News Should the Bush tax cuts be extended?

Should the Bush tax cuts be extended?

  • Extend all of the Bush tax cuts permanently

    Votes: 16 45.7%
  • Extend some of the Bush tax cuts permanently

    Votes: 5 14.3%
  • Extend some of the Bush tax cuts temporarily

    Votes: 12 34.3%
  • Extend all of the Bush tax cuts temporarily

    Votes: 2 5.7%

  • Total voters
    35

Al68

Once again, SS is self-funded, and is not a drain on our budget.
LOL. Self-funded? The fact that it's funded from the "payroll tax" instead of the "personal income tax" makes it "self-funded"?

So if congress were to separate out taxes used to fund the military, and give them a separate name, we could call the military "self-funded"?
 

Gokul43201

Staff Emeritus
Science Advisor
Gold Member
6,987
14
It's possible that I misunderstand you, but that seems 'obviously' wrong.
No, I don't think you've misunderstood. In general, I hold that it is at least very hard to justify a more-or-less universal negative. An example of a universal negative is: there is no link between action A and entity B. In a system in which the elementary entities (people+wealth, in this case) interact in gazillions of different ways, it would take at least a little more than "it's obvious" to convince me of the absence of any link between different parts of the system.

The majority of the budget (51% as of 2008, you can check other years for comparison if you like) goes to social security, Medicare/Medicaid/CHIP/etc. (where "etc." refers to other 'safety net' programs like unemployment payments). How would these help the present rich to have gained their fortunes? (Not exactly sure what you mean by "rich", but something in the upper 50% surely, probably in the top 1%.)
Consider a rich (pick some suitable definition - I don't think that affects the argument significantly) person who owns a company that hires several non-rich people. The earning potential of the rich person is directly tied to the performance of the company, which depends on the welfare of the non-rich workers that help run it. And the welfare of these non-rich people is directly dependent on the programs mentioned above. Ergo, <blah>.
 

turbo

Gold Member
3,028
45
I've tried a few times to start discussions relating to that point here, but with little or no success. :devil:
CRG, I think that we can relate. Our country and our states (to more or lesser extents) provide an environment in which we can operate with some expectation of future stability. Is this worth nothing? People who get taxed on capital gains tax only (max 15%) and make millions of dollars a year shouldn't have to help pay for the system that provides them that security? I hope we can change things.
 

Gokul43201

Staff Emeritus
Science Advisor
Gold Member
6,987
14
People who get taxed on capital gains tax only (max 15%) and make millions of dollars a year shouldn't have to help pay for the system that provides them that security? I hope we can change things.
The implication here, I believe, is that they don't (help pay ...). Could you explain?
 
I just have to say, having been here from page 1, this has been one of the most surreal threads I've ever been a part of. The way in which different people are interpreting the same data, the differences in how figures such as Reagan are viewed (often the loved and hate stem from the same sources).

Above all I'm surprised that while the current trend of the discussion has been fairly open thanks to Gokul, often this degenerates into dogmatic and polarized camps.
 

Al68

People who get taxed on capital gains tax only (max 15%) and make millions of dollars a year shouldn't have to help pay for the system that provides them that security?
Again, nobody in this thread is advocating any such thing. And nobody on the planet that I'm aware of. Can you provide a source?
from closed thread said:
Goldwater wasn't a slave to monied interests. He was a pretty solid conservative with a wide libertarian streak. I don't think that McConnel or Boehner would accept him in their party today. They are neo-cons. He was not.
He was a "neo-con" according to the rest of the world, which is my point. The word neo-con is used by everyone else to describe the political philosophy epitomized by Goldwater. Or sometimes used to mean not far enough to the right to be considered a real conservative. Nobody else (as far as I can tell) uses it in a way that could describe McConnel and Boehner, but not Goldwater.

And is "slave to monied interests" a slur by forum rules? It's certainly about as "derogatory and insulting" as one can get. Regardless, such a statement has no place in honest debate, since it refers to motives.
 
