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Did record low taxes lead to a greater deficit?

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December 3, 2012 5:47:22 PM

On one side of the escalating budget debate is the premise, offered up by a generation of politicians and tax policy wonks since Ronald Reagan, that government spending is dangerously "out of control" and needs to be restrained. Even if the cure means starving the Treasury Department of cash.

One the other side is a promise, dating back to the Great Depression and expanded through Lyndon Johnson's Great Society, to divert a greater share of the nation's hard-earned resources to care for the oldest and most economically vulnerable Americans.

http://www.nbcnews.com/business/economywatch/facing-fis...

I dont have to read further than this, since theres only one cause to our fiscal demise according to his words.
Wheres the spending will send us off that edge? One sided POVs are only half fast

PS
Since the middle and lower classes have it so easy, then why do some politicians lie?
December 3, 2012 5:54:28 PM

As I said in a different post, inflation is right around the corner, and 250K will be middle class, and only expands the governments reach into alot of money, alot
December 3, 2012 6:00:56 PM

PSS
This is sooo bad, it makes my eyes hurt.
What states do other countries have> Whats the federal contributions to states compared to back when, as state taxes have risen, as well as municipalities.

This hole, this left out fact finding again discredits the author
December 3, 2012 6:13:47 PM

Absolutely amazing.......
December 3, 2012 6:19:32 PM

That article is an apologetic piece and written in such a way to excuse Congress from doing what is politically unfavorable but morally obligated to bring America back to sound financial footing. It is preparing the tax payer to continue to eat $hit while giving elected official a pass for not following the principle of this republic and generations of Constitutional abuses.

Quote:
Until the day comes when the government collects enough taxes to pay its bills, it will have to borrow more money.
This line says it all. If the government is not collecting enough taxes to cover it's bills then the obvious solution is NOT RAISING TAXES TO INCREASE REVENUES or BORROWING MORE MONEY but REDUCE FEDERAL SPENDING!

Quote:
Americans hate paying taxes. They also want Congress and the White House to balance the budget.

They can't have it both ways.
It is our right as Americans to have it both ways! Cut government expenditures to meet the revenues and put any and all surplus towards paying down the debt.

Yes, it is that simple!
December 3, 2012 6:24:29 PM

chunkymonster said:
That article is an apologetic piece and written in such a way to excuse Congress from doing what is politically unfavorable but morally obligated to bring America back to sound financial footing. It is preparing the tax payer to continue to eat $hit while giving elected official a pass for not following the principle of this republic and generations of Constitutional abuses.

Quote:
Until the day comes when the government collects enough taxes to pay its bills, it will have to borrow more money.
This line says it all. If the government is not collecting enough taxes to cover it's bills then the obvious solution is NOT RAISING TAXES TO INCREASE REVENUES or BORROWING MORE MONEY but REDUCE FEDERAL SPENDING!

Quote:
Americans hate paying taxes. They also want Congress and the White House to balance the budget.

They can't have it both ways.
It is our right as Americans to have it both ways! Cut government expenditures to meet the revenues and put any and all surplus towards paying down the debt.

Yes, it is that simple!


The attitude of the author stems from the fundamental belief that all wealth belongs to Government. This is where the notion that you have to "pay for tax cuts" comes from. It is the leftists/progressive/globalist point of view about wealth and wealth redistribution.

Any wealth you have is only because of the good graces of governemnt allowing you to keep said wealth. They truly believe this crap.
December 3, 2012 6:26:48 PM

He cites this to confirm every American having it easy, http://stats.oecd.org/Index.aspx?QueryId=21699 And everyone I have read or listened to from NBC has denied this is socialism, our current direction, and yet they use it to prove how easy weve had it, all the while, many here and abroad think fair share mindsets, as we all have to pay more.
As Ive said in many a thread, its coming, higher taxes, more costs, an ever growing government "giving" us free things, yet when the bills are to be paid, and its Uncle Sam come a knockin, many will change their tune.
December 3, 2012 6:28:41 PM

The proposal right now is increase tax revenue by 1.6 TRILLION dollars over 10 years and additionally cut spending by $600 BILLION over 10 years. Over 10 years the proposal will save 2.2 TRILLION dollars... 10 years.

The government is currently spending $1.1 TRILLION dollars more per year than revenue.

