Does the US need to raise taxes (until out of deficit?)

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So I'm an american and for a few years now we've just had a growing deficit.
The economy still goes on, people keep doing their jobs. But despite that our debt as a country just keeps growing. This is kind of a problem; and not many people really care.
I'm not sure how we can get out of this debt other than raising taxes, cutting govt spending, or both.
So I'd say we should definitely raise taxes on the rich; but I'm not sure if that's enough. If it's not then everyone may have to see a tax hike to get out of the debt.

I do think the richest should get the highest tax rates because it will hurt them the least.

So what do you think? How will the United States solve our deficit/debt?
And what happens if we don't?

IMHO, the US won't solve the problem. It might reduce it to an extent, but mostly, people are going to have to put up with it for a while, and hope it goes away on its own.

There might be a lot of histrionics and bullshit in the meantime, but nothing useful will get done.

Provided the GOP and the Tea Party break apart from edging each other out to the Right, it could happen.
The biggest thing would be Military Spending though, a few less tanks and contracts would go a long way to balancing the books.

Diablo1099:
Provided the GOP and the Tea Party break apart from edging each other out to the Right, it could happen.
The biggest thing would be Military Spending though, a few less tanks and contracts would go a long way to balancing the books.

They set it up to avoid that, though. For example, big contracts with parts made in many states. You cancel that, and lots of governors would be angry about losing jobs. So you keep building them, regardless of need.

Raising taxes won't work because if you give the government more money they will just spend more money. What we should be doing is cutting spending. There's plenty of places we could be cutting spending.

Let's start with pulling our troops out of these various third world hell holes. That'd probably free up a little bit of room in the ol' budget. I think we've been over in Iraq and Afghanistan way too long at this point. We ought tell them to run their country however they like but if their mess ends up on our door step again we will simply bomb them back to the fucking stone age and be done with it.

After that we should start looking at all the obscenely wasteful spending that goes on. Shit like various members of Congress spending obscene amounts of money in the area of 5.5 million bucks on booze and glassware right before the government shutdown. The VA spending a small fortune on fucking art work. Tax payer money going to put shrimp on underwater treadmills, seven figure piles of rocks outside embassies, heated bus stops that cost a million a pop and on and on and on.

With the obscene amount of money that the government is wasting right now it is unconscionable to ask the taxpayers for a single extra cent. There is more than enough spending that could be cut to bring America's financial house in order. Instead of demanding more money to support bad fiscal policy we should instead be insisting that the government live within it's means.

thaluikhain:
They set it up to avoid that, though. For example, big contracts with parts made in many states. You cancel that, and lots of governors would be angry about losing jobs. So you keep building them, regardless of need.

Figures, still, At the very least cut back on R&D, I don't think having a bunch of extremely expensive Super Weapons like Hi-Tech Jets or stuff like that being made only to then gather dust due to their high cost is the way to go.

There is a difference between deficit and debt. Deficit is the difference between the annual spending and tax take and debt to the overall amount of money owed. The US deficit is not currently growing but shrinking largely due to growth in the US economy. This because a lot of the deficit was cyclical in nature and came from the drop in taxes due the recession. Now the economy is on the up swing the cyclical deficit is reducing and will continue to reduce as the economy returns to more normal conditions.

Increasing taxes on the rich has the effect of reducing revenue. The rich are mobile and are welcome in 90% of the world and they can just leave taking their money with them. The rich also have enough money to make it worth while to employ accountants to find loopholes to reduce their tax demands. The French are implementing a 70% tax rate on high earners that has resulted in an exodus of the rich to the UK and Belgium. London has now the 4th highest number of French citizens living in a city in the world. The UK used to have a 50% top rate of tax and when it was cut to 45% the actual revenue increased because of the costs involved in tax avoidance schemes made them too expensive to be worthwhile anymore. Taxing high earners beyond a certain point actually reduces revenue rather than increasing it.

Diablo1099:

thaluikhain:
They set it up to avoid that, though. For example, big contracts with parts made in many states. You cancel that, and lots of governors would be angry about losing jobs. So you keep building them, regardless of need.

Figures, still, At the very least cut back on R&D, I don't think having a bunch of extremely expensive Super Weapons like Hi-Tech Jets or stuff like that being made only to then gather dust due to their high cost is the way to go.