Last edited by a moderator:

turbo

Gold Member
3,028
45
The implication here, I believe, is that they don't (help pay ...). Could you explain?
They pay 15% on the capital gains that they can't possibly exempt from taxation. The people who are subject to withholding have no such flexibility. We just pay.
 

mheslep

Gold Member
254
728
But the rich do benefit from the federal government's primary purpose, protecting our liberty, to a far greater extent than the poor, and they should pick up the tab for that. Nobody is arguing otherwise, which was my point.
I've tried a few times to start discussions relating to that point here, but with little or no success. :devil:
I certainly agree. This doesn't mean of course that the well off or anyone else for that matter are obliged to approve of spending without limit on defense, the FBI, Justice, etc.
 

CRGreathouse

Science Advisor
Homework Helper
2,817
0
CRG, I think that we can relate. Our country and our states (to more or lesser extents) provide an environment in which we can operate with some expectation of future stability. Is this worth nothing? People who get taxed on capital gains tax only (max 15%) and make millions of dollars a year shouldn't have to help pay for the system that provides them that security? I hope we can change things.
I don't think that any person should pay into the SS system, rich or poor.
 

turbo

Gold Member
3,028
45
I don't think that any person should pay into the SS system, rich or poor.
So you think that we should all just "opt out"? This could be a hazard to elderly people who are getting just enough money to stay out of poverty. Or do you think that SS checks are generous enough to keep the "welfare queens" in brand-new Cadillacs?

Forgive the tweak, please. SS was founded on the premise that the present workers would provide a modest income for present retirees. It was not considered welfare, and should not be used to paint its current recipients, either. This program can continue with only minor tweaks into perpetuity. SS cannot borrow money and cannot add to our deficit. How much repetition is required to get this accepted as a fact?
 

Al68

SS was founded on the premise that the present workers would provide a modest income for present retirees.
So is it safe to assume you have no problem with the term "involuntary pyramid scheme" being used to describe it then?
SS cannot borrow money and cannot add to our deficit.
That's true if considered separately from the rest of the budget, but in that case, it has its own surplus or deficit, so it's a completely semantical point. It's not a question of fact.
How much repetition is required to get this accepted as a fact?
What "fact" do you want accepted? That if you consider the SS system separately from the rest of the budget, its surplus or deficit is also separate from the rest of the budget. I think we got it the first time.
 
Last edited by a moderator:

CRGreathouse

Science Advisor
Homework Helper
2,817
0
What "fact" do you want accepted?
I think that the "'fact'" is that (when considered apart from the rest of the budget) SS cannot run a deficit, only a surplus. I haven't checked that; I simply assume that turbo-1 is correct in his assertion.
 

CRGreathouse

Science Advisor
Homework Helper
2,817
0
SS cannot borrow money and cannot add to our deficit. How much repetition is required to get this accepted as a fact?
That may be financially true, but it is economically false. At present the Social Security system holds a large number of US bonds and future obligations which will require more than 100% of expected contributions and all of the bonds. (Admittedly, the middle scenario [which I see as slightly optimistic] does not exceed 100% greatly.)

The US government is running a hefty deficit at the moment. In the future we will need to pay higher interest (presently about 10% of US government spending) because of this debt. Further, in addition to not being able to borrow from SS as we have in the past, we will need to repay the SS fund from last decade's borrowing.

Where will this money come from? Of course we won't have the money and it will be borrowed, adding to the debt.
 

Al68

I think that the "'fact'" is that (when considered apart from the rest of the budget) SS cannot run a deficit, only a surplus. I haven't checked that; I simply assume that turbo-1 is correct in his assertion.
No, it's not true that SS cannot run a deficit, and turbo-1 didn't imply that at all, it's just true that it doesn't run a deficit (yet) and therefore as a system, its revenues cover the cost of its expenditures. In fact, since SS runs a surplus that is used to buy treasury securities, it actually acts to reduce the general budget deficit in that regard.

And turbo-1 is correct that SS could continue indefinitely with "tweaking", and nobody disputes that that I'm aware of. Of course there is plenty of disagreement between and within each party about not only how to tweak it, but whether to make major changes, but a discussion of that would need a separate thread.
Further, in addition to not being able to borrow from SS as we have in the past, we will need to repay the SS fund from last decade's borrowing.