They're talking about $220 billion dollars in savings a year? You know what.. we'll be having this same debate again in a year when we hit the deficit level again.

Oh wait, they're also talkin gabout a 1.4 TRILLION dollar stimulus again to revive the economy for 2013 and on. There goes all the supposed savings right there........
December 3, 2012 6:33:37 PM

sheesh! $220 billion is a drop in the bucket compared to $16 TRILLION in debt.

These guys are clowns and there are people who want to give them MORE power over our lives??
December 3, 2012 6:37:24 PM

Roughly 2000$ per person per year over 10 years
Now, of course this wont break down this way, but it does give people an idea of the costs on the supposed savings alone, almost triple that for new taxes, and it only slows it
December 3, 2012 6:40:06 PM

Always the same trick!

Spend money right now, cut spending over 10 years. Those cuts will never be seen but the money will have long ago been spent.
December 3, 2012 6:45:00 PM

Just say the magic words, one example for local/state is roads, always need more for roads right?
Does thiose monies ever reach the roads? Sometimes

This year, it appears to be fair share
December 3, 2012 6:52:22 PM

You guys crack me up.....just feeding off each other.
December 3, 2012 6:54:22 PM

http://thehill.com/homenews/house/270649-house-republic...

Turns out the Dem's plan for part of their "savings" is ending the Iraq/Afghanistan wars.. which are already going that route. This means they're just pulling the fleece over and not really doing anything different to curb the issue.

The Republican plan is more on par. $800 billion raised from the wealthy by closing loopholes. On top of that a reduction in real spending, not including the two wars since law has already passed on those.. totaling $4.4 trillion over 10 years. $440 billion a year. Twice as much as the Dems have offered.. infact, even more since they used a numbers game to make it appear that they're cutting money when infact they're just not paying for a war (that isn't cutting spending).
December 3, 2012 6:58:47 PM

Like the Bush tax cuts?
They were included in one of Obamas early proposals last time, meaning it wouldnt really be a tax hike, where he later flip flopped
December 3, 2012 7:16:00 PM

Exactly.. the ghost math. On paper it is there, in reality it doesn't exist. They're moving numbers around.

If you google Paul Ryan dissect budget, you can get the YouTube video of him ripping apart the budget and how they played with the numbers.
December 3, 2012 9:54:14 PM

How to pay off your debt:

Quit eating out every night and get a second job.

simple economics. However, economics is all theory. No matter what you do, the consequences will never be known until action is taken.
December 3, 2012 10:17:07 PM

dogman_1234 said:
How to pay off your debt:

Quit eating out every night and get a second job.

simple economics. However, economics is all theory. No matter what you do, the consequences will never be known until action is taken.


Sound advice. Now, how can we upload this command to our orbital mind control device??
December 4, 2012 4:56:14 AM

Oldmangamer_73 said:
Sound advice. Now, how can we upload this command to our orbital mind control device??

OMG: Can you make this analogous with our current country's fiscal/political nightmare?
December 4, 2012 11:52:46 AM

dogman_1234 said:
OMG: Can you make this analogous with our current country's fiscal/political nightmare?


Cut federal spending by 10% right off the top of everything including the military. Then, start to eliminate all the various departments at the federal level. Freeze salary increases for Congress and federal employees. If the budget still isn't balanced, well you get the idea.

To borrow a term from Dog, this is analogous with me dropping cable TV, downgrading my cell phone service, cutting the A/C back in the summer and the heat back in the winter, living off of Ramen noodles and canned Tuna on a regular basis for months. These are the kinds of sacrifices I have to make to balance my budget sometimes. Why should government be any different?
December 4, 2012 6:21:20 PM

dogman_1234 said:
OMG: Can you make this analogous with our current country's fiscal/political nightmare?
I keep going back to Connie Mack's "Penny Plan"...
December 4, 2012 8:31:42 PM

We need to increase taxes and reduce ALL spending...that includes defense and entitlements.

We should have a surplus of 500-1,000 billion USD to start reducing our debt!
December 5, 2012 11:04:56 AM

dogman_1234 said:
We need to increase taxes and reduce ALL spending...that includes defense and entitlements.

We should have a surplus of 500-1,000 billion USD to start reducing our debt!


