No they wouldnt. You rate debt on the likelihood that it will get paid back. And as crappy as our debt situation is, America is still the safest investment in the world when it comes to bonds. There is a reason why the US bond market is still considered the international risk free rate when making financial projections about a market.
we can debate all month about the level of crappiness and likelihood of our debt ever being paid back (btw, no country or empire in history has every fully repaid its debt). what is not up for debate is what i bolded in your response (switzerland).
This. Any sane person would look at the federal government's financial situation over the last fifty years and come to the same conclusion.
The blame game is fun, but the reality of our situation is harsh. If the national economic is to survive, the Washington bozos must quit playing games. They must cut spending and raise taxes at the same time. I have proposed the graduated flat tax ($30K or less income exempted and max tax at 25%) without writeoffs, subsidies or shelters, and GladiatorRowdy proposes a valued added tax on all goods except food and medicine, also without tax dodges. Although cutting spending and raising taxes simultaneously sounds simple, it is until everyone realizes their oxen are being gored. Conservatives have to be willing to remove social security caps, remove writeoffs and subsidies, etc. while liberal must sacrifice social, union and welfare entitlement programs where they "buy" votes. We need to quit our "covert" and semi-declared wars, sell food/medicines or exchange them in equal measure for oil or other raw materials we need. We need to quit buying Chinese goods, and buy/hire from U.S. sources. If the unions are going to boycott Wisconsin stores for trying to remain neutral, why can't they boycott stores selling goods from countries that are not equal trade partners? My rant is inexhaustible, but no one wants to read that much bile. Sorry, but hard solutions achieved through compromise -- not "winning" -- are crucial.
How do you propose a self employed individual is suppose to stay in business if they can't use writeoffs?
I've done it every day of my life for the past 25 years. I've taken advantage of some tax laws, sure, but I didn't need to do so. I would have made a comfortable living anyway.
And what are you? A computer programmer with little overhead? What if you are a rural plumber? You quote a replacement sewer line for $1500 for a customer 50 miles away. The cost for a rental of a backhoe cost $500, another $400 in materials and the remainder $600 to cover everything else including labor. Of course you can't expect the plumber to pay taxes on the original $1500 check the customer cuts to him. He has to in the very least write off the cost of flow through materials of doing business. This is why the tax code is so complex. Making general assumptions such as doing away with write offs or 'taxing those corporations more' simply because big corporations abuse them would destroy hundreds of thousands of small business jobs.
My company brokers freight all over the United States and Canada, complete with bonding, licensing and all the federal rules you could ever say grace over.
I wanted to revisit this because you have a substantial point that I did not have time to address -- cost of doing business. First, I think we may define "write-offs" differently. A true business cost is the cost of machinery, supplies, labor, communications, office space -- that sort of thing. All are business costs and therefore "write-offs" in anybody's book. However, I can also write off a charter boat fishing trip for my favorite clients or lunch/dinner/drinks for entertaining business associates. Why eat alone for $15 when I can eat with a client or supplier or potential broker for $40 and eat free (after write-off)? Do I need these to one up my competition? The answer is ... not really. Let's look at the Space Ghost plumber who buys his supplies, machinery, labor etc. for $1,000 and charges his customer $1500. The tax on the whole $1500 would hurt if his profit is $500. However, under a graduated flat tax system he would be taxed on the $500 he earned -- i.e., his net rather than his gross. If that plumber had one such job a week, his net income would be $26,000 -- exempt if the flat tax bottom were $30,000. Now if he had one such job every business day, his earnings would be $130,000, so he would be paying a flat tax on that -- say $23,400 at 18%. GladiatorRowdy would make a valid point that tax code brackets would not be necessary since each specific item like machinery, supplies, communications, office space, etc. would carry its own little tax to be forwarded to our free-spending Congress/Administration. But I'll let GR extol the virtues of the value added tax, which I believe is too complicated and lends itself to being as complicated, with time, as our system now. At any rate, I hope this brief overview gives you a better perspective of how a graduated flat tax without write-offs would be more fair and productive when you think in terms of "net" rather than "gross" earnings.
I don't think it's the bozos in Washington. It's the people who elect them. I don't know if a sane person (who wants to sizably raise revenue and cut spending) has a chance in hell of getting elected. Is every democratic state facing huge public debts? Maybe there's something wrong with the system. The idea that the electorate actually knows what's best for the state may be flawed. One-time term limits may be a start. LIE all u want to get elected. But after you do, actually do the right thing? Rather than focus on getting re-elected? I don't know much of the history of soverign debt levels in democratic states - but has this been a rather recent trend (talking decades here). If so, what caused this trend. Were governments just more wary of bond issues in the past?