Where will this money come from? Of course we won't have the money and it will be borrowed, adding to the debt.
That last part isn't technically true, only because the funds owed to SS by the treasury are already included in the current national debt figure. It added to the debt in the past tense, since the money has already been spent, and the obligation to repay it is current federal debt.
 
Last edited by a moderator:
107
0
IMO - SS was intended to serve as a retirement trust - a safety net to supplement retirement savings. It has evolved into an unfunded entitlement program. I think the program needs to be reorganized with the retirement program managed separate and made a non-negotiable funding priority. The disability program is expanding out of control, often inconjunction with Medicaid, and needs to be managed as part of the budget - and subject to cuts and restrictions. The problem is further complicated as Medicaid is only partially funded by the FEDERAL Govt and the rest paid by individual states. The management of both disability and Medicaid might even be managed better in state hands with a percentage billed to Washington - keep national politics out of the decision making process - again, IMO.
 

OmCheeto

Gold Member
2,059
2,414
I just have to say, having been here from page 1, this has been one of the most surreal threads I've ever been a part of. The way in which different people are interpreting the same data, the differences in how figures such as Reagan are viewed (often the loved and hate stem from the same sources).

Above all I'm surprised that while the current trend of the discussion has been fairly open thanks to Gokul, often this degenerates into dogmatic and polarized camps.
Polarized? In the Politics forum? :wink:

I too have been here since page one. And it would require a book sized post to argue for or against most of assertions. It's been 25 hours since my last post("Notabunchofliars") and already there are 3 new pages. This is more chatty than chat.

But anyways, my point seems to have been appropriately expanded upon by others, so I'll throw something new out, which is derived from the http://www.cbo.gov/ftpdocs/88xx/doc8885/EffectiveTaxRates.shtml" provided earlier. And I do this because the numbers jumped out at me in one of those "OMG" kind of ways.


2005 Post Tax Wages (assuming a 2000 hour work year)

______________________yearly_____monthly___hourly
Lowest Quintile _____$15,300 _____$1,275 ______$7.65
Second Quintile _____$33,700 _____$2,808 _____$16.85
Middle Quintile _____$50,200 _____$4,183 _____$25.10
Fourth Quintile _____$70,300 _____$5,858 _____$35.15
Highest Quintile ___$172,200 ____$14,350 _____$86.10

All Quintiles _______$67,400 _____$5,617 _____$33.70

Top 10% ____________$246,300 ____$20,525 ____$123.15
Top 5% _____________$369,800 ____$30,817 ____$184.90
Top 1% ___________$1,071,500 ____$89,292 ____$535.75


Three questions:
1. How do 23.6 million households survive on $15,300 a year?
2. Am I really supposed to feel sorry for someone making $535.75 an hour take home?
3. Does asking the above two questions confirm that I'm a Marxist?:rolleyes:

ps. I did determine the effective tax rates for all of the quintiles and percents. Seems quite progressive to me. Just needs a bit of tweaking in my opinion. Maybe a 1/3 of 1% annual increase over the next 10 years. To balance the budget of course.

Lowest Quintile _______4%
Second Quintile ______11%
Middle Quintile ______17%
Fourth Quintile ______21%
Highest Quintile _____34%

All Quintiles ________26%

Top 10% ______________38%
Top 5% _______________41%
Top 1% _______________45%
 
Last edited by a moderator:

turbo

Gold Member
3,028
45
Stop talking sense, Om. You'll get banned from P&WA
 

CRGreathouse

Science Advisor
Homework Helper
2,817
0
That last part isn't technically true, only because the funds owed to SS by the treasury are already included in the current national debt figure. It added to the debt in the past tense, since the money has already been spent, and the obligation to repay it is current federal debt.
Quite right, my apologies for imprecision.
 

OmCheeto

Gold Member
2,059
2,414
Stop talking sense, Om. You'll get banned from P&WA
:bugeye:

Sorry!

And thank you for putting that "&" in there. I saw "PWA" earlier and couldn't figure out what it was:
"Peoples Workers Alliance?" Another Marxist comment?
"Pro-Wealth Assn?" A Libertarian think tank?

Anyways, in case anyone wonders where I came up with the 3 and 1/3 percent tax increase, it's from the https://www.physicsforums.com/showpost.php?p=2588911&postcount=246" thread post I made in February.