Thats the problem doggy republicans refuse to have tax increases on the table. They've even been signing pledges against tax increases, makes coming to a bi-partisan deal kinda hard....
December 5, 2012 11:53:26 AM

Unfortunately, the reality is raising taxes will ultimately generate less revenue in the long term. History bares this out. Look at the Bush tax cuts in the early 2000's. Revenues to treasury actually increased after the economic growth kicked in.

Same thing happened in the 80's. Govt. revenue was $600 Billion when Reagan took office. He along with Congress, massively cut taxes and by 1985 revenue to the govt. was over $1 Trillion.
December 5, 2012 12:15:36 PM

wanamingo said:
Thats the problem doggy republicans refuse to have tax increases on the table. They've even been signing pledges against tax increases, makes coming to a bi-partisan deal kinda hard....


Interesting. I guess the $800 billion in new revenue by tax increases (closing loopholes, not a rate increase) doesn't count? Dems put down $1.4 or $1.6 trillion but that was simply by raising the tax rate, not closing loopholes. I bet closing loopholes would generate more money than raising the tax rate. Didn't good old Romney prove that raising the tax rate wouldn't work.. but closing the loopholes would have had him paying more in taxes.

Fact is, Republicans are willing to raise the tax rate..... as long as spending cuts happen. Reality of it is Democrats don't want to cut spending, they just want someone to give them more money.
December 5, 2012 5:58:59 PM

Even if we reduce spending, that still will send us into s recession as less money is going into the US economy.

This situation is a double edged sword.
December 5, 2012 6:36:34 PM

Yes. It will hurt but we will quickly adapt to the immediate spending cuts. Pulling a band-aid off quickly. It'll hurt for a short bit, not long term. Right now, we're avoiding the pain that we need to endure in order to fix things.
December 5, 2012 8:33:52 PM

Okay, so as a college student, how will this affect me?

Would this reduce college tuition and/or reduce financial aid?

I cannot afford to spend 40,000 a year at a 4 year on debt that the bank has on me...with interest at 6-7 percent!
December 5, 2012 8:39:35 PM

When times were good under Clinton, loan rates were 8% and higher.

How does it affect you? You will likely see higher interest rates on your loans, get less government money by loans/grants and have to rely on private loans more. You know, the way I went to college. :D 

If you're spending $40,000 a year at a 4 year school, you're making a mistake. Engineers top out around $120k a year after a long career. Figure you'll be pulling in $75k a year for a while.

Supply/Demand and price point. I bet you can get the same education at a cheaper schoool. Unless you're the best of the best where the School name like Harvard gets you in the door, the education is what matters.
December 5, 2012 9:56:24 PM

The cheapest I will be paying is 16k for tuition, and 9k for housing and food.

How much did you get in private loans? Did you have collateral for the bank? The lowest rates for a private loan is 8-16 percent, some have been 24% annual. Interest builds first day. I cannot afford 100k in loans, and pay 2000 monthly interest plus taxes!

Can you live in a city on 500 dollars a month?

food
housing
health/car care

Chose one only.

What if I lose my job? Banks don't care.

I cannot start a business if I wanted to due to my debt.
December 6, 2012 1:51:46 AM

Private loans, sitting around 10%, but once you graduate you can consolidate them with a government loan and write it off on taxes every year, even if you file a 1040EZ.

Why not live on campus? Or is it more expensive? On top of that, take out loans not secured by the government. Graduate, file Chapter 7 bankruptcy and you're only out 3 years to buy a house. Plus you'll get full credit as you filed Chapter 7 which means you can't file for 7 or 10 years, so everyone will give you any credit you need.

:D 
December 6, 2012 4:30:17 AM

Yeah, how about a more honest way please?

Living on campus is more expensive; however, they will not provide you a food plan since you are not on the university ticket.

You will have to pay food, rent, internet, cable...etc...


I wish college was not expensive!
December 6, 2012 11:57:28 AM

College is a big gamble. You go heavily in debt and hope you get a job and are trained properly. You're also young.. first thing you do when you turn 18? Take out student loans and go into debt for an education.

Really, it is on you to shop around, find the college that will teach you what you need to know to get the degree. It might not be the school with the name you expect. There is a very big reason why so many people are doing a 2+2 path, taking their first two years at generally cheaper community colleges and then moving on to the expensive college.

That's the route I would go. I'm assuming you are a white male, so good luck getting grants and scholarships. You're SOL. :)  Unless you aced your ACT and were the top of your high school class. I'm going to guess probably not as most people are not.

