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Re: Political campaign finance reform... Please!!

WhoWee:

None of these things would even come CLOSE to reaching 40%.
We have to start somewhere.

Social Security, Medicare, and Medicaid are projected to double (then triple) in cost - all borrowed funds subject to interest expense.
http://www.gao.gov/cghome/townhall092905/img18.html

Mech_Engineer
Gold Member
Budget: a balanced budget is very good -but after reducing the size and scope of Government (by 40% IMO).
The only way to balance the budget at this point is to reduce the size of government and the number of wealth redistribution programs!

Flat Tax: is a great idea - but will never be passed - it's too fair. Instead, as long as higher income individuals pay slightly more - the Left will approve - AND as long as the bottom 50% pay something - the top 50% will agree to pay a little more (IMO) - especially if up to 50% could be tax deferred.
You could be right that it's too fair. The real problem is that we're nearing the point that more than 50% of the population will not be paying taxes, meaning more than 50% of the voting population will have a voting majority to keep it that way... once that happens, it's just a matter of time before chatastrophic breakdown IMO.

More than anything I disagree with letting anyone (let alone a huge segment of society) go tax-free. If everyone's paying taxes, everyone has a stake in the success (or failure) of the government; conversely if 50% of the population is dependent on the government and pays no taxes, they will tend to want to support that system of dependency, regardless of cost to the people paying taxes. In essence they are voting for their income (which they will tend to want to increase), rather than how much of their income is taken away (which they would want to minimize)...

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Re: Political campaign finance reform... Please!!

We have to start somewhere.

Social Security, Medicare, and Medicaid are projected to double (then triple) in cost - all borrowed funds subject to interest expense.
http://www.gao.gov/cghome/townhall092905/img18.html
Right, but what you outlined hardly qualifies as a start.

More than anything I disagree with letting anyone (let alone a huge segment of society) go tax-free. If everyone's paying taxes, everyone has a stake in the success (or failure) of the government; conversely if 50% of the population is dependent on the government and pays no taxes, they will tend to want to support that system of dependency, regardless of cost to the people paying taxes.
This is why I want to eliminate the Earned Income Tax Credit program.

The average income (nationally) is approximately $50,000 currently and the EITC runs to approximately$49,000 for a family. EITC was designed and intended to give back Social Security contributions to low income people (something I can't comprehend as this is the group who wiill reap the greatest benefit in the future). Somehow, the giveback now exceeds the contributed amount? Worse yet, a great many people think of EITC as a REFUND. EITC is not a tax refund - a refund implies you had over-paid your taxes.

I'd like to share a personal story - IMO - this summarizes a portion of our problem.
I had a conversation with a person at the end of November. She was playing the lottery and said all she wanted was to win $1 million dollars - so she could get off welfare. I smiled and quizzed her. It turns out that she's always been on some type of Government relief program. As a teenager, she had a few children out of wedlock and received (ADC?), food stamps, Medicaid, and qualified for housing (plus utility assistance). She was actually emancipated as a teen and lived independently (at Government expense) while in high school. When eligible for college, she received grants and continued with other benefits. She disclosed that her social worker is special and has really "hooked her up" through the years. After telling me her story, together we figured out the value of her Government benefits and she concluded they exceed$20,000 per year. When I explained that she's already a Millionaire, she looked at me as though I was insane and demanded an explanation. I responded that $20,000 per year for 50 years was$1 million in benefits - she's already received over 35 years of benefits - and that she would probably receive quite a bit more (she figures at least another 35 years) - to which she agreed. She thanked me and bought me a lottery ticket - then winked and said she guessed she could afford it.

I agreed and took the ticket - it was a loser.

Re: Political campaign finance reform... Please!!

Right, but what you outlined hardly qualifies as a start.
Ok, what do you think would be more effective?

Re: Political campaign finance reform... Please!!

Ok, what do you think would be more effective?
Military spending.

Re: Political campaign finance reform... Please!!

Military spending.
Can you be more specific?

Staff Emeritus
Well, this is drifting away from taxes and onto spending.

