It's simple, taxes must either increase substantially or we must spend a lot less...

The problem with that cherry-picked statistic is that it takes things out of context. In particular, it does not address tax implications.

I've already explained how removing the MID would discourage home ownership.

 

It is simple. If we don't start taxing the rich like other advanced countries we will have a sicker, less educated less productive, more incarcerated population and will continue our slide deeper into a "third world " style status.

 

what context do you want?

In Canada, there is simply no MID. Ownership rates are similar (slightly higher). The only other 'tax benefit' on home ownership is that gains on your home are not taxed. But that's it.

Financially, home ownership usually makes sense long term. You pay more initially -- due to interest -- but no rent increases! Your landlord is renting as an investment -- he's looking to earn a return long term too.

Plus there are other motivations for ownership. You can't be forced to move, you can customize your place, over time you get to own it, etc, etc etc.

The MID certainly encourages home debt. Maybe this is good? That debt does get spent in the economy, I guess. But it doesn't seem to have a big impact on home ownership. It is a deduction that's dear to many people, because it's often one of the few that they really get to benefit from. But I just don't think it's particularly effective in what it's said to be trying to achieve.

But it would be political suicide to try to remove it.

 

Perhaps we can become like Venezuela?

 

Aside from the lack of MID, are Canadian tax laws/rates the same as American tax laws/rates? That's the context I'm referring to.

No offense, but your views are overly simplistic and somewhat out of touch with reality.

Do you own your own home? Itemize your taxes?

 

Glynch, I commend your consistency. However, just for reference, at what point -- income wise and asset wise -- do you consider someone "rich?" Your definition would help me evaluate/understand your position more fully. Thanks.

 

I don't know what the "private debt" number actually is, but the public debt number is definitely correct.

all US debt corporate private govt personal

per a speech to the fed,(will link later) this is the estimated shortfall based upon current liability with respect to future obligation... put it this way the system will have to change can it change 112 trillion? who knows... it really doesn't matter how far out you project if your current path is increasingly short, the unfunded liability only means that what ever amount you choose taxes will have to make the payment. So whether it is 10 trillion over the next 10 years or 50 trillion over the next 50 years that is alot of tax and the best way to get a grip of it is to imagine monetizing that much debt and inflation destroying the currency. (here is one link I just googled- it explains out shortfalls will grow into an aggregate tax burden- http://newsburglar.com/2009/04/07/social-security-trust-fund-balance/

I don't think that is a good thing.. it is about 97.5% of GDP at the moment http://en.wikipedia.org/wiki/United_States_public_debt


I agree that it will not be easy to fill the debt hole, but it can be done, so long as everyone is willing to give up their sacred cows.

I think your right, thanks

well I can't figure how we will cut spending by govt both fed, state, and local to the tune of making up 17 trillion when we are increasing borrowing and our total income tax barely covers the annual interest on the debt...

Like God, it is a mystery

 

Let's return to the tax rates before RonALD Reagan. We can then evaluate in a few years if this enough to start hastening the reentry of millions to middle class status.

BTW, Thumbs it looks like hurting folks are wising up to the astro turf Tea Party movement. I look forward to them joining a more productive movement to regain control from the corporate elite.

 

Yes, I understand your desire to return to pre-Reagan tax rates and your views on the the corporate elite. I have my issues with Wall Street but probably not from the same perspective. However, my question is simple: at what dollar amount do you consider someone rich, both by annual income and/or by amount of assets?

 

Here it is for me, if you have a million in assets and/or make a half million a year, you can afford to pay more in taxes than you currently do.

 

So you think people who save should be punished? Believe it or not you do not have to make hundreds of thousands of dollars a year to have a million dollars in assets (by saving over the years). So a person who spends all their money should pay less tax than a person who makes the same annual income and has saved up over the years...great incentive to save!

 

He was asking for my definition of a "rich" threshold. I would not tax the saved money at all, if we kept the income tax I would raise the rates for people in the top tax brackets (and perhaps add a couple of new top tax brackets). Personally, I would ax the income tax altogether and replace it with a consumption tax that would tax only the people who spend their money on new goods and services. That way, people who save their money would not be taxed, which would encourage savings and eventually remove the need for Social Security to exist beyond what it was originally envisioned for (widows, orphans, and disabled people).

 

Where we agree is the need to reform the tax structure. You like the value added tax and I like a graduated flat tax based on total annual income from all sources. I think we agree that tax shelters and subsidies should be abolished.