The college should offer labs with computers and internet. That's one expense less. Food might be cheaper on campus as well. Cable TV, do you really need it? College should have free areas to watch TV.

The question is can you make the sacrifice?

In 1999, we used to all use my friend's engineering pass to get into their computer lab since they had the best computers. We would load up Command & Conquer and play all night in there, right before the morning staff would report in. At night the labs were empty. Free computers, internet, and TV in there.

A nice little saying, "Live like no one else today, so you can live like no one else tomorrow." Meaning, make your sacrifices now and you won't have to make them later.
December 6, 2012 1:50:07 PM

dogman_1234 said:
Yeah, how about a more honest way please?

Living on campus is more expensive; however, they will not provide you a food plan since you are not on the university ticket.

You will have to pay food, rent, internet, cable...etc...


I wish college was not expensive!


Do you have a decent 2 year institute near you? That would be way cheaper to knock out all your general classes and then get your associates, then transfer up to the 4 year for your junior and senior classes.
December 6, 2012 9:25:55 PM

I an currently taking phy 221: Physics for Science and Engineering, Calculus I, and and Intro to Egineering class.

I am failing my Calc class and just today failed an Understanding Derivatives test with no chance of success.

I am starting to feel depresses and cannot get out of this situation. Already applied to engineering school at college of choice.
No other job will be stable enough, nor am I good/ talented at anything.

Why bother going if I will be in 100k debt scrubbing toilets at Wal-Mart for the rest of my life since that is the only thing I am good at...

:( 
December 6, 2012 11:15:08 PM

dogman_1234 said:
I an currently taking phy 221: Physics for Science and Engineering, Calculus I, and and Intro to Egineering class.

I am failing my Calc class and just today failed an Understanding Derivatives test with no chance of success.

I am starting to feel depresses and cannot get out of this situation. Already applied to engineering school at college of choice.
No other job will be stable enough, nor am I good/ talented at anything.

Why bother going if I will be in 100k debt scrubbing toilets at Wal-Mart for the rest of my life since that is the only thing I am good at...

:( 


You sound like you have defeated yourself before you've begun to fight dog.

Have you thought of a tutor for Calc?
December 7, 2012 12:13:33 AM

Yeah we have a tutor center at the jr. college I am at.

Not so much as to defeated myself, it is more of, that, when my mother finds out about my grades she will berate me to no end. Hence, the wal-mart toilet scrubber comment.

This is not me throwing a pity-party, this is me being pissed to no end at myself.

I have talked to my adviser, and they said that chances are that I will have to retake both classes: Physics and Calc.

While I transfer out, the grades should be void and unaccounted for, so a fresh slate I reckon?

One of my peers, a very intelligent guy himself, said most people are slow learners and that i may be one. Hopefully, that is not the case as who wants to hire an engineer who takes time to figure out what to do...deadlines guys, deadlines. Plus, it is looked upon today that if you cannot complete a degree within a 4-5 year plan, somehow makes you a 'loser'.
December 7, 2012 3:01:04 AM

If your mother jumps you, tell her you expect that, as you truly arent happy with how things are working out thus far.
If youre good at something, often you dont try as hard as things youre not good at.
Trying hard builds character, as well as develops success down the road
Hang tough dog
December 10, 2012 12:12:47 PM

If you are struggling to pass classes, lower your workload: Take less classes per semester, or pair easy classes with a hard class so you can balance time spent studying. It was 4 hours per credit hour spent outside studying when I was in college. If you took 18-22 credit hours a semester, you could spent 60-90 hours a week studying. This is unrealistic since some classes will be easier than others.

You might be a block learner. Most people tend to learn in small steps, piece by piece until the whole is learned. Whereas a block learner can look at something and not understand each step. One day, everything clicks.

All that aside, take less classes and focus on it more. Sacrifice for a few years and it'll pay off for a lifetime. Study more, hit your tutoring places up. Hey, often they have good looking girls in there.

Worst case, maybe college isn't right for you right now. Seek out a 2 year degree, become a drafter, then later on seek your engineering degree.
December 10, 2012 1:30:59 PM

riser said:
Interesting. I guess the $800 billion in new revenue by tax increases (closing loopholes, not a rate increase) doesn't count? Dems put down $1.4 or $1.6 trillion but that was simply by raising the tax rate, not closing loopholes. I bet closing loopholes would generate more money than raising the tax rate. Didn't good old Romney prove that raising the tax rate wouldn't work.. but closing the loopholes would have had him paying more in taxes.

