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Originally Posted by dippin
Except that none of this is actually true. If by increasing the "tax base" you mean getting more jobs, even if every single unemployed person got a job that still would not raise enough taxes to pay for just the basic stuff you seem to be against cutting. And if you think that increasing tariffs will make the difference (and let's set aside for a minute that increased tariffs increase prices and thus reduce purchasing power, and let's set aside for a minute that a tariff is a tax which the consumer will pay), again you are sorely mistaken. Imports as percent of GDP are 17%. If you increase the "tax base" by miraculously raising incomes, you'd have to raise pensions, military salaries and medicare spending as well.
This is not even a matter of economics or theory, but basic math.
Total revenue is 2009: 2.1 trillion
SS pensions: 736 billion
Defense 821 billion
Medicare: 430 billion
interest on current debt: 142 billion
Protection (police+firefighters+courts): 53 billion
Now let's see what you want to cut:
Foreign aid: 21 billion
earmarks: 15 billion
In other words, even if you cut all spending on everything else, including roads, elections, the administration of the federal government, medicaid and so on, current tax revenues still don't make up for that. Unemployment is 10%, so even if you employed every single one of them, you'd still come up short, given that the majority of them would probably still be between poor and middle class. Increasing incomes through whatever magic governmental program also isn't enough, unless you increase the income of everyone else except the military, retirees, and doctors who attend patients through medicare.
A budget is not a magical thing, but actual numbers and figures. And that is specially true when you are talking about not raising tax rates but somehow paying for entitlements, which, guess what, also go up as income goes up.
It really is that simple, and the only way anyone can talk about paying for medicare, social security and the military without raising taxes is if you found jobs for all the 10 % who are unemployed that paid over half a million dollars a year.
And this is all talking about current figures. As the population gets older medicare and social security will continue to grow.
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Again, I disagree. By raising employment and wages, we'll see serious growth. You can't ignore the debt we now have but if you rebuild the tax base, restructure programs to be streamlined, effective and cut pork and foreign aid, we may get a better handle on it.
If we rebuild and increase factories by 50%, that's a 50% increase in taxes, without raising the rate. Those factories will need supplies thus, more businesses will pop up around them, thus more tax money is raised, not just nationally, but state and local.
As more jobs are created, the market becomes a worker's market meaning wages go up. Thus, people have more to spend, more to save. That means we see taxes rise in sales, parents are more able to help their kids pay for college, IRA's and other retirement funds can be afforded and government's burden decreases. With that we see, tax rates not increased and government not having to spend as much money on those programs.
Same goes for rebuilding the infrastructure. Jobs are created, wages are pushed higher, more small businesses grow, more real estate is sold, etc. thus in those areas where there will be rebuilding we'll see a tax base build to where it could feasibly pay for the work being done. Again, not a SINGLE tax rate has to go up.
Once you get an increasing tax base, streamline programs to control spending, you should see growth in income for the government and they will not have to work on deficits and may be able to start paying the debt down.
With the boomers aging, we are going to see the tax base continue to decrease and thus the rates are going to have to increase. In doing so more manufacturing, more labor will be moved overseas. The market becomes employer driven meaning wages are kept lower, which depletes the tax base even more, which is going to have to increase the rates, which means more businesses go overseas.... etc etc etc.
The only way to stop the bleeding is to rebuild a tax base as stated above. If we do not rebuild a tax base soon, the spiraling will get totally out of control.
THERE IS NO OTHER WAY, EXCEPT THE TOTAL BANKRUPTCY AND DISSOLUTION OF GOVERNMENT.