I will suggest that people take a look at what the federal budget is before deciding how to change it. For example, if you take the 2009 budget, and zero out the entire discretionary program - including the military - you still wouldn't balance the budget. You also should take a look at Treasury rates and ask yourself what would happen if rates moved up from historic lows to more typical levels.

http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2007.png" [Broken]
Defense(782B): 23%
Social Security(678B): 20%
Medicare and Medicaid(676B): 19%
Other Mandatory(607B): 17%
Other Discretionary(437B): 12%
Interest(187B): 5%
TARP(151B): 4%

http://en.wikipedia.org/wiki/File:U.S._Federal_Receipts_-_FY_2007.png" [Broken]
Individual Income Tax (915B): 43%
Social Security and Social Insurance (891B): 42%
Corporate Taxes (138B): 7%
Other (99B):5%
Excise Taxes(62B): 3%

This means we spend roughly 1.4T more than our revenue. Or we would need to cut spending by 40% to balance the budget.

I was just wondering where and how those in this thread purpose on cutting from the budget, or increasing revenue?

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http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2007.png" [Broken]
Defense(782B): 23%
Social Security(678B): 20%
Medicare and Medicaid(676B): 19%
Other Mandatory(607B): 17%
Other Discretionary(437B): 12%
Interest(187B): 5%
TARP(151B): 4%

http://en.wikipedia.org/wiki/File:U.S._Federal_Receipts_-_FY_2007.png" [Broken]
Individual Income Tax (915B): 43%
Social Security and Social Insurance (891B): 42%
Corporate Taxes (138B): 7%
Other (99B):5%
Excise Taxes(62B): 3%

This means we spend roughly 1.4T more than our revenue. Or we would need to cut spending by 40% to balance the budget.

I was just wondering where and how those in this thread purpose on cutting from the budget, or increasing revenue?

I'll cite my Post 17 above.

"IMO, this would be a logical path to follow:
1.) Raise the top rates for families earning over $50,000 by 5% at all levels. 2.) Eliminate the EITC 3.) Promote investment in the US with accelerated depreciation schedules for capital equipment (purchased from US manufacturers) 4.) Reduce Capital Gains on US based activities by 5%. 5.) Increase Capital Gains on foreign investments by 5%. 6.) Encourage savings (up to 50% of income) in tax deferred retirement funds (US based only) and expand HSA's (and similar programs) - restrict lending of these funds (by banks) to domestic investment and lowest risk. 7.) Cut government spending by 40% (a few ideas: eliminate duplication, renegotiate union contracts, cut foreign aid, cut SSDI spending (primarily Bi-Polar disorder), cut Medicaid spending (address emergency room visits - send non-emergencies to a clinic or require they have a PCP), (restore) Social Security rate and increase to 8% AND eliminate the cap on SS max (but reduce to 4% at$100,000) AND increase the SS and Medicare ages by 3 years).
8.) Seek a return on investment from defense spending"

We clearly need to cut spending AND increase tax revenues - which are down significantly due to the recession.

Mech also makes a very good point - the US corporate tax rates are among the highest in the World - that will need to be addressed in the next few years as well.

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turbo
Gold Member
I was just wondering where and how those in this thread purpose on cutting from the budget, or increasing revenue?
That's where the rubber hits the road. At some point, we need to stop being the world's policeman, IMO, and provide for our own defense. Much of the foreign-aid we funnel to allies is in the form of military armament, and that should stop, too.

Slash farm subsidies that take farmland out of food production and that subsidize the production of ethanol that costs more to make than it is worth, and is contaminating our fuel supplies so that it is difficult to maintain small-engines that are used only seasonally, like outboard motors, wood-splitter, chain-saws, etc. I have a friend who is a small-engine specialist and much of his business is now driven by decomposing fuel, rotted fuel lines, clogged fuel filters, etc. He used to do mostly rebuilds, now his shop is jammed up with nickel and dime repairs caused by crappy fuel. Can't get pure gasoline anymore, and many older engines don't perform properly on anything but...

These are not just drop-in-the-bucket fixes, but can have a real stimulative effect that can provide multipliers. Stop taxing me to give money to Agri-giants that make ethanol, and then I can get decent fuel that lasts for a while in storage, and I don't have to pay the extra "tax" of buying fuel-stabilizers or paying for unnecessary repairs. I hadn't used my chain saw in a couple of years and when I needed it recently, the fuel line had collapsed and stuck together due to crappy fuel. Never happened before in 30+ years.

