The US should RAISE taxes

[Daxx]

The US is largely in trouble for two reasons:

Firstly, your military spending is out of control beyond all reason. You were on the way to balancing the budget and stemming your national debt before you slashed taxes and went off to war (which you're still paying for and you will probably continue to do so for at least another decade). It currently accounts for 40% of global military spending, is six times larger than the next country (China), and is approximately equal to the military spending of the next 15 countries combined.

Secondly, your right wing seems to have this obsession with tax cuts for the super-rich and corporations. If you want  to get up in arms about people not paying their taxes, then you need to look at your major corporations and super-rich who pay very little actual tax due to loopholes, creative accounting and tax write-offs. Simply claiming that the top earners pay 50% of tax without context doesn't actually reflect any understanding about how progressive taxation systems in general or your tax system specifically works*, and ignores the fact that related to wealth distribution this means that the top 5% actually pay less tax on their wealth than the rest of the population. It might be because this is what I'm trained for, but this sort of deliberate misrepresentation irritates me massively (I guess it's the same problem physicists have with most sci-fi).

It's worth pointing out for historical context that a rate of 35% on the top bracket (marginal from ~$380,000+, if I am correct) is insanely low. Historically income taxes were much higher (90% for that top bracket during the 40s and 50s, for example, and 70+% all the way through until Reagan).

*Even if you earn $400,000/year, you do not actually pay 35% of that in tax, because the tiered tax system means that 35% is the marginal rate - earnings below the top bracket are taxed at the appropriate levels for that tier, meaning that the majority of their reported earnings are taxed at a lower rate.
This image reflects the actual proportion of peoples' incomes that are taxed at any given level.
[/image]

[Essence]

^^  Pointed at for truth.

[nerd1]

agreed. we are already so much in dept, the idiot baby boomers who caused all of this should all have facebook profiles that say "totalitarian, corrupted, dictator."

[WrekX]

Google Ron Paul.
He has some simple but excellent ideas.
1. Reduce the size of government
2. Less taxes, as cost of operating government is less
3. Less government interference, and let the free market sort itself out.
4. Less meddling in other country's squabbles, and mind your own business. The American military expense is bleeding taxpayers dry.

Quite an eyeopener.

That guy is likely a total scam artists politician.
1) I highly doubt he will reduce government size. (If he dose it's to increase control)
2) Is clearly a ploy to get lower tax sentiment. It's so believable though because of 1. What a great politician.
3) Terrible idea. Hidden behind another ploy/suggestion that less government interfence is good. This is going to help big buisiness... so will lower taxes by the way. This guy must be a republican.
4) http://www.cdi.org/issues/milspend.html That is a list of military spending for the usa from 1945 to 1996. http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures

So, maybe we can't blame our poor economy entirely on the war. Maybe it's just a normal economic down turn. Seriously. Consider how much the media thrives off hype and how ill informed most the population is. 4 sounds like just another political ploy to play off all the media hype.

I wonder why no politicians mention the "all out war" on drugs we've been losing. Seriously. That's just an example because there are more drug users now than when the war started and we are spending more and more on it. Basically, because politicians have to do what the media wants them to or they don't win. Beware of this and if your not fully informed please don't vote. Not voting is a good thing. The media want's the average person to vote and will say everyone "should" vote but they only say this because they can control and utterly influence the average person.


Anyways, I'm not an economics major and probably don't deserve an opinion on rather or not to raise taxes. Economics isn't a subject that is as common sense as politics. I'm kinda weird like that. My best guess though would be to raise taxes because Ron Paul wants to lower them.

[BluePriest]

Google Ron Paul.
He has some simple but excellent ideas.
1. Reduce the size of government
2. Less taxes, as cost of operating government is less
3. Less government interference, and let the free market sort itself out.
4. Less meddling in other country's squabbles, and mind your own business. The American military expense is bleeding taxpayers dry.

Quite an eyeopener.