Defence spending is the only area of government contracts that western economies can exclude foreign bidders from. If you want to maximize the impact of government spending, defence expenditure should go up not down. Other other forms of fiscal stimulus stand the risk of profits going outside of the country. If you exclude foreign contracts from non defense spending American companies will get excluded from every other governments contracts leading to a net loss of income and decreased tax revenue.

albino boo:
Defense spending is the only area of government contracts that western economies can exclude foreign bidders from. If you want to maximize the impact of government spending defense expenditure should go up not down. Other other forms of fiscal stimulus stand the risk of profits going outside of the country. If you exclude foreign contracts from non defense spending American companies will get excluded from every other governments contracts leading to a net loss of income and decreased tax revenue.

Up from where? It's already much too high to begin with and your point about American Companies seems moot, what with the Tax Loopholes all over the place.

I'm not saying that the entire military has to go, just I think making 4 tanks instead of 5 tanks would yield better results then merely attacking welfare. (Not exact numbers, just an example)
The Right get their spending cuts, the poor don't get squeezed even tighter and nothing really changes.
Sounds like a win for all involvde.

Diablo1099:

albino boo:
Defense spending is the only area of government contracts that western economies can exclude foreign bidders from. If you want to maximize the impact of government spending defense expenditure should go up not down. Other other forms of fiscal stimulus stand the risk of profits going outside of the country. If you exclude foreign contracts from non defense spending American companies will get excluded from every other governments contracts leading to a net loss of income and decreased tax revenue.

Up from where? It's already much too high to begin with and your point about American Companies seems moot, what with the Tax Loopholes all over the place.

I'm not saying that the entire military has to go, just I think making 4 tanks instead of 5 tanks would yield better results then merely attacking welfare. (Not exact numbers, just an example)
The Right get their spending cuts, the poor don't get squeezed even tighter and nothing really changes.
Sounds like a win for all involvde.

If you cut the from 5 tanks to 4 you make 36 people redundant. The 4 crew members and each front line soldiers has 9 personal working behind the lines. Further more even if you entirely eliminated the US defence budget it still would not cover the cost of the US welfare budget as is currently. The opponents of military spending often give the figure of 57% of the budget being spent on defence but what they miss out is the fact its 57% of discretionary spending that the military accounts for, i.e in the annually passed budget. When you add in the mandated spending, defence falls to 19~20% of the budget whereas medicaid and social security make up~40-41% of US spending. Thats the reason why welfare is hit, its just simply the biggest ticket item.

As I said in this post here

albino boo:
There is a difference between deficit and debt. Deficit is the difference between the annual spending and tax take and debt to the overall amount of money owed. The US deficit is not currently growing but shrinking largely due to growth in the US economy. This because a lot of the deficit was cyclical in nature and came from the drop in taxes due the recession. Now the economy is on the up swing the cyclical deficit is reducing and will continue to reduce as the economy returns to more normal conditions.

Most of the current US deficit is cyclical and not structural and will reduce with improving conditions

albino boo:
If you cut the from 5 tanks to 4 you make 36 people redundant. The 4 crew members and each front line soldiers has 9 personal working behind the lines.

I was more referring to the actual tank itself rather then the crews.
If you make 5 tanks one year and 4 the next, you'd still have 9 ready for deployment.
Given the number of tanks the US has, I'd say the number of tanks sent out to combat zones is lower then the number made each year, not including the ones in storage from previous years.

Further more even if you entirely eliminated the US defence budget it still would not cover the cost of the US welfare budget as is currently. The opponents of military spending often give the figure of 57% of the budget being spent on defence but what they miss out is the fact its 57% of discretionary spending that the military accounts for, i.e in the annually passed budget. When you add in the mandated spending, defence falls to 19~20% of the budget whereas medicaid and social security make up~40-41% of US spending. Thats the reason why welfare is hit, its just simply the biggest ticket item.

And what is that 57% discretionary sent towards? Just if that sending is discretionary and not actively needed by the military, then there is a ripe target for cuts.
While I get that Welfare is a major cost, it'd say it is more worthwhile to sociality then building more and more weapons.

As I said in this post here

albino boo:
There is a difference between deficit and debt. Deficit is the difference between the annual spending and tax take and debt to the overall amount of money owed. The US deficit is not currently growing but shrinking largely due to growth in the US economy. This because a lot of the deficit was cyclical in nature and came from the drop in taxes due the recession. Now the economy is on the up swing the cyclical deficit is reducing and will continue to reduce as the economy returns to more normal conditions.

