I'm saying that if you cut taxes or increases taxes tax revenue will increase. One will increase tax revenue more. We need the greatest increase we can get.
Hey, that is what I said too. You know how I can tell you are smart? Because you agree with me! (he he)
Taxes should in no way be appropriately termed revenue to a government dishing out 2X the entire tax base in debt through bailouts. First of all the interest on the debt is over 1/2 trillion annually, second all of this new debt is being generated disproportionally to the tax base. If you are borrowing 1.5 trillion for bailouts and running appoximately a 1.5 trillion deficit and your tax base is around 1 trillion I'm not sure another 100 billion in taxes speaks to 'real' revenue. It is a drop in the debt bucket and a flood of pain to the taxpayer. The government right now should cut taxes to an extreme, spend money like it never has on infrastructure projects and do anything else it can to monetize this thing without defaulting. The situation is much more serious that the government is speaking at this point. I am glad the speech was optimistic, but the reality of the situation isn't. Just what industry in the US is going to jump up and fuel economic growth? Technology? Oil and Gas? Automobiles? Real Estate/Housing? Like you said the government is the lender of last resort. We are borrowing our last resort as we speak. If your company was 1 million in debt and your income potential was capped (as is the tax base) and you needed to borrow another 1/4 million to keep from laying off people and the only way you could borrow it was to borrow from your employees would that be possible to sustain long term if they would agree? That is how taxation works under these conditions. Taxing is fine if you have the industry and profitability to bail out the government. If your taxes aren't going to bailout the government, then let them push the debt to the brink, save jobs and as many businesses as possible. The other solution is to strain the private sector with tax while doing all of the above. It is an OK plan if you are a banker or you are going to be one of the few companies that gets a government contract eventually. I don't think the government is speaking to the depth and breadth of the credit crisis. It is global, the leveraged credit will contract and we will face the consequences. The question is how to make it the least painful to you and I and every other citizen. Also there is not real difference between income tax and federal withholding tax. The federal withholding tax is collected and sent in as down payment on income tax. So far I don't think the republicans are doing anything but playing politics and the government is jsut trying to offer free beverages while they try and find a crash landing site.
FranchiseBlade, I think we need to look at how much the Fed has pumped into the financial companies, how much the bailouts are totalling, how much the deficit is PROJECTED, how much of the SS trust fund is going to be taken in treasuries etc and add all the other off the book stuff and then take in account the debt interest and even the pressure of the baby boomers coming in the next 2-3 yrs and ask ourselves how another 100 billion in taxes is going to make a bit of difference to anyone except those who have to cough it up. Now if your talking about doubling the tax rate for everyone so that you get about 2 trillion then you might impact the deficit or finance part of a bailout, that would have some impact. i just read one prediction that military spending in Iraq and Alfg. will increase this fiscal year and could total another trillion before troops are brought home, I love paying taxes as much as the next person, but I don't think for a second it should be the method of rescue, this isn't the recession of the 70's or 80's IMHO.
I think if we look at any one solution only it won't work. But if we look at attacking the problem in many ways it will help. Yes, we can't ignore Social Security. Yes, we need to repeal some of the tax cuts, and yes, eventually we will have to cut spending.
It was not really. There was no payroll tax cut for the employer, and the cut mentioned is the make work pay credit, which is not really a payroll tax, but more like an extension of Earned Income Credit to higher income individuals. Dependents don't qualify for the credit, and it phases out at $75,000($150,000MFJ). The max credit is the lesser of $400($800MFJ) or 6.2% of earned income.
I wasn't referring to government revenue but to individual and business revenue. I'm not advocating raising taxes but I think we've come to the end with which tax cuts can stimulate the economy. You can cut taxes but without personal and business revenue there are no taxes to cut anyway.
I think it could be argued that lower (federal) taxes across the board might work just as well: by affecting more people more quickly (though to a lesser degree) than the targeted stimuli. Either one will cause a deficit, and I almost think it will be easier to justify raising taxes on individuals later on if you cut their taxes beforehand.
Except that statistics show that it doesn't work... While statistics show that investing money in things like food stamps does work.
Whether they "work" depends on what you're trying to do. Personally, I think the government going deeper into debt in order to give people more money so that they can go into more debt is a pretty stupid idea. If we were Iceland we'd be bankrupt. O wait.... People should be paying off their debts, not incurring more. Our GDP is grossly inflated anyway because all the consumer spending isn't coming from money we earned, its coming from the Chinese in exchange for IOU's...as I don't believe that raw money is counted in the "net-exports" category of that particular formula.