That guy is likely a total scam artists politician.
1) I highly doubt he will reduce government size. (If he dose it's to increase control)
2) Is clearly a ploy to get lower tax sentiment. It's so believable though because of 1. What a great politician.
3) Terrible idea. Hidden behind another ploy/suggestion that less government interfence is good. This is going to help big buisiness... so will lower taxes by the way. This guy must be a republican.
4) http://www.cdi.org/issues/milspend.html That is a list of military spending for the usa from 1945 to 1996. http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures

So, maybe we can't blame our poor economy entirely on the war. Maybe it's just a normal economic down turn. Seriously. Consider how much the media thrives off hype and how ill informed most the population is. 4 sounds like just another political ploy to play off all the media hype.

I wonder why no politicians mention the "all out war" on drugs we've been losing. Seriously. That's just an example because there are more drug users now than when the war started and we are spending more and more on it. Basically, because politicians have to do what the media wants them to or they don't win. Beware of this and if your not fully informed please don't vote. Not voting is a good thing. The media want's the average person to vote and will say everyone "should" vote but they only say this because they can control and utterly influence the average person.


Anyways, I'm not an economics major and probably don't deserve an opinion on rather or not to raise taxes. Economics isn't a subject that is as common sense as politics. I'm kinda weird like that. My best guess though would be to raise taxes because Ron Paul wants to lower them.

Facts. Thats what you are missing. Instead of just saying you dont trust someone because they are a politician actually give facts.

[WrekX]

@BluePriest   ^^^^^^^^^

Explain what facts I'm missing. Your going to have to be specific.

I don't think our military spending is out of control btw. You can agree that we are hemoraging money without facts yet you ask for facts as soon as you disagree with anything. Still I offered facts on the military budget.

http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures. 40% of global spending? How much of global GDP do we have, 33.3%?! Quit picking and choosing numbers. Our budget isn't as high as it seems. You forget we are America, the powerhouse of the world and we have the budget for what we are spending. You can't blame an economic slump on the military. Economies have down turns and it's normal. People are always looking to place blame on something, anything and any politician that is anti-war is exactly that, a politician apealling to the blame seekers.

If you carefully analyze Ron Pauls points, you don't have to be an economy major to tell they are carefuly selected to appeal to the ill-informed blame seekers. People hate the government when the economy is bad, so less goverment, less government interference, and the coup de grace? Less military budget when there is a ton of anti-military sentiment. Sounds like a winning "political" powerhouse. Emphasizing the bad on "political."

Anyways, I have "better" facts and links, which will be listed again below on the military budget and can prove it's not the military budget that's bleeding tax payers dry. It show's that though our spending is high, it's not extravagent when you compare how strong the American economy really still is compared to other countries. Guys and Gals, our economy is still huge.


http://www.cdi.org/issues/milspend.html
http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures

Now I gave you a little taste, and you can dish it out, but can you take it? How about you explain exactly how less goverment interference in the market is going to help the economy? Convince me that Ron Paul isn't exploiting the fact that people tend to dislike the government during economic downturns and using it to gain sentiment. Show me your not one of the ill-informed that forgets economic down turns are normal. Or is your Republican attitude too good to put two sides to this debate?

[Daxx]

I don't think our military spending is out of control btw. You can agree that we are hemoraging money without facts yet you ask for facts as soon as you disagree with anything. Still I offered facts on the military budget.

http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures. 40% of global spending? How much of global GDP do we have, 33.3%?! Quit picking and choosing numbers. Our budget isn't as high as it seems.

This is almost insultingly ignorant. Do you genuinely believe this to be the case, or are you just misinformed?

Not only have you just highlighted how disproportionate your spend is compared to GDP (and you even managed to do so inaccurately, since your GDP is actually closer to 20% of the world's GDP - making the disparity even more obvious), it's worth further emphasising that spend by GDP actually is not a good measure for you since it can be considered to overstate the amount that is relatively necessary. You should also be looking at spend per capita, where you are second only to the UAE and spend nearly twice as much as the next western nation (Norway). For comparison, your spending per capita is approximately 2.5 times that of the UK, 4 times that of Germany, and thirty times that of China. Your military spending eclipses that of the rest of the world not only in absolute terms but also in proportion. This is an unavoidable fact which is demonstrated by the figures you have just presented.

