A theology of taxation

[All Tell]

Nice rationalization, I don't make enough to make a difference so I'm not part of the problem, everyone else is. And FWIW if it was up to me the government that I support would spend MORE on defense and even less on welfare and other entitlement programs.

[75center]

So how is what I wrote wrong. If you pay 35% in income taxes you are saying if you include all taxes that your rate would be about 70%. 70% of 100,000 is 70,000.

 

You can clarify with and example if I am still not getting it, but the simple fact is that there is no way you get anywhere near 70%.

 

Sure you can in many localities. Federal, state, local, property, self employment, sales, along with all the other taxes hidden as fees.

[acemona]

Sure you can in many localities. Federal, state, local, property, self employment, sales, along with all the other taxes hidden as fees.

 

No you can't. A 6% sales tax does not hit 6% of your salary, it hits 6% of your purchase.

[acemona]

Nice rationalization, I don't make enough to make a difference so I'm not part of the problem, everyone else is. And FWIW if it was up to me the government that I support would spend MORE on defense and even less on welfare and other entitlement programs.

 

Why? What do we need that we don't have? We have a deteriorating infrastructure that needs to be rebuilt and you would rather spend more money on another tank or jet instead of rebuilding a bridge or giving someone job training? I just cannot and will not ever understand that logic. Unless we are really going to build a star wars machine that shoots missiles out of the air there are no real threats to our safety that a higher defense budget can cover. The threats are from our disparate economic system. There is going to be unrest if it doesn't get better and it will eventually get ugly.

[ladiesbballcoach]

Spending on defense creates huge amount of jobs.

 

But I agree with Ace, more should be spent on infrastructure.

 

There are many programs that do not need to be supported with tax dollars.

 

Everything but the bare basics should be cut.

[75center]

No you can't. A 6% sales tax does not hit 6% of your salary, it hits 6% of your purchase.

 

So what? It's a tax. You keep going back between all taxes and income tax. You're the one who said everyone pays some kind of tax. I agree and I said if we're talking ALL taxes, then the 35% rate I mentioned would have to be much larger. Do you want to talk all taxes or federal income tax?

 

If you want to keep it at Federal Income tax then yes, many, many people get away with not only paying nothing, they get a refund on taxes they never paid in the first place. The comparable number is then 35% on the highest payers. Is that fair?

[Bluegrasscard]

Spending on defense creates huge amount of jobs.

 

But I agree with Ace, more should be spent on infrastructure.

 

There are many programs that do not need to be supported with tax dollars.

 

Everything but the bare basics should be cut.

 

Infrastructure (roads/bridges) is supposed to be funded by State and Federal taxes on gasoline. The problem is this...in the last 4 years and especially this year gasoline consumption had gone down thus reducing this funding - a lot. But the goal of the green energy crowd is to do exactly what is happening. If everyone drove Volts the funds for infrastructure would dry up. So the model for infrastructure funding may need some changing.

 

When you look at the WH's own numbers every Federal department shrinks its spending in real dollars in the out years based on current projections. This includes military. In fact military goes down around 25%. So the plan already bakes in something that has never, ever happened - Federal function actually reducing spending. What goes up - way up - are these items: a) Social Security, b) HHS (government medical care, i.e. Obamacare) and c) Interest on the national debt. These 3 items dominant out year spending. Completely dominate the Federal budget.

 

We won't dwell on the debacle of b), c) goes up because the Fed and the Chinese want their interest AND we continue to add to what we need to pay interest on. So c) skyrockets from where it is now. a) is trouble - even before the 2% cut receipts actually went down - that had never, ever happened before in the history of social security. The 2% cut only makes that fact worse. Receipts are under pressure with the lack luster recovery and as we know - the boomers are retiring.

 

 

So even with never-before-done cuts across all federal agencies - including military the numbers have no hope of balancing due to the 'big 3'. We can deny the issue with the 'big 3' but it does not make it go away.

 

This is slightly dated but this shows the issue - this is from the White Houses own numbers:

 

[Bluegrasscard]

Here is another chart with numbers from the White House.

 

This is Receipts - mostly individual and corporate taxes and social security/medicare receipts.

 

Notice the outyear projection for individual income tax. It skyrockets in a historical curve. The only way that would happen is by either doubling tax rates - without kill the economy in the process or a stock market that goes to Dow 30000 by 2016. Both are nearly impossible. No the bold blue line - it is the linear projection of individual income taxes. This is what is expected if things 'keep chugging along'. Even if things did 'keep chugging along', which they really have not done so the last 4 years, the likely revenue is much, much less than the White House projection. The linear outlook would be good - very good. But to keep the deficient from exploding in their own plan the White House has had to make a simply completely insane projection. It is an insane, unachievable number anyway you cut it. UFOs, Bigfoot and the Loch Ness monster are all more believable that that projection. And even with this projection - there is STILL a deficit.

 

As I keep saying - this is interesting banter - but the numbers do not work. Assume that by some miracle you can increase tax revenues by 10-15-20%. Buffet rule, Bush tax cut expires, Congress stops 'fixing' the AMT, inheritance tax goes back up, etc, etc. It does not come close to fixing the problem. Not even close.

 

[All Tell]

Why? What do we need that we don't have? We have a deteriorating infrastructure that needs to be rebuilt and you would rather spend more money on another tank or jet instead of rebuilding a bridge or giving someone job training? I just cannot and will not ever understand that logic. Unless we are really going to build a star wars machine that shoots missiles out of the air there are no real threats to our safety that a higher defense budget can cover. The threats are from our disparate economic system. There is going to be unrest if it doesn't get better and it will eventually get ugly.

 

I've got zero problems with increased spending on infrastructure as soon as the rampant waste in the entitlement programs as well as redundant government programs and jobs are eliminated.