Most of the current US deficit is cyclical and not structural and will reduce with improving conditions

Fair enough, I was just making the point that a way to help reduce it might be to dial back the spending in the Military.

Diablo1099:

albino boo:
If you cut the from 5 tanks to 4 you make 36 people redundant. The 4 crew members and each front line soldiers has 9 personal working behind the lines.

I was more referring to the actual tank itself rather then the crews.
If you make 5 tanks one year and 4 the next, you'd still have 9 ready for deployment.
Given the number of tanks the US has, I'd say the number of tanks sent out to combat zones is lower then the number made each year, not including the ones in storage from previous years.

Further more even if you entirely eliminated the US defence budget it still would not cover the cost of the US welfare budget as is currently. The opponents of military spending often give the figure of 57% of the budget being spent on defence but what they miss out is the fact its 57% of discretionary spending that the military accounts for, i.e in the annually passed budget. When you add in the mandated spending, defence falls to 19~20% of the budget whereas medicaid and social security make up~40-41% of US spending. Thats the reason why welfare is hit, its just simply the biggest ticket item.

And what is that 57% discretionary sent towards? Just if that sending is discretionary and not actively needed by the military, then there is a ripe target for cuts.
While I get that Welfare is a major cost, it'd say it is more worthwhile to sociality then building more and more weapons.

As I said in this post here

albino boo:
There is a difference between deficit and debt. Deficit is the difference between the annual spending and tax take and debt to the overall amount of money owed. The US deficit is not currently growing but shrinking largely due to growth in the US economy. This because a lot of the deficit was cyclical in nature and came from the drop in taxes due the recession. Now the economy is on the up swing the cyclical deficit is reducing and will continue to reduce as the economy returns to more normal conditions.

Most of the current US deficit is cyclical and not structural and will reduce with improving conditions

Fair enough, I was just making the point that a way to help reduce it might be to dial back the spending in the Military.

Infantry without support has no firepower and is just an expensive unemployment benefit. If there is no need for fuel truck drivers, mechanics and tank transporter crews then you may as well fire them. Turning those people in infantry does not add to the military effectiveness of the army.

The annually passed US bduget is know as discretionary because it not mandated by other laws i.e at the discretion of the house. The US system is stuck in aspic from the 18th century and is version of the British system from that period. They replaced the King with a president with the same role that the King used to play in the early 18th century. The British system evolved, in line with most other democracies, to the executive setting the budget annually. If the US government spending was described in the same manner as European government spending, the US defence spending would 20% of the budget. The discretionary spending title comes the historic quirks of language in the US government.

albino boo:
Infantry without support has no firepower and is just an expensive unemployment benefit. If there is no need for fuel truck drivers, mechanics and tank transporter crews then you may as well fire them. Turning those people in infantry does not add to the military effectiveness of the army.

Again, The US Military still has it's tanks, both in active service and in reserve.
All I was suggesting that the amount of new tanks being made would be slightly reduced.
If you have a barrel of say 100 apples and you get 5 apples each month, which is then reduced to 4, you still have a crap ton of apples.
Crews, Infantry, Support, all that stuff doesn't change, the only thing that changes is pool where they get the tanks to be deployed from gets a handful fewer tanks.

The annually passed US bduget is know as discretionary because it not mandated by other laws i.e at the discretion of the house. The US system is stuck in aspic from the 18th century and is version of the British system from that period. They replaced the King with a president with the same role that the King used to play in the early 18th century. The British system evolved, in line with most other democracies, to the executive setting the budget annually. If the US government spending was described in the same manner as European government spending, the US defence spending would 20% of the budget. The discretionary spending title comes the historic quirks of language in the US government.

Alright, but what is the non-mandated by law spending going towards?

Some taxes need to rise, some spending needs to be cut, and minimum wage going up would also increase tax revenue for a number of reasons so that should probably happen.

Diablo1099:

albino boo:
Infantry without support has no firepower and is just an expensive unemployment benefit. If there is no need for fuel truck drivers, mechanics and tank transporter crews then you may as well fire them. Turning those people in infantry does not add to the military effectiveness of the army.