Fact is, Republicans are willing to raise the tax rate..... as long as spending cuts happen. Reality of it is Democrats don't want to cut spending, they just want someone to give them more money.


Note that none of the "loopholes" were actually named, making the offer impossible to score. Minor point there.

Also note that one persons "loophole" is another persons "deduction". I'm sure that people would go ballistic if the home mortgage deduction ended up being one of the "loopholes" that was closed in the proposal.

Point being: By removing deductions, you are going to hit the middle/lower classes. By raising the rates above $250k, you don't.

Secondly: Revenue is revenue, regardless of source. Raising $800 Billion by removing deductions is the same as raising $800 Billion due to higher rates. The only difference is who the tax hits.

And for the record: Huntsman was right: Remove ALL dedutions from the code, and reduce rates significantly (probably 15% or so across the board). Tax all Income at the same rate (I'm looking at you, investments). Done.

December 10, 2012 1:43:12 PM

riser said:
Yes. It will hurt but we will quickly adapt to the immediate spending cuts. Pulling a band-aid off quickly. It'll hurt for a short bit, not long term. Right now, we're avoiding the pain that we need to endure in order to fix things.


Yes, lets do EXACTLY what Greece did. You make the silly assumption that reducing spending will hurt less then increasing taxes, despite the fact every time this has been attempted, the US has entered a recession:

FDR tried it in 1936. Economy promptly re-entered a recessionary period.
Carter tried it in 1978. Economy promptly entered a recessionary period.
Reagan tried in in 1981-1982. Economy promptly entered a recessionary period.

Government spending, for the most part, creates enough growth in GDP to offset the costs of the programs. For example, according to the CBO, defense spending creates ~$1.20 in GDP per dollar spent. Unemployment about ~$1.50 per dollar, and so on and so forth.

By contrast, according to the CBO, cutting taxes creates about ~$0.50 GDP per dollar spent.

Tax cuts are not economically effective, and never have been. The reason is actually very simple: For a person making $50k or so, an extra 2-3% ($1000 or so) doesn't significantly change their spending habits, or entice them to spend significantly more. That money is saved, and stuffed in a bank, producing almost no economic growth. And people in the upper income brackets already have more money then they can spend, so giving them a tax cut won't increase their spending any. As a result, all tax cuts do is drain revenue, increasing the deficit.


Finally, note the cost of cancelling a program is NOT zero. Those programs, as noted above, have an economic benefit, which you must subtract when factoring in the "cost" of a program.
December 10, 2012 1:57:07 PM

gamerk316 said:
Note that none of the "loopholes" were actually named, making the offer impossible to score. Minor point there.

Also note that one persons "loophole" is another persons "deduction". I'm sure that people would go ballistic if the home mortgage deduction ended up being one of the "loopholes" that was closed in the proposal.

Point being: By removing deductions, you are going to hit the middle/lower classes. By raising the rates above $250k, you don't.

Secondly: Revenue is revenue, regardless of source. Raising $800 Billion by removing deductions is the same as raising $800 Billion due to higher rates. The only difference is who the tax hits.

And for the record: Huntsman was right: Remove ALL dedutions from the code, and reduce rates significantly (probably 15% or so across the board). Tax all Income at the same rate (I'm looking at you, investments). Done.


Plenty of deductions to close for incomes above $250k. It would simply be if you made X amount, this deduction doesn't apply. Raising taxes doesn't mean increased revenues as people will find ways to avoid paying higher taxes. We see it now with many companies paying out dividends now, selling their business, selling stocks, etc. They're going to avoid paying the taxes.

I'm all for a flat tax with no deductions. You do realize that the Dems are going after the sacred cow of home mortgage interest deductions? I said years ago if that ever went away, I would walk from my house as it is no longer beneficial to keep a house for financial matters.