Someday we must sit down to breakfast and debate which reform would be the most practical to implement.

 

If we ended the wars overseas and reduced our military presence, we could eliminate the income tax and reduce our deficit to 2000 levels. Keep the income tax, and we'd have a surplus. No joke.

 

No radical overhaul of the tax system will be practical to implement. The entire economic system of the country has adapted and adjusted over time to work with the system we have. A radical change would consequences both intended and unintended that could risk economic collapse.

As intellectually appealing as a consumption based system is to someone like me who abhors crass commercialism and the short sighted nature of endless growth,a change to tax on consumption would leave millions jobless.

A graduated flat without a mortgage deduction would probably render the home building industry (the biggest creator of wealth for most Americans).

The more practical move is to tweak the existing system. And for those who say that the rich are being punished, or that the poor are stealing from the rich. Just think of it as a radical new system. A user tax on the economic quality of life. The more you need the police, army, courts to keep the mongols from taking your stuff, the better streets and highways you need to
have all your electronic toys and foie gras delivered, the more you fly, the the more electricity you need, the bigger percentage you pay. We encourage a comfortable, reasonable economic quality of life for more people, by averaging out the liability. Those who need more government services and can pay more without being deprived of need and even some luxury, pay more.

To decide "who is rich" we will do it the same way we always have, though political debate in Congress. All we need to do to make it more fair is eliminate the subversion of the system by political donations and limit the total amount campaigns can spend. Money is not fee speech Mr. Roberts! Corporations are not people!

 

No radical overhaul of the tax system will be practical to implement. The entire economic system of the country has adapted and adjusted over time to work with the system we have. A radical change would consequences both intended and unintended that could risk economic collapse.

As intellectually appealing as a consumption based system is to someone like me who abhors crass commercialism and the short sighted nature of endless growth,a change to tax on consumption would leave millions jobless.

A graduated flat without a mortgage deduction would probably render the home building industry (the biggest creator of wealth for most Americans) stunted.

The more practical move is to tweak the existing system. And for those who say that the rich are being punished, or that the poor are stealing from the rich. Just think of it as a radical new system. A user tax on the economic quality of life. The more you need the police, army, courts to keep the mongols from taking your stuff, the better streets and highways you need to have all your electronic toys and foie gras delivered, the more you fly, the the more electricity you need, the bigger percentage you pay. We encourage a comfortable, reasonable economic quality of life for more people, by averaging out the liability. Those who need more government services and can pay more without being deprived of need and even some luxury, pay more.

To decide "who is rich" we will do it the same way we always have, though political debate in Congress. All we need to do to make it more fair is eliminate the subversion of the system by political donations and limit the total amount campaigns can spend. Money is not fee speech Mr. Roberts! Corporations are not people!

 

Excellent thread guys and I guess it is possible a girl or two. Sorry I somehow missed the beginninng of it Rhester's figures were nice, too, though his simply hysterical conclusion is non-sense. Nice post Gadiator Rowdy. I liked the point about WW II and working our way out of debt. We can certainly right the ship and grow our way out of it eventually if we can get over our political grid lock and control by a corporate elite concerned more about their pesonal net worth than domestic debt issues.

 

Valid points for consideration, Dubious. Repped.

I will let GladiatorRowdy debate the merits of a value added tax. Personally, I think it is too complicated and eventually will generate as many exceptions as there are in the current tax codes.

The graduated flat tax will result in the loss of thousands of jobs. They would begin with the layoff of unnecessary IRS staff (no loss there). Then would come tax attorneys and tax code industries like H&R Block etc. CPAs would take a hit, but they would survive because someone has to count the money and direct it to the right places.

The "credit" lost with the elimination of the mortgage interest credit would easily be replaced with the money saved on lower income tax rates. The bigger and more luxurious the house the greater the tax credit -- so low to middle income people don't get as much benefit as higher income people

With an income tax imposed on all annual income, absent shelters, other taxes can be eliminated. The only income I personally might exempt would be from a federally insured savings or CD account -- but not a money market or other type of investment savings account.

With a graduated flat tax, a person making xx or less would be exempt from the income tax. At the same time, a person making the top rate of yy would know exactly how much he or she owed. The average tax payer would not be overburdened while the extraordinary tax payer would be contributing a share more commensurate to his or her income without being totally raped.

The transition to a newer more streamlined tax code would be rocky at times, I agree. But the long-term benefit would be worth rounding the Horn.

 

Deleted for excess sarcasm and nastiness.

 

glynch, can you please answer this question? I am also curious.