Luckily, my tractor was designed to run on ultra-low-sulfur diesel, because that's the only stuff you can buy around here these days. Lots of government regulations and mandates have costs that impact businesses all over. Imagine being a commercial fisherman and having to pay for hundreds of gallons of diesel a week, AND having to cope with the reality that you can only get ultra-low-sulfur diesel at the docks because there aren't any refineries in Maine. Oops! Lower lubricity means more frequent rebuilds and resultant down-time and loss of income? Too bad to be you.

More stats...

http://en.wikipedia.org/wiki/Wealth_in_the_United_States" [Broken]is the best numbers i could find for this with a quick look:

0-20% have a mean net worth of 72.6k or 2% of the total net worth
20-39.9% have a mean net worth of 121.5k or 3% of the total net worth
40-59.9% have a mean net worth of 194.6k or 5% of the total net worth
60-79.9% have a mean net worth of 340.8k or 9% of the total net worth
80-89.9% have a mean net worth of 487.4k or 13% of the total net worth
90-100% have a mean net worth of 2,534.60k or 68% of the total net worth

http://en.wikipedia.org/wiki/Military_budget_of_the_United_States#cite_note-Budget_FY2010-0"
Family Housing $3.1 billion or 0.4% Military Construction$23.9 billion or 3%
Research, Development, Testing & Evaluation $79.1 billion or 11% Procurement$140.1 billion or 20%
Military Personnel $154.2 billion or 23% Operations and maintenance$283.3 billion or 41%

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I'll cite my Post 17 above..
WhoWee, look at the numbers I posted. Your plans in Post 17, even if enacted simply won’t nearly be enough.

Turbo. Look at the numbers, Even if we reduced military spending to 0 and eliminated every federal subsidy it wouldn’t be enough.

mheslep
Gold Member
Re: Political campaign finance reform... Please!!

Here, we have to pay for health care,
Minus seniors over age 65, minus the poor who qualify for Medicaid, minus those in the military and some veterans. Minus all that and some more, at least http://news.yahoo.com/s/ap/20101014/ap_on_bi_ge/us_medicare_fraud_arrests" [Broken]

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Mech_Engineer
Gold Member
More stats...

http://en.wikipedia.org/wiki/Wealth_in_the_United_States" [Broken]is the best numbers i could find for this with a quick look:

0-20% have a mean net worth of 72.6k or 2% of the total net worth
20-39.9% have a mean net worth of 121.5k or 3% of the total net worth
40-59.9% have a mean net worth of 194.6k or 5% of the total net worth
60-79.9% have a mean net worth of 340.8k or 9% of the total net worth
80-89.9% have a mean net worth of 487.4k or 13% of the total net worth
90-100% have a mean net worth of 2,534.60k or 68% of the total net worth
Mean net worth has nothing to do with what we've been discussing. So what if the "richest" people have a mean net worth of 2.5mil? At my current contribution rate, assuming 8% avg return and 3% raises every year, I'll have over $2mil in my 401k when I retire (interest on interest adds up fast when you're 35+ years from retirement). That points to good saving practices, not excess income. Last edited by a moderator: mheslep Gold Member http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2007.png" [Broken] Defense(782B): 23% Social Security(678B): 20% Medicare and Medicaid(676B): 19% Other Mandatory(607B): 17% Other Discretionary(437B): 12% Interest(187B): 5% TARP(151B): 4% http://en.wikipedia.org/wiki/File:U.S._Federal_Receipts_-_FY_2007.png" [Broken] Individual Income Tax (915B): 43% Social Security and Social Insurance (891B): 42% Corporate Taxes (138B): 7% Other (99B):5% Excise Taxes(62B): 3% This means we spend roughly 1.4T more than our revenue. Or we would need to cut spending by 40% to balance the budget. Closer to$1.6T this year.

I was just wondering where and how those in this thread purpose on cutting from the budget, or increasing revenue?
Rescind the balance of the stimulus, rescind the balance of TARP, restore all other spending to 2008 levels. That's a cut of over \$1T.