Revenue is not revenue. $800B raised by increasing taxes can't be guarenteed. You're going off a number based on different factors. Nor can closing loopholes guarentee the amount, but it would be far more likely to keep higher earners from decreasing their income, thus paying more by income tax. Raising income tax rates would simply mean more to write off to counter the increase. Under current tax rates, my own effective rate has been 13%. I'm in the 28% tax rate currently. I used a lot of write offs. Raise my rates, doesn't matter, I'll find a way to keep them lower. Close the loopholes and I'm SOL. Close them and reduce tax rates.. say to 20% for me and I'm ok paying taxes on that. Win-Win for both.
December 10, 2012 2:01:04 PM

gamerk316 said:
Yes, lets do EXACTLY what Greece did. You make the silly assumption that reducing spending will hurt less then increasing taxes, despite the fact every time this has been attempted, the US has entered a recession:

FDR tried it in 1936. Economy promptly re-entered a recessionary period.
Carter tried it in 1978. Economy promptly entered a recessionary period.
Reagan tried in in 1981-1982. Economy promptly entered a recessionary period.

Government spending, for the most part, creates enough growth in GDP to offset the costs of the programs. For example, according to the CBO, defense spending creates ~$1.20 in GDP per dollar spent. Unemployment about ~$1.50 per dollar, and so on and so forth.

By contrast, according to the CBO, cutting taxes creates about ~$0.50 GDP per dollar spent.

Tax cuts are not economically effective, and never have been. The reason is actually very simple: For a person making $50k or so, an extra 2-3% ($1000 or so) doesn't significantly change their spending habits, or entice them to spend significantly more. That money is saved, and stuffed in a bank, producing almost no economic growth. And people in the upper income brackets already have more money then they can spend, so giving them a tax cut won't increase their spending any. As a result, all tax cuts do is drain revenue, increasing the deficit.


Finally, note the cost of cancelling a program is NOT zero. Those programs, as noted above, have an economic benefit, which you must subtract when factoring in the "cost" of a program.


It is very simple. Raising tax rates across the board does not even dent the spending issue. Cuts HAVE to be made. Whereas in Greece too many people were dependent on the gov't and they couldn't pay out: riots happen.

Greece is what we are trying to avoid by giving too much back to a population that doesn't put enough in. We have to act in order to avoid that.

We can afford to gracefully cut spending. We have $800B in increased revenues on the board from the Republicans. Let's cut spending on a lot of unnecessary programs. Cutting it across the board wouldn't be useful.. as you said, defense spending does actually employ people, whereas entitlement spending doesn't benefit as you can never get more than 100% of that money back.

Regardless, spending cuts need to happen. How they happen should be the discussion, not raising the tax rates to generate $800 billion over 10 years. Hello, the deficit is $1.4 trillion a year! If we only raise taxes we will be having this same conversation again next year. Remember we had this same one last year about the debt ceiling?
December 10, 2012 11:01:00 PM

riser said:
If you are struggling to pass classes, lower your workload: Take less classes per semester, or pair easy classes with a hard class so you can balance time spent studying. It was 4 hours per credit hour spent outside studying when I was in college. If you took 18-22 credit hours a semester, you could spent 60-90 hours a week studying. This is unrealistic since some classes will be easier than others.

You might be a block learner. Most people tend to learn in small steps, piece by piece until the whole is learned. Whereas a block learner can look at something and not understand each step. One day, everything clicks.

All that aside, take less classes and focus on it more. Sacrifice for a few years and it'll pay off for a lifetime. Study more, hit your tutoring places up. Hey, often they have good looking girls in there.

Worst case, maybe college isn't right for you right now. Seek out a 2 year degree, become a drafter, then later on seek your engineering degree.

I am at a CC.

What will happen is that classes that get lower than a C- will not transfer. This will be a few of my classes so I should be considered a freshmen and a half.

It looks like I may take 6 years ( 2 here at CC plus 4 at Uni) to get my BSEE. I personally think this makes me a loser and no company would hire a guy like me. I could always take my time and get my BSEE, take a few extra classes after my graduation and try to work for the college as an assistant researcher. I hear they get a good pay of 55K or more annually. And that is a 12 month paycheck as well.
December 11, 2012 11:37:24 AM

If you're seriously doubting your ability to do the work to become an engineer, maybe you need to change fields of study. No one really cares about how you got your education, only that you got one. I promise you the path and name of your college/universities won't matter if/when you can apply those principles correctly to a job.
A degree doesn't happen over night. College is hard for a reason at that. They're going to teach you a lot of stuff and most of it will be crap for the job you'll eventually have. As I stated before, maybe you should work on being a drafter in CAD first, (2 year degree) get around some Engineers, see and learn what they do, and then go back for your degree.

