corporate media...not to mention the Pub propaganda channel.