Again, The US Military still has it's tanks, both in active service and in reserve.
All I was suggesting that the amount of new tanks being made would be slightly reduced.
If you have a barrel of say 100 apples and you get 5 apples each month, which is then reduced to 4, you still have a crap ton of apples.
Crews, Infantry, Support, all that stuff doesn't change, the only thing that changes is pool where they get the tanks to be deployed from gets a handful fewer tanks.

The annually passed US bduget is know as discretionary because it not mandated by other laws i.e at the discretion of the house. The US system is stuck in aspic from the 18th century and is version of the British system from that period. They replaced the King with a president with the same role that the King used to play in the early 18th century. The British system evolved, in line with most other democracies, to the executive setting the budget annually. If the US government spending was described in the same manner as European government spending, the US defence spending would 20% of the budget. The discretionary spending title comes the historic quirks of language in the US government.

Alright, but what is the non-mandated by law spending going towards?

The last time the US let a new tank contract was over 25 years ago and things have mechanical life. The defence projects from the the late 70s and 80s have reached the end of their useful life and need to be replaced on a one to one bases.

The difference between discretionary and nondiscretionary is purely administrative. The US defence budget is one of the few things that falls only the in discretionary section which is why its takes such a large chunk of spending. All other areas of spending fall across both parts of government spending. Welfare accounts for 20% of discretionary spending but 40% of total spending. Congress has historically kept tight control over military spending because if fears of an overmighty executive branch and now its become convention that the US defence budget is voted on annually rather than having single bills funding specific things.

thaluikhain:

Diablo1099:
Provided the GOP and the Tea Party break apart from edging each other out to the Right, it could happen.
The biggest thing would be Military Spending though, a few less tanks and contracts would go a long way to balancing the books.

They set it up to avoid that, though. For example, big contracts with parts made in many states. You cancel that, and lots of governors would be angry about losing jobs. So you keep building them, regardless of need.

There is also the problem that they don't want these companies to sell top of the line military hardware outside of the US. That is why Congress for example bought an order of tanks (I think it was 500) that even the Army didn't want.

albino boo:
The last time the US let a new tank contract was over 25 years ago and things have mechanical life. The defence projects from the the late 70s and 80s have reached the end of their useful life and need to be replaced on a one to one bases.

Fair enough, I can agree with you there on the Shelf Life, but that's why I kinda want to see a limit on production, so the US gets the tanks they need but not so many that they just rust and take up space.

The difference between discretionary and nondiscretionary is purely administrative. The US defence budget is one of the few things that falls only the in discretionary section which is why its takes such a large chunk of spending. All other areas of spending fall across both parts of government spending. Welfare accounts for 20% of discretionary spending but 40% of total spending. Congress has historically kept tight control over military spending because if fears of an overmighty executive branch and now its become convention that the US defence budget is voted on annually rather than having single bills funding specific things.

I was more referring to what the spending was on, Weapons, research, stuff that might be able to be cut, but fair enough.

Ryotknife:
There is also the problem that they don't want these companies to sell top of the line military hardware outside of the US. That is why Congress for example bought an order of tanks that even the Army didn't want.

So these companies can sorta "Blackmail" Congress into getting them to buy tanks?
(Or they just cut favors to their donors)

Diablo1099:

albino boo:
The last time the US let a new tank contract was over 25 years ago and things have mechanical life. The defence projects from the the late 70s and 80s have reached the end of their useful life and need to be replaced on a one to one bases.

Fair enough, I can agree with you there on the Shelf Life, but that's why I kinda want to see a limit on production, so the US gets the tanks they need but not so many that they just rust and take up space.

The difference between discretionary and nondiscretionary is purely administrative. The US defence budget is one of the few things that falls only the in discretionary section which is why its takes such a large chunk of spending. All other areas of spending fall across both parts of government spending. Welfare accounts for 20% of discretionary spending but 40% of total spending. Congress has historically kept tight control over military spending because if fears of an overmighty executive branch and now its become convention that the US defence budget is voted on annually rather than having single bills funding specific things.

I was more referring to what the spending was on, Weapons, research, stuff that might be able to be cut, but fair enough.

Ryotknife:
There is also the problem that they don't want these companies to sell top of the line military hardware outside of the US. That is why Congress for example bought an order of tanks that even the Army didn't want.

So these companies can sorta "Blackmail" Congress into getting them to buy tanks?
(Or they just cut favors to their donors)

Less blackmail and more "hey, we give millions to your reelection fund." So....bribes. Government contracts are extremely lucrative, that is why those companies don't try to sell outside of the US. US doesn't want its modern hardware in the hands of every yahoo with a checkbook, and im not sure how much control the government actually has over the companies that produce hardware.