It sounds like you are struggling for a reason. I doubt it is that don't understand it.. you pretty much sound self-defeating to me honestly.

As far as degree... who would hire me? My best jobs were landed with having a high school diploma. I have a 2 year degree in something, I can't even tell you the name of that degree. On my resume the last thing I list is my education. No one really cares.. at least for my job. Your job a degree with matter that you learned a lot of set principles of engineering. If a school is accredited in an engineering program, you'll be fine. Doesn't matter if it is $2k a year or $50k a year, they both follow the same program.
December 11, 2012 2:08:08 PM

Quote:
Plenty of deductions to close for incomes above $250k. It would simply be if you made X amount, this deduction doesn't apply. Raising taxes doesn't mean increased revenues as people will find ways to avoid paying higher taxes. We see it now with many companies paying out dividends now, selling their business, selling stocks, etc. They're going to avoid paying the taxes.


Not really. The problem is you screw over those that make a lot of income, but have a lot of expenses. Small business owners come to mind. So the whole "no deductions after $x" doesn't really make any sense.

Secondly, the vast majority of deductions (in terms of dollars) apply to the lower/middle classes more then to the upper classes, so you can't find enough deductions to cut to make a significant dent in the deficit.

Quote:
I'm all for a flat tax with no deductions. You do realize that the Dems are going after the sacred cow of home mortgage interest deductions? I said years ago if that ever went away, I would walk from my house as it is no longer beneficial to keep a house for financial matters.


Playing devils advocate: Why should the tax code be used to try and drive economic activity? If you need the deduction to afford a house, then I would argue that housing prices are still too high.

Secondly, a flat income tax is by its nature regressive in nature. You'd essentially be raising taxes on low income workers, and lowering taxes on high income ones.

A sales tax as a REPLACEMENT for an income tax is interesting, but that also has some issues (specifically, being VERY hostile to new business startups versus established businesses). Much fairer then a flat income tax though.

Quote:
Revenue is not revenue. $800B raised by increasing taxes can't be guarenteed. You're going off a number based on different factors


Nor can any tax, but assuming an economy that grows at an average rate of 2% (which is below 20th century norms), should average out over any timespan.

The income tax is actually VERY recession intolerant; unemployment = no income tax collected. Property and sales taxes handle economic swings better for the most part.

Quote:
Nor can closing loopholes guarentee the amount, but it would be far more likely to keep higher earners from decreasing their income, thus paying more by income tax. Raising income tax rates would simply mean more to write off to counter the increase.


Not without new deductions.

Secondly, understand how the tax code works: the rates are MARGINAL, so every $ earned after a certain point gets taxed at a higher rate. As such, the whole "enticing people to make less money" argument is flat out wrong.


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Under current tax rates, my own effective rate has been 13%. I'm in the 28% tax rate currently. I used a lot of write offs. Raise my rates, doesn't matter, I'll find a way to keep them lower. Close the loopholes and I'm SOL. Close them and reduce tax rates.. say to 20% for me and I'm ok paying taxes on that. Win-Win for both.


Thats the way it probably should be, but thats VERY unlikely to happen for political reasons. Too many deductions that help too many people.

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It is very simple. Raising tax rates across the board does not even dent the spending issue. Cuts HAVE to be made. Whereas in Greece too many people were dependent on the gov't and they couldn't pay out: riots happen.


I'm sure the fact the previous government cooked the books had NOTHING to do with the problem?

Secondly, by cutting spending, you slow the economy. By doing that, you put more people out of work, and thus not paying any income tax. As a result, revenue falls, necessitating more cutting. Repeat until economic collapse. Theres a reason why Greece STILL has a deficit: Because all that cutting has flatlined tax revenue, leading to a deficit just as big as before, but with less revenue then you had at the start.

My point being: Any spending that increases GDP by at least as much as the cost of the program should NEVER be touched.

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Greece is what we are trying to avoid by giving too much back to a population that doesn't put enough in. We have to act in order to avoid that.


In 2000, we had an almost balanced budget.

We implemented tax cuts that caused ~$800 Billion in yearly deficits.

We have a ~$800 Billion yearly deficit.

Conclusion: We spend too much?

Hence the silly assumption that spending, and not revenue, is the problem.