Not only that, but since your political climate does not allow for reductions in military spending, this disproportionate spend which has dragged you into a budget crisis will not end any time soon (NB. there is a very significant difference between a recession and a budget deficit; please learn it).

[WrekX]

Ah, your right, I can admit when I'm wrong. Our GDP isn't 33.3% is 20%.

Hopefully we can find common ground now. I'll use your numbers now that you've supplied information about our economy and not just our spending.

First, I think we should focus on the 60 billion we spend on our prison system. Or how about the 15 billion we spend on our "war against drugs" which is really a war against the black man. There has been proof the CIA was selling cocaine to black neighborhoods. So let me sum this up, our government declared war on drugs, then sold coke to black men and put them in jail for it. There is video evidence, people on camera admiting this. This is a severe internal problem and has been a needless drain on our economy much longer than the war.

Honestly the correct course of action would be to legalize drugs and force all the drugs dealers out of buisiness since the war against drugs has clearly done nothing but raise the cost of narcotics for the consumers. Prohibition has NEVER worked and countries that have non-enforcement policies don't suffer a nation of crashing meth zombies like everyones afraid of. Take the money out of the bad guys hand, use it to educate and rehibilitate. Keep in mind I'm not a drug user either. Oh and this will certaintly save a lot of money for the prison system because 20% of our prison population is non-violent drug offenders. Oh and let's keep in mind there are plenty of rehabilitation centers that have near an 80% success rate. That just cut spending 27 billion.

Then how about we create jobs, "how do we create jobs?" you ask? We supply nationd wide healthcare reform. More people going to the hospital, more hospitals needed, more people needed to staff them. There is money for this btw, you tax the rich guy/company/coorporation. The government is paying 2 trillion+ a year in healthcare. So why is this the rich mans problem? Well, there are those who view is this, the cheaper we make it for big buisiness to operate the more big buisiness will want operate and the more jobs there will be. But big buisiness isn't giving health care. It's keeping it's employees in the federal poverty range so they can get american health care and America is spending over $7000 dollars per person a year for healthcare. So I say this, if big buisiness is a friend, with friends like that who needs enemies. I would also like to say America spends more and more for healthcare every year. The % of GDP spent on health care has nearly trippled in the last 50 years. I totally understand this suggestion can increase the cost of goods and lower competitiveness.. but it won't. Why? Because major companies already make trillions of dollars. If they want to keep it that way, they will stay competitve and just take the hit.



So you can't say that this war is the sole reason our government is having budget problems. Do I believe we should be in the middle east, no. But that's different than believing we should leave or not or decrease spending.

Using the numbers you provided you could say we are roughly spending double (% wise) of the average country. However, the average country isn't militarized, many are withdrawing. I still don't think that's an insane amount and I offer plenty examples of other areas America has failed economicaly.

I also don't deny that we can not win. We are however one major terrorist attack away from public sentiment changing and America has already seen the worst of the "terrorist" attacks. I don't consider them terrorism personaly because we actually picked this fight. But that's exactly my point. We picked this fight. If we leave, is it just our side that's finished? I think we should stay commited until America is safe. How many people ask, "is it safe to come home?" All I hear is economics this and that. The only question most ask is "how much will America save?" Who asks "how much dose America stand to lose?" I do. Think of this from a military strategy point of view for two seconds. Appearently we have freezed some al kaida assets. We haven't seen any terrorism lately, a little anthrax a few months ago but nothing too major since we've been on the hunt for al kaida. I honestly think it's not a question of "if" but of "how long?" All there needs is some reorganization, planning, and funding and America is right back being attacked and this could easily happen if we don't keep our finger pressed down on the region.