Also, politics.

http://www.huffingtonpost.com/2013/04/28/abrams-tank-congress-army_n_3173717.html

Niether party wants to piss off Ohio, which is one of the most important battleground states in presidential elections as they can go either way. People losing high quality jobs tends to make them pissed, even if it is for the best.

EDIT: don't get me wrong I support military cuts, but its not as easy as you may think.

Ryotknife:
Less blackmail and more "hey, we give millions to your reelection fund." So....bribes. Government contracts are extremely lucrative, that is why those companies don't try to sell outside of the US. US doesn't want its modern hardware in the hands of every yahoo with a checkbook, and im not sure how much control the government actually has over the companies that produce hardware.

Also, politics.

http://www.huffingtonpost.com/2013/04/28/abrams-tank-congress-army_n_3173717.html

Niether party wants to piss off Ohio, which is one of the most important battleground states in presidential elections as they can go either way.

Man, I'm really hoping that Wolf-PAC thing to get money out of Politics works...

Diablo1099:

albino boo:
The last time the US let a new tank contract was over 25 years ago and things have mechanical life. The defence projects from the the late 70s and 80s have reached the end of their useful life and need to be replaced on a one to one bases.

Fair enough, I can agree with you there on the Shelf Life, but that's why I kinda want to see a limit on production, so the US gets the tanks they need but not so many that they just rust and take up space.

The difference between discretionary and nondiscretionary is purely administrative. The US defence budget is one of the few things that falls only the in discretionary section which is why its takes such a large chunk of spending. All other areas of spending fall across both parts of government spending. Welfare accounts for 20% of discretionary spending but 40% of total spending. Congress has historically kept tight control over military spending because if fears of an overmighty executive branch and now its become convention that the US defence budget is voted on annually rather than having single bills funding specific things.

I was more referring to what the spending was on, Weapons, research, stuff that might be able to be cut, but fair enough.

Ryotknife:
There is also the problem that they don't want these companies to sell top of the line military hardware outside of the US. That is why Congress for example bought an order of tanks that even the Army didn't want.

So these companies can sorta "Blackmail" Congress into getting them to buy tanks?
(Or they just cut favors to their donors)

The world isn't static. If you cut back on research people will die. The latest russian RPG can penetrate the front armor on modern western tanks. The RPG 30 is now turning up in the hands of Islamic militants in the middle east. Both the British and Americans have lost tanks due the RPG30 in Iraq. The Israelis launched an air strike on Syrian transfers of the RPG30 to Hezbollah last year. Now rather build an entirely new tank with thicker armor, research has enabled the building a device to shoot the RPG30 before it hits the tank. The F35 fighter is the result of exercises against the S300 sam system at the end of the cold war. The S300 now appears in the inventory of Iran, Pakistan, Syria and Siberia. None of whom would be said to friends of the US.

The vast majority of the US defence budget goes on running costs. Employing 1,429,995 people isn't cheap and then there is the civilian support staff that do all the purchasing of equipment and supplies. The big ticket item in the US budget at the moment is Afghanistan, bombs and shells aren't cheap but bombs and shells are better than body bags. The heart of western military strategy for the 70 years it that its better to fight with machines, and to spend money that entails, rather than to spend lives to achieve the same aim. The major research project that the US has at the moment is a limited missile defence system. The number of nations with missile technology capable of hitting the US and that are potentially nuclear capable is going to go up over the next 10-15 years. North Korea are almost there now and Iran is possibility to do so within the next 7 years or so. There is an increasing threat from tin pot nations like North Korea. How much do you think and extra $5 dollars on your welfare check is worth compared to neutralising the threat from a crazed 25 year old that machines guns his ex girlfriend and executes his uncle.

Companies don't have to blackmail anyone to get congress to vote for spending. As a consequence of annual votes on the budget, each member of congress has to vote keep open the defence plants in their own constituency. If they vote to cut spending that would close the plant, all those people who lost their jobs and their families are going to vote for the other guy.

First we should cancel all aid money to countries that hate us and knowingly support terrorists. That would be a good start.

Second we need to cut some fat in defense. We can cut up to I believe 200 billion and not notice a change in our readiness.

