US Debt Problem in simple terms

comsnark said:
Well, not to put too fine of a point on it. . .

. . . .so the party promising to increase spending and reduce revenue is also the one that believes that when you are outspending your income, the answer is to not pay the credit card.

Frankly. . I don't think anybody is interested in reducing the deficit or deficit spending.
Click to expand...

...Seems our biggest disagreement is that lower taxes WILL increase revenues not deficits... This country is the best place in the world to have a business EXCEPT for the highest corporate tax rates in the world, a huge exception. If we lowered our rates to 15% we could start a boom that would pay off all the years of mis-management in 10 years and unemployment would be a thing of the past.

MM
 
Mike, my good buddy, the really sad part of this is that we just don't know the answer to your proposition. It is very debatable.

From what little I know, incremental reductions to taxes increase BOTH revenues AND deficits. My view is not that the effect is not so much that "tax reductions are good for the economy" rather that Keynesian economics (running big deficits to stimulate the economy) increases overall GDP. Have we had a case in modern history where we have NOT had a combination of tax cutting and increased spending?
 
MonacoMike said:
...Seems our biggest disagreement is that lower taxes WILL increase revenues not deficits... This country is the best place in the world to have a business EXCEPT for the highest corporate tax rates in the world, a huge exception. If we lowered our rates to 15% we could start a boom that would pay off all the years of mis-management in 10 years and unemployment would be a thing of the past.

MM
Click to expand...

Lowering the tax rate? hmm...

Check the nice graph of US Corporate tax income vs GDP
http://en.wikipedia.org/wiki/File:Corporate_Income_Tax_as_a_Share_of_GDP,_1946_-_2009.gif

The corporate tax income has decreased vs GDP. That means there must be a lot of companies that are not paying tax based on their profits since corporate profits are at an all time high.

So just lowering the tax rate does not seem to have a huge impact on anything. What I would do - is stop the "tax loop holes" that the "ultra big" companies use/abuse. Companies like GE have 900+ people ONLY in their tax department (and we are not talking sales tax) - and have so much power to push legislation through that benefit GE and not the "SMB" segment in any way.

It is the same problem everywhere in the world. Money buys politics, politicians and the law frameworks. The laws has become so complex that BIG companies are the only ones who can afford to "find" the loopholes and take advantage of them. The poor government tax people has no chance against the high-powered tax lawyers and accountants you find in the big companies.

In my book the ONLY thing that will work is simplifying the tax codes - and stop the beneficial treatment of "BIG" companies compared to the rest. Apple has billions sitting "offshore" that they will not take into the US - because they have to pay tax.

It should not be the size of your company tax department that determines how much(little) you pay in tax.

So first SIMPLIFY - and then KISS - Keep it Simple (stpd) - then you will see corporate tax income vs GDP come back to where it is supposed to be - even if tax rates in general was lowered. Now that would stimulate the economy. And with simpler tax codes - there is less need for government tax inspectors/auditors and so on and so forth. Every new law that gets passed -
 
kaz911 said:
Lowering the tax rate? hmm...

Check the nice graph of US Corporate tax income vs GDP
http://en.wikipedia.org/wiki/File:Corporate_Income_Tax_as_a_Share_of_GDP,_1946_-_2009.gif

The corporate tax income has decreased vs GDP. That means there must be a lot of companies that are not paying tax based on their profits since corporate profits are at an all time high.

So just lowering the tax rate does not seem to have a huge impact on anything. What I would do - is stop the "tax loop holes" that the "ultra big" companies use/abuse. Companies like GE have 900+ people ONLY in their tax department (and we are not talking sales tax) - and have so much power to push legislation through that benefit GE and not the "SMB" segment in any way.

It is the same problem everywhere in the world. Money buys politics, politicians and the law frameworks. The laws has become so complex that BIG companies are the only ones who can afford to "find" the loopholes and take advantage of them. The poor government tax people has no chance against the high-powered tax lawyers and accountants you find in the big companies.

In my book the ONLY thing that will work is simplifying the tax codes - and stop the beneficial treatment of "BIG" companies compared to the rest. Apple has billions sitting "offshore" that they will not take into the US - because they have to pay tax.

It should not be the size of your company tax department that determines how much(little) you pay in tax.

So first SIMPLIFY - and then KISS - Keep it Simple (stpd) - then you will see corporate tax income vs GDP come back to where it is supposed to be - even if tax rates in general was lowered. Now that would stimulate the economy. And with simpler tax codes - there is less need for government tax inspectors/auditors and so on and so forth. Every new law that gets passed -
Click to expand...

Simplify the tax code. That would put out all the accountants and lawyers out of work as you point out. Powerful lobby you would be up against. Still agree with you as stated specifically.
 
comsnark said:
Mike, my good buddy, the really sad part of this is that we just don't know the answer to your proposition. It is very debatable.

From what little I know, incremental reductions to taxes increase BOTH revenues AND deficits. My view is not that the effect is not so much that "tax reductions are good for the economy" rather that Keynesian economics (running big deficits to stimulate the economy) increases overall GDP. Have we had a case in modern history where we have NOT had a combination of tax cutting and increased spending?
Click to expand...

We need to stop turning a blind eye to this financial mess and step up and do something about it........vote them all out and change the system eliminating all perks/retirement and healthcare for politicians.....they are already wealthy but sucking off the taxpayer ***! The trash needs taken out of society also....all colors!
 
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