I know, it hurt's my head too because I don't see a peaceful end to this situation. But this is more realistic than the typical, foolish American point of view that if we leave everyone will be happy. I'm sorry, but we've killed, we've died, but we've killed. So, I say our military budget is fine where it is and if your so narrow sighted you sincerely think our deficit is entirely from the war you've missed a lot of other internal issue and you clearly are in la la land if you think we're safe and can't provide some evidence it's safe to leave. By the way I would love to see that evidence because I would love for the war to end. I really would. Until it's proven safe to leave, leaving not only proves America is ignorant, but that we are really just that Arrogant to suggest the war is over because we want it to.

Thus, I state my view that the military budget isn't too high. I give other areas we can save in instead. I get into why I don't trust any politician that wants to bring troops home. I think I also get into why I don't trust politicians who want to lower taxes as well just not as directly. After all these are the points that started this debate. Feel free to check the rest of my numbers. Sorry for the length.

[Belthus]

The deficit is not a problem at this time. Core inflation is low, and commodity price increases are unrelated. Raising taxes at this time would contract the economy. Reducing unemployment should be the top priority.

At some point, taxes should be revised (in order to keep inflation in line, not to balance the budget). The wealthy and corporations should pay more, and the middle class should pay less. A progressive tax system acts as an automatic stabilizer, taking more money out of the economy when inflation is heating up and taking less out during recessions.

[Essence]

The deficit is not a problem?  Then why is it the only thing that half of the country is talking about right now?

Furthermore, please provide evidence that raising taxes would contract the economy, because comparing the marginal tax rate with the growth rate over the last 40 years shows a pretty clear correlation between HIGH tax rates and high growth rates.


Also, we have long, long past the point of diminishing returns on military spending.  In my completely unreliable off-the-cuff opinion, we could easily halve our spending without having any real effect on our ability to be the world's police.  Daxx is spot-on.

[BluePriest]

I dont think we need to raise taxes. I just think we need to fix loopholes. We can raise all the taxes we want, but as long as there are so many loopholes, then we will always have this problem.

[Belthus]

The deficit is not a problem?  Then why is it the only thing that half of the country is talking about right now?

It's not a popularity contest. The deficit is being talked about because various political factions are using it as an excuse to cut those parts of the government they don't like. They don't really care about the deficit, as the Ryan plan shows clearly, but even if they were real deficit hawks, it's still a bad idea to balance budgets when unemployment is high and growth is fragile.

Furthermore, please provide evidence that raising taxes would contract the economy, because comparing the marginal tax rate with the growth rate over the last 40 years shows a pretty clear correlation between HIGH tax rates and high growth rates.

It's Econ 101. See the Great Depression, especially the recession of 1937-38. After some success in turning the economy around, FDR was convinced by advisers to balance the budget. The problem, then as now, was that aggregate demand had fallen after a financial crisis. There was a flight of money to safety and liquidity because the private sector was afraid to take risks. Interest rates were very low, yet no one wanted to borrow. Monetary policy had no traction because of the zero lower bound. Under those circumstances, the only fast way out of the slump was government spending. Even the New Deal spending was not as vigorous as it could have been. It was WW2 and the tremendous deficit spending that really got the US out of the doldrums.

Also, we have long, long past the point of diminishing returns on military spending.  In my completely unreliable off-the-cuff opinion, we could easily halve our spending without having any real effect on our ability to be the world's police.  Daxx is spot-on.

I think we spend too much on the military too. But that has to do with composition of the budget, not the bottom line. Cutting net government spending (spending - revenue) when resources are underutilized (unemployment, factories idle, etc.) is cutting GDP because the private sector will not take up the slack until after demand for their goods and services picks up.

P.S. If you want to know where I am coming from, what I said above is pretty much standard New Keynesian analysis. Paul Krugman is probably the most accessible proponent. I also like what Modern Monetary Theory has to say on the subject. See this article (http://cas.umkc.edu/econ/economics/faculty/wray/papers/ELR.IRRA.01.htm) for a simple MMT explanation of how government finance works.