Third we need to cut stupid entitlements. Welfare needs a HUGE overhaul because its stupidly abused. Drug screenings and such for people on welfare. What you can and cant buy with EBT cards. I saw a lady buy booze and lobster with an EBT card.

Fourth Lower taxes on the middle and lower class. Lower Corporate taxes as we have the highest tax in the world and we wonder why businesses leave the country. It doesn't matter how much you tax the rich it doesn't do anything to them. You could tax every rich person in the US at 100% and only have enough money to run the government for a few days.

Get rid of Obamacare. Suck it up its a huge failure and full of wasteful spending. Don't try to deny it.

This is just a start.

When asking this question, you kind of need to ask a more specific question: which taxes do you raise?

For example, there's four main kinds of federal-level taxation: income, payroll (SS, unemployment insurance, Medicare, etc.), excise (gasoline and other specified goods), and tarriffs (imports).

I think a good place to start would be to remove the $250,000 cap on payroll so that it covers all incomes consistently (you can make $1,000,000,000+ a year and your payroll deduction will be as if you only made $250,000)

Income taxes are also too low, particularly on the middle class and above.

On the spending side, some departments could be consolidated, but the over-reliance on contractors (who are more expensive) and underfunding of other departments actually costs more than it saves (the workload doesn't change). Social programs should go back to total federal control thus reducing the administrative costs on the state level. Military reductions certainly could also help, but should be delayed until the larger economy improves.

Rayne360:
First we should cancel all aid money to countries that hate us and knowingly support terrorists. That would be a good start.

Second we need to cut some fat in defense. We can cut up to I believe 300 billion and not notice a change in our readiness.

Third we need to cut stupid entitlements. Welfare needs a HUGE overhaul because its stupidly abused. Drug screenings and such for people on welfare. What you can and cant buy with EBT cards. I saw a lady buy booze and lobster with an EBT card.

Fourth Lower taxes on the middle and lower class. Lower Corporate taxes as we have the highest tax in the world and we wonder why businesses leave the country. It doesn't matter how much you tax the rich it doesn't do anything to them. You could tax every rich person in the US at 100% and only have enough money to run the government for a few days.

Get rid of Obamacare. Suck it up its a huge failure and full of wasteful spending. Don't try to deny it.

This is just a start.

Err the US defence budget is only $660 billion you cant cut half without massive capability loss.

albino boo:

Rayne360:
First we should cancel all aid money to countries that hate us and knowingly support terrorists. That would be a good start.

Second we need to cut some fat in defense. We can cut up to I believe 300 billion and not notice a change in our readiness.

Third we need to cut stupid entitlements. Welfare needs a HUGE overhaul because its stupidly abused. Drug screenings and such for people on welfare. What you can and cant buy with EBT cards. I saw a lady buy booze and lobster with an EBT card.

Fourth Lower taxes on the middle and lower class. Lower Corporate taxes as we have the highest tax in the world and we wonder why businesses leave the country. It doesn't matter how much you tax the rich it doesn't do anything to them. You could tax every rich person in the US at 100% and only have enough money to run the government for a few days.

Get rid of Obamacare. Suck it up its a huge failure and full of wasteful spending. Don't try to deny it.

This is just a start.

Err the US defence budget is only $660 billion you cant cut half without massive capability loss.

Sorry I meant to put 200. But still there is a lot of waste in our budgets. Tons of money isn't appropriated efficiently, a lot of it wasted on stupid crap. There needs to be massive budget overhaul and a amendment to the constitution that requires as balanced budget is a good idea. When a congress fails to balance they budget then they would be in violation of the constitution

The Gentleman:
When asking this question, you kind of need to ask a more specific question: which taxes do you raise?

For example, there's four main kinds of federal-level taxation: income, payroll (SS, unemployment insurance, Medicare, etc.), excise (gasoline and other specified goods), and tarriffs (imports).

I think a good place to start would be to remove the $250,000 cap on payroll so that it covers all incomes consistently (you can make $1,000,000,000+ a year and your payroll deduction will be as if you only made $250,000)

Income taxes are also too low, particularly on the middle class and above.

On the spending side, some departments could be consolidated, but the over-reliance on contractors (who are more expensive) and underfunding of other departments actually costs more than it saves (the workload doesn't change). Social programs should go back to total federal control thus reducing the administrative costs on the state level. Military reductions certainly could also help, but should be delayed until the larger economy improves.