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mheslep
Gold Member
[*]Expand US manufacturing/export incentives. I personally like the German implementation- income made on all exported products are tax-free. Germany is a huge export powerhouse because of this policy and only have a population of 80 million; imagine what would happen to the US manufacturing base if similar incentives were implemented here!
[/LIST]
I like that idea; apparently its being called a 'territorial' tax system now: tax free exports, some taxes on imports.
http://www.expatintelligence.com/territorial-tax-systems.shtml

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turbo
Gold Member
Turbo. Look at the numbers, Even if we reduced military spending to 0 and eliminated every federal subsidy it wouldn’t be enough.
Our country's budget is not a zero-sum game. Every subsidy and every mandate passes costs along to tax-payers. They might not show up as line-item taxes, but they oppress us all and we all have to pay. It's not enough to look at lines on a budget with revenues and expenditures all perfectly balanced out (they never are, BTW). You have to pay attention to the friction that our government imposes on our economy, and that is not insignificant.

WhoWee, look at the numbers I posted. Your plans in Post 17, even if enacted simply won’t nearly be enough.

Turbo. Look at the numbers, Even if we reduced military spending to 0 and eliminated every federal subsidy it wouldn’t be enough.
I agree that spending cuts alone will not solve the problem. Again, I'm suggesting ways to increase investment which will yield revenue in excess of prior years.

mheslep
Gold Member
I agree that spending cuts alone will not solve the problem.
Yes they can.

Yes they can.
Go ahead, cut 1.6 trillion from the budget. Post how much you cut, and from where.

Mech_Engineer
Gold Member
Go ahead, cut 1.6 trillion from the budget. Post how much you cut, and from where.
Problem is- if we don't start now, eventually things will chatastrophically collapse instead. Little pain now, or die later...

I would start with seriously gutting medicare/medicaid/welfare, obviously repeal obamacare because we haven't got the money for it, cut military spending (not to zero though, maybe .75-.5 what we spend now), privatize social security into 401k's asap, and start economic recovery through tax cuts and manufacturing incentives like the ones I posted above.

We've got to start thinking about these things now, if we don't things will get to the point of no return without seriously painful meausres...

Gold Member
Quote Mech Engineer - "The rich get richer because they have good fiscal practices; the poor get poorer because they have poor fiscal practices. This can be seen in the bankruptcy rate in lottery winners and professional athletes for example: even when given ridiculous amounts of money, a person with poor fiscal responsibility will blow it away no problem."

That's a bit of a sweeping generalisation, surely. There must be lots of other reasons why the poor are poorer.

Whoo Whee - I cant't comment on the effect your eight point plan may have, but if the EITC is giving out thousands of dollars like that I would think it at least needs serious reform, if not, as you say, abolishing.

Mech Engineer - similar, can't comment on the effects of the plan, but the Tax system does look over complicated and simplifying it would save on bureaucratic costs and reduce the chances of fiddling the system.

Quote Jack2122 - "it all balances out"

I think this would be fair comment if you trusted your government to oversee and overcomplicated tax system. I don't trust mine. In fact I shouldn't have to. There should be transparency.

Quote Whoo Whee - "it's too fair"

Maybe I'm too idealistic and not enough pragmatic, but why would "too fair" be a problem?

Quote Mech Engineer - "The only way to balance the budget at this point is to reduce the size of government and the number of wealth redistribution programs!"

This would be necessary, but there are other options. Cut defence? Cut research?

Quote Mech Engineer - "More than anything I disagree with letting anyone (let alone a huge segment of society) go tax-free. If everyone's paying taxes, everyone has a stake in the success (or failure) of the government; conversely if 50% of the population is dependent on the government and pays no taxes, they will tend to want to support that system of dependency, regardless of cost to the people paying taxes. In essence they are voting for their income (which they will tend to want to increase), rather than how much of their income is taken away (which they would want to minimize)..."

Agree with this.

EITC looks like a handout to me, not a tax refund.

I'm unable to give a possible comprehensive solution to this, just an outsiders perspective on the bits that look sensible and the bits that look daft.

I'm unable to give a possible comprehensive solution to this, just an outsiders perspective on the bits that look sensible and the bits that look daft.
I've always been a fan of common sense.

Mech_Engineer