The Nation's Financial Condition

[foreverlax]

Latest Deficit News

No clue how you can have the best economy in our nation's history and still rack up billions in deficits...it's an impossible feat....unless you give away income and spend more then you bring in.

I would argue this is very very far from the best economy in out nation's history. The working class is still taking it in the neck. I assume your sarcasm font was on.

It was a "question" for Frito Bandito

[ggait]

Just as sure as the night follows the day:

The Treasury Department reported a $779 billion deficit for the September-ending fiscal year, the nonpartisan Committee for a Responsible Federal Budget broke down the degree to which the recent tax-and-spending decisions by Congress expanded the budget.

As the chart shows, the tax-cut legislation is the reason red ink increased rather than decreased at a time when the unemployment rate is at around a 48-year low and the economy is growing rapidly.

Even the additional spending in the Bipartisan Budget Act of 2018 wouldn’t—on its own—have led to an increase in the deficit.

https://www.marketwatch.com/story/heres ... 2018-10-16

#math

[a fan]

My suggestion is to cut taxes more, GGait. That'll square things for sure.

[foreverlax]

Sounds like Trump is attempting a Penny Plan, using a nickel. Hard to be sure, but it sounded like he was backing off of $716b for military, keeping it a $700b for next year.

Don't forget the rest of the plan

Living with 1 percent less is a small price to pay in order to help bring this country back from the brink of catastrophic fiscal failure. When a balanced budget is achieved, the bill would place a cap on total spending each year at 18 percent of GDP. Over a 10-year budget window, the bill would cut spending by about $8.7 trillion.

GDP is around $18.5T. 18% of that would be $3.3t vs the $4.4t we spend today

.....we should focus on identifying and eliminating all of the wasteful spending that occurs in Washington before we look to other important programs and services. Cut the worst first. Let’s be smart about the spending cuts and prioritize how we spend taxpayers’ dollars instead of administrators proposing cuts that will cause the most public outcry so there is pressure to restore funding.

Last year we were paying approximately $223 billion a year in interest alone on the national debt. If rates go up slightly, as predicted, within 10 years we will be paying around $839 billion a year to our creditors in interest.

We are paying over $360b in interest and rates have doubled since this article was written.

[ggait]

My suggestion is to cut taxes more, GGait. That'll square things for sure.

Supply side tax cut economics is the governmental version of the old retailer joke "we lose money on every sale, but we can make it up on the volume."

So eff-ing brain dead.

[a fan]

The best part is hearing "serious" economists like Laffer insisting that the math squares.

If this worked, even a little, why not cut taxes down to next to nothing? Why not cut to 1%?

And when these idiots try and answer that question, the jig is up.

[youthathletics]

That's actually what needs to happen...cut it down to 1%, then slowly start over again. Only problem....the lights, HVAC, Sanitation, drinking water, maintenance will all go to crapola and we'd all be living in one of those run down left run cities like San Francisco.

[HooDat]

The best part is hearing "serious" economists like Laffer insisting that the math squares.

If this worked, even a little, why not cut taxes down to next to nothing? Why not cut to 1%?

And when these idiots try and answer that question, the jig is up.

we should cut taxes to 1%...


... 1% of SALES.

and completely eliminate the federal income tax.

[a fan]

Sigh. To quote the Beach Boys..... "wouldn't it be nice?"

[HooDat]

Sigh. To quote the Beach Boys..... "wouldn't it be nice?"

but then the gov gives up too much control. They like the dollars the get from:
- the accountancy lobby
- the tax attorney lobby
- and the HUGE swath of industries etc. that get hand-outs via the tax code

the sales tax thing is too transparent and just a bridge too far into the land of common sense and accountability.....

[a fan]

The worst part of it is, it would solve every problem that we have as a nation.

It would tax the black market
It would make overseas tax shelters pointless
It would tax tourists
It would tax illegal aliens
It would tax the bottom half of earners that don't currently pay income tax
It would tax all those businesses and corporations that don't make a profit, and are therefore not taxes in our current system

And it would be a tiny enough tax to make tax fraud a waste of time.


And it'll never happen!

[Trinity]

Ggait. A bartender I know well once told the boss after a wild night, “There’s not much in the register, but we did SOME volume.”

[youthathletics]

The worst part of it is, it would solve every problem that we have as a nation.

It would tax the black market
It would make overseas tax shelters pointless
It would tax tourists
It would tax illegal aliens
It would tax the bottom half of earners that don't currently pay income tax
It would tax all those businesses and corporations that don't make a profit, and are therefore not taxes in our current system

And it would be a tiny enough tax to make tax fraud a waste of time.


And it'll never happen!

Playing this forward to get thoughts if this were really implemented.....

And what happens when that tax just keeps going up and up and up, then consumers stop buying as much of the expendable crapola that is marketed to all of us. Seems we would regress to simpler times and there would ultimately be fewer and fewer businesses providing widgets, simply based on supply and demand?

[HooDat]

Think about the difference between you paying your current income tax rate and then think about EVERYONE else paying 1% of what they spend. That includes 45% of the population that currently pays nothing. That includes the Trumps and other TFB's of the world who hide all their income in shelters and trusts.

If I saw somewhere there would really be creep it would be the taxation of "luxury" goods.....

[youthathletics]

I understand the part about 45% not paying. I am playing this far more forward assuming the consumption tax were implemented. I could just envision less and less merchandise being purchased.

[holmes435]

Think about the difference between you paying your current income tax rate and then think about EVERYONE else paying 1% of what they spend. That includes 45% of the population that currently pays nothing. That includes the Trumps and other TFB's of the world who hide all their income in shelters and trusts.