Congratulations you have just moved the head office of every major company out of the US. The united states isn't the only game in town and companies and people are mobile and they can take their money elsewhere. If you have two identical properties why are you are going to pick the one that charges the most rent?

Contractors are used because they are cheaper. Contractors do not accrue pension rights, sick pay health benefits or maternity rights. They can also be fired with a few weeks notice. They get more money upfront but they have to take the risk if they break a leg they don't get paid.

albino boo:
There is a difference between deficit and debt. Deficit is the difference between the annual spending and tax take and debt to the overall amount of money owed. The US deficit is not currently growing but shrinking largely due to growth in the US economy. This because a lot of the deficit was cyclical in nature and came from the drop in taxes due the recession. Now the economy is on the up swing the cyclical deficit is reducing and will continue to reduce as the economy returns to more normal conditions.

Exactly. And you can live quite happily with the present level of debt that the US has... for a while. It just narrows your room to maneuver in the next crisis.

Increasing taxes on the rich has the effect of reducing revenue. The rich are mobile and are welcome in 90% of the world and they can just leave taking their money with them. The rich also have enough money to make it worth while to employ accountants to find loopholes to reduce their tax demands. The French are implementing a 70% tax rate on high earners that has resulted in an exodus of the rich to the UK and Belgium. London has now the 4th highest number of French citizens living in a city in the world. The UK used to have a 50% top rate of tax and when it was cut to 45% the actual revenue increased because of the costs involved in tax avoidance schemes made them too expensive to be worthwhile anymore. Taxing high earners beyond a certain point actually reduces revenue rather than increasing it.

You are right about that. Unfortunately, no one knows where this 'certain point' exactly is. I would believe it is above the effective US tax rates though, and fulfilling Warren Buffet's wish of paying a higher tax rate than his secretary wouldn't be the worst way to garner some additional revenue.

Even as a conservative, I would be okay with temporarily paying higher taxes... if there were any restraint shown by our elected officials in spending said money. As it is, they spend every dime they take in, then borrow more. It's absolutely absurd.

I come from a military family, even though I haven't served myself. There's no question there's waste in the military, and they could stand some cutbacks to increase efficiency. Not huge cuts, but cuts nonetheless. But the military isn't the primary driver of the debt, entitlement spending is, and until we get some sort of handle on it, nothing is going to change, no matter how much you increase revenue.

As for the annual deficits coming down, that's true... but when you consider where they were (over $1T) and where they are now ($680B), we're still well above even the worst Bush-era deficit of $454B. Looking at the debt-to-GDP ratio paints an even worse picture. Clearly, something has to change.

Rayne360:
Third we need to cut stupid entitlements. Welfare needs a HUGE overhaul because its stupidly abused. Drug screenings and such for people on welfare. What you can and cant buy with EBT cards. I saw a lady buy booze and lobster with an EBT card.

Firstly, welfare abuse isn't nearly as big a problem as made out, in financial terms. It's a moral issue, where one abuser is seen as a bigger problem than one mistake costing 10 times the amount.

Secondly, eh, what does it matter what they spend it on? Give people money, and they'll spend it how they will. You can't make them spend money "wisely".

Third...drug screenings? For all, or a significant amount of welfare recipients? Who would pay for that, who would organise that? Also, why just them? A CEO, judge, USMC colonel, white house aide would all have much more cause to be checked for drugs, but people don't seem to want to screen them the same way.

albino boo:
Congratulations you have just moved the head office of every major company out of the US. The united states isn't the only game in town and companies and people are mobile and they can take their money elsewhere. If you have two identical properties why are you are going to pick the one that charges the most rent?

1) How? Payroll is on individuals income, not corporations.

2) Moving the head office overseas is a strategic decision that is not taken lightly, especially since the effective tax rate (not the statutory tax rate) is lower in the US than other countries due to deductions and tax credits. Not to mention potentially restricting your business due to it now falling under the laws of another country. Tax rate is not the only consideration in incorporation.

3) The "pack up my toys and leave" option is a rarely executed threat that, more often than not, isn't substantiated. For one thing, it requires shareholder approval, which means a complicated series of notices and meetings to meet the formal requirements of corporate governance. And if that vote fails, you would have to wait years to bring it up again in order to prevent a suit by shareholders. CEOs and boards can get away with a lot in corporate governance, but even some things are beyond their powers.

Contractors are used because they are cheaper.