Actually, that graph is kind of telling. Let me regurgitate it:

http://www.cbo.gov/ftpdocs/110xx/doc11014/MainText_HseVersion.28.1.3.png

That's really impressive that government spending tended lower as a percent of gdp from 1984 through 2001, from 24 to 18%. Starting with 12 years of Reagan-Bush, then 8 years of Clinton. Almost makes it look like the government was shrinking. But that can't be right. Republicans and Democrats reducing spending?
 
Last edited by a moderator:

CRGreathouse

Science Advisor
Homework Helper
2,817
0
ps. I did determine the effective tax rates for all of the quintiles and percents. Seems quite progressive to me. Just needs a bit of tweaking in my opinion. Maybe a 1/3 of 1% annual increase over the next 10 years. To balance the budget of course.

Lowest Quintile _______4%
Second Quintile ______11%
Middle Quintile ______17%
Fourth Quintile ______21%
Highest Quintile _____34%

All Quintiles ________26%

Top 10% ______________38%
Top 5% _______________41%
Top 1% _______________45%
Those numbers are reasonably close to my understanding (though, to be honest, I didn't think the bottom quintile was paying *any* net tax -- are you including the EITC?

Personally I'd prefer to reduce the deficit by decreasing spending than raising taxes (cut spending until we have a meaningful surplus, run this for a number of years until the debt is largely erased, then cut taxes further). But I don't imagine that is politically feasible.
 

CRGreathouse

Science Advisor
Homework Helper
2,817
0
That's really impressive that government spending tended lower as a percent of gdp from 1984 through 2001, from 24 to 18%. Starting with 12 years of Reagan-Bush, then 8 years of Clinton. Almost makes it look like the government was shrinking. But that can't be right. Republicans and Democrats reducing spending?
Heh. I'd prefer to look at the parties controlling Congress, in which case it was Republicans and Democrats rather than Republicans and Democrats. :approve:
 

CRGreathouse

Science Advisor
Homework Helper
2,817
0
No, it's not true that SS cannot run a deficit, and turbo-1 didn't imply that at all, it's just true that it doesn't run a deficit (yet) and therefore as a system, its revenues cover the cost of its expenditures.
OK, now I have two competing assertions...
 

CRGreathouse

Science Advisor
Homework Helper
2,817
0
IMO - SS was intended to serve as a retirement trust - a safety net to supplement retirement savings. It has evolved into an unfunded entitlement program.
As usual, you are much better at expressing yourself than I am. :shy:
 

OmCheeto

Gold Member
2,059
2,414
Those numbers are reasonably close to my understanding (though, to be honest, I didn't think the bottom quintile was paying *any* net tax -- are you including the EITC?
The bottom quintile pays a tax, even though they and the second quintile both get the EITC, because excise and social security taxes are a bit regressive:

10.3% tax rate for the bottom quintile
vs
1.9% tax rate for the top 1%
 

Gokul43201

Staff Emeritus
Science Advisor
Gold Member
6,987
14
1. How do 23.6 million households survive on $15,300 a year?
I did it fairly comfortably, for over 5 years. And while I was single with no dependents, I was also living in an urban area. I imagine it's probably easier to live on that income in rural parts of the country. Harder if you have a dependent.

2. Am I really supposed to feel sorry for someone making $535.75 an hour take home?
Sorry about what? I would hope you'd feel sorry for any law abiding citizen who has suffered an injustice, irrespective of how much they earn.
 

Related Threads for: Should the Bush tax cuts be extended?

Replies
2
Views
1K
Replies
124
Views
12K
  • Posted
4 5 6
Replies
145
Views
17K
  • Poll
  • Posted
2
Replies
25
Views
5K
Replies
71
Views
7K
  • Posted
Replies
11
Views
2K
Replies
40
Views
7K

Physics Forums Values

We Value Quality
• Topics based on mainstream science
• Proper English grammar and spelling
We Value Civility
• Positive and compassionate attitudes
• Patience while debating
We Value Productivity
• Disciplined to remain on-topic
• Recognition of own weaknesses
• Solo and co-op problem solving

Hot Threads

Top