If I saw somewhere there would really be creep it would be the taxation of "luxury" goods.....

Let's indeed think about 45% of households (77.5 million people) not paying any federal taxes. If they're all the poor, then they generally make less than around $10k-$15k per year depending on how they file. Let's say they spend 100% of their income, that means they would pay at most $150 per year to the .GOV.

That's an additional 10 billion or so in revenues. Not bad, but put into perspective that would be an increase of 0.18% in tax revenue annually over what we currently pull in. The poor aren't gonna give us any measurable boost.

The question is indeed how many rich people do we get to charge who are reporting low net incomes.

[a fan]

Let's indeed think about 45% of households (77.5 million people) not paying any federal taxes. If they're all the poor, then they generally make less than around $10k-$15k per year depending on how they file. Let's say they spend 100% of their income, that means they would pay at most $150 per year to the .GOV.

That's an additional 10 billion or so in revenues. Not bad, but put into perspective that would be an increase of 0.18% in tax revenue annually over what we currently pull in. The poor aren't gonna give us any measurable boost.

That math is missing the other part. All the products that they buy has been taxed. Multiple, multiple times. It's why this tax will be so small.

If they buy a can of soda, the miner is taxed, the refiner is taxed, the can company is taxed, and the ink ,the case holder, which has more ink, and glue, and the case is shrinkwrapped, sits on a pallet, then multiple trips in a truck (and all the taxes on the gas, the wiper fluid, parts, oil, etc.).....

The purchases made by these poor people will drive hundreds of billions more than what you are listing.

And then you use the taxes collected to fund programs to help those poor people....rendering the fact that the tax is "regressive" irrelevant.

The reason that the tax works is that everyone gets hit, and no one escapes. Not even criminals, who still buy goods and services. But the big one, obviously, is the very rich and the very large corporations all pay in. There's nowhere to hide because there is no point in hiding.

I still get blank stares when I ask businessmen----people who have been in business their whole lives----that if capitalism is where it's at: why do we tax (penalize) profits? It's the single dumbest thing a capitalistic economy could think to do. Penalize good businesses, and encourage bad ones. Wait, what? And yet, I have never once read a paper or essay anywhere that attacks this ironic and paradoxical method of taxation in the US.

The UK FINALLY started discussing this idea, btw. Not a consumption tax.....rather, taxing revenue instead of profit. Because OF COURSE that's what you should do. Do unprofitable business use roads, FEMA, and our military? Yes yes and yes. So why the firetruck would we let them skip on mucking in? Doubly so when so many businesses are "unprofitable" because they are playing tiddly winks with spreadsheets. It's idiotic.

[ChairmanOfTheBoard]

my question would be- let me have a look at the exemptions.

and then- let me see what spending looks like. is this meant to be budget neutral?

too little, still deficient. too much, spending will just increase.

[a fan]

The whole key is: no exemptions. That's how we got to where we are in the first place.

Moreover, why would we have exemptions? Does everyone use government services? Roads? Protection from our military?

A trifling percentage would yield hundreds of billions of dollars. Pretty easy to balance the budget.

[holmes435]

That math is missing the other part. All the products that they buy has been taxed. Multiple, multiple times. It's why this tax will be so small.

If they buy a can of soda, the miner is taxed, the refiner is taxed, the can company is taxed, and the ink ,the case holder, which has more ink, and glue, and the case is shrinkwrapped, sits on a pallet, then multiple trips in a truck (and all the taxes on the gas, the wiper fluid, parts, oil, etc.).....

The purchases made by these poor people will drive hundreds of billions more than what you are listing.

And then you use the taxes collected to fund programs to help those poor people....rendering the fact that the tax is "regressive" irrelevant.

The reason that the tax works is that everyone gets hit, and no one escapes. Not even criminals, who still buy goods and services. But the big one, obviously, is the very rich and the very large corporations all pay in. There's nowhere to hide because there is no point in hiding.

I still get blank stares when I ask businessmen----people who have been in business their whole lives----that if capitalism is where it's at: why do we tax (penalize) profits? It's the single dumbest thing a capitalistic economy could think to do. Penalize good businesses, and encourage bad ones. Wait, what? And yet, I have never once read a paper or essay anywhere that attacks this ironic and paradoxical method of taxation in the US.

The UK FINALLY started discussing this idea, btw. Not a consumption tax.....rather, taxing revenue instead of profit. Because OF COURSE that's what you should do. Do unprofitable business use roads, FEMA, and our military? Yes yes and yes. So why the firetruck would we let them skip on mucking in? Doubly so when so many businesses are "unprofitable" because they are playing tiddly winks with spreadsheets. It's idiotic.

The math may be missing that other part, but that other part is already accounted for in today's tax scheme. Someone making 10k a year and paying no federal tax is buying goods from grocery stores, convenience stores, and more. Those stores are (supposedly) paying federal income tax, the store owners and their employees are paying federal taxes on profits from those products sold. So even if someone making $10k a year isn't paying federal tax on what they make, any money they do make is finding its way up the federal tax food chain in some amount.

Even if you're looking at an item being taxed 5x from raw materials to consumer and raising 50 billion instead of 10, that's still a drop in the bucket. I'm not saying a consumption tax is a bad idea not worth exploring, I'm saying that people complaining about the supposed "freeloaders" aren't going to see a huge jump in revenues from these people if we have a federal consumption / transaction tax. They aren't the major revenue problem or solution our country faces in any tax plan.