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We can afford to gracefully cut spending. We have $800B in increased revenues on the board from the Republicans. Let's cut spending on a lot of unnecessary programs. Cutting it across the board wouldn't be useful.. as you said, defense spending does actually employ people, whereas entitlement spending doesn't benefit as you can never get more than 100% of that money back.


Sure you can. You ignore economic growth factors. Give a guy a house for free, and you employee the electrician, plumber, the automakers, places that sell furniture, and so on and so forth. Its called the multiplier effect. The vast majority of entitlement spending is offset by increases they produce in GDP. Again, unemployment and food stamps make about $1.50 for every $1, according to the CBO. So don't give me "entitlement spending produces nothing".

In short: put money in the poor/middle classes hands, and they spend it, producing economic growth. Give it to the wealthy instead, and watch that money get stuffed in a bank, producing nothing economically. Which is more effective?

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Regardless, spending cuts need to happen. How they happen should be the discussion, not raising the tax rates to generate $800 billion over 10 years. Hello, the deficit is $1.4 trillion a year! If we only raise taxes we will be having this same conversation again next year. Remember we had this same one last year about the debt ceiling?


$1 Trillion per year as of 2010. $600-$800 Billion can be traced to the Bush tax cuts in their entirety. Another $400 billion or so can be blamed due to a decline in revenue due to the recession. Undo the Bush tax cuts, and when the economy recovers, you are back at a balanced budget without cutting a dime in spending.

Secondly, its OK to have a 2% deficit if GDP grows faster then 2%. Theres a reason why the US has had deficits almost every year of its existence. GDP growth offsets the debt. Simple example: Person A makes $100 and has a debt of $90. Person B makes $1,000,000,000,000 and has a debt of $1,000,000. Which person is in better financial shape? The dollar amount of the debt is irrelevent.


EDIT

Also, can we stop this "over 10 year" BS? Seriously, thats a political cop out if I ever saw one.
December 11, 2012 4:26:20 PM

Ok I'm not reading all that.

Sum up, what are you saying? Spending more will fix the economy?

If you want to argue about having $800 billion in surplus around 2000 compared to today, why don't we do apples to apples: We should also have the spending we did in 2000, inflated of course, as opposed to the current spending levels. Our surplus would be well over $1 trillion a year with tax cuts.

Edit: It is clear you don't fully understand what the GDP means. The US can keep printing more and more money to make the GDP stay consistent. GDP is a very high level economic indicator when everything is held constant; when the gov't interferes, that number really doesn't mean much.
December 11, 2012 4:56:21 PM

Im glad gamerk316 posted, its refreshing to hear other voices in these politically charged threads. It would be cool to hear your two cents on more topics because I thought your post was well put together and raised some interesting points.

Let me sum up risers retort.

tl;dr you dont know what you are talking about.
December 11, 2012 5:10:59 PM

You can't compare 2000 tax surplus against 2010 deficits and argue tax cuts were the cause. You fail to recognize the huge increase in spending.

His math is faulty and his statements are skipping significant parts. In 2000 we may have nearly had a balanced budget but he leaves out the recession GW Bush inherited with the Dot Com bubble. That was significant. How did that get fixed? The tax cuts within a year or two quickly fixed that issue. That "revenue" was lost regardless because of the economy. Things stabilized. 9/11 hit, economy was hurt again for a few long months. It recovered.

Housing market hit again starting in 2006/2006. Economy is hurting again.

The tax cuts helped, they didn't hurt revenue. Spending more doesn't fix the issue. Can we not realize that after 4 years of increased spending at previously unknown levels that it has not fixed anything?

The old argument was that GW Bush was a big spending. His spending PALES in comparison to Obama's. Bush's last year the Federal Deficit was ~$490 billion. 4 years later the Federal Deficit is over $1 trillion.

Taxes haven't changed in how many years? Why is the deficit going up? By his words the deficit should be going down.

What I don't get:

Taxes are the same as 4 years ago when the the deficit was $490 billion.
Revenue has gone up from 4.67 trillion to 5.13 trillion (2008 to 2012)

Deficit has gone from $490 billion to over $1 trillion.

How is that not a spending issue? Revenue is increasing, taxes are the same.. Hmm.

Oh, how about the additional $1.6 trillion the Democrats are trying to push through for 2013 stimulus spending? Hello. Spending issue. Not a tax issue.
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