The nicest things I can say about that is that it is heavily disputed, with some calculations finding contractors making $40-70,000 more than their federal counterparts.

Contractors do not accrue pension rights, sick pay health benefits or maternity rights.

All of which does not explain the huge discrepancy, especially since most contractors are corporations, some benefits they would be obligated to provide regardless (sick and maternity leave, most provide pensions and health insurance as well).

They can also be fired with a few weeks notice.

Unless their contract specifies otherwise. Most drafters are going to put in an early termination clause to cover losses resulting from the termination.

They get more money upfront but they have to take the risk if they break a leg they don't get paid.

Again, unless their contract specifies otherwise.

See, that's the big problem with contractors. The contract determines the terms, not the wishful thinking of the parties. Most contracts aren't going to be on a daily basis, but rather a larger term (1 month, 3 months, 1 year, 5 years, etc.). The contractor is paid for the according to the contract terms, which may or may not be based on hours worked.

chuckman1:
So I'm an american and for a few years now we've just had a growing deficit.
The economy still goes on, people keep doing their jobs. But despite that our debt as a country just keeps growing. This is kind of a problem; and not many people really care.
I'm not sure how we can get out of this debt other than raising taxes, cutting govt spending, or both.
So I'd say we should definitely raise taxes on the rich; but I'm not sure if that's enough. If it's not then everyone may have to see a tax hike to get out of the debt.

I do think the richest should get the highest tax rates because it will hurt them the least.

So what do you think? How will the United States solve our deficit/debt?
And what happens if we don't?

First of. "For a few years" is a euphemism. They've been bankrupt for decennia. They just chose not to care.

Secondly; Taxing the rich, whilst it sounds fair, could actually make the problem worse. If the rich own most of the money (which they do, by a big margin aswell), that means they do most of the spending. By taxing them, spending goes down. Spending is what capitalism thrives upon.

Cutting government spending sounds good too, however if America has to cut down on war for example, they can no longer protect their interests overseas, which will worsen their economical position aswell.

America has a big problem, and maybe people start to finally realize this cannot go on forever, however what to do about it?

Pretty much every solution to the problem may result in America losing it's position as a dominant world power.

SimpleThunda':
Secondly; Taxing the rich, whilst it sounds fair, could actually make the problem worse. If the rich own most of the money (which they do, by a big margin aswell), that means they do most of the spending. By taxing them, spending goes down. Spending is what capitalism thrives upon.

Er...is not the government going to spend the money they get from the taxes though?

SimpleThunda':
Pretty much every solution to the problem may result in America losing it's position as a dominant world power.

Not solving the problem will result in that, though.

Personally I feel it's mostly a political issue. There's no will to attack the problem in a meaningful way, I don't believe the problem would have lasted this long otherwise.

SimpleThunda':
Secondly; Taxing the rich, whilst it sounds fair, could actually make the problem worse. If the rich own most of the money (which they do, by a big margin aswell), that means they do most of the spending. By taxing them, spending goes down. Spending is what capitalism thrives upon.

Not really. Putting money in the hands of the poor ensures they put the money back into the economy. Tax breaks for the rich and the like allow them to amass more money that remains unused. Basically, trickle-down-economics is backwards because the rich don't buy that many yachts to make up for the damage these policies do.

thaluikhain:

Er...is not the government going to spend the money they get from the taxes though?

Yes. On paying back their loans. So that money would be leaving America.

Skeleon:

SimpleThunda':
Secondly; Taxing the rich, whilst it sounds fair, could actually make the problem worse. If the rich own most of the money (which they do, by a big margin aswell), that means they do most of the spending. By taxing them, spending goes down. Spending is what capitalism thrives upon.

Not really. Putting money in the hands of the poor ensures they put the money back into the economy. Tax breaks for the rich and the like allow them to amass more money that remains unused. Basically, trickle-down-economics is backwards because the rich don't buy that many yachts to make up for the damage these policies do.

With the "rich" I am talking about companies and cooperations (owners). The kind of which own more than half of all the wealth America possesses. Taxing anything else is almost a waste of PR, since nothing the lower classes and middle classes can cough up will come close to mending the U.S.A.'s debt.

SimpleThunda':

thaluikhain:

Er...is not the government going to spend the money they get from the taxes though?

Yes. On paying back their loans. So that money would be leaving America.

Kind of. Only about a third of the US federal debt is held by foreign countries.

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