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Originally Posted by rubicon
As the pundits like to remind us "the devil is in the details". To suggest that its simply arithmetic is to take "the political bait."
Raising taxes whether federal or state has repeatedly demonstrated that the rich simply get more creative with tax loops or simply move, the poorer cry poverty and the middle class get stuck.
The key to prosperity is "productivity" With so many people collecting freebie from the government without paying any taxes is a tremdous drain on our budget (Of course I exclude social security medicare, etc where people in good faith paid into the system). Add to that fraud and bid rigging of government contracts and those issues alone sink any budget. but there is no incentive to fight fraud because gets votes ( so many of thses dubious receipents have been recorded calling it Obama money) but it easily could be Bush money,, etc because the government refuses to gert serious about fighting fraud. In the insurance industry I have seen fraud programs that are very workable and result in effective returns. However the insurance companies have incentives such as demands made by the departmens of insurance and of course their profit line. government doesn't have a profit line. It has taxpayers. so a program goes into effect without any serious discussion of fraud.
Finally we have the issues of pork and boondoggles neither of which politicians want to lose.
Essentially without any present changes in current tax policy effective changes to the above would result in substantial savings and a postive bottom line. Politicians are lazy and resistent to anything that complicates their view of thw world. IMHO taxes can and should be reduced forcing politicians to become prudent spenders of tax payers funds
I opine you decide
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I not only have no argument with all that you said, but I agree completely!
But let me be specific on taxes. Specific in the concept that getting entitlements and continuing to be big brother to the world must come with some shared responsibility--increased taxes. But that doesn't necessarily mean that tax revenues have to be substantially higher. What I believe it does mean is that the U.S. tax system must be reformed. Here are some things that I think could be done to reform our tax policy, and possibly increase revenues, although that wouldn't be a requirement in my mind.
- An absolute requirement that Congress consider and approve a budget for the federal government by a date certain every single year. One way to do this might be to prohibit that passage of any spending bills if a budget is not in force.
- Make some sort of pay-go rule permanent. That is, any spending legislation would be required to be "scored" as revenue neutral by the GAO.
- Eliminate all corporate tax loopholes, credits, deductions and other benefits. There will be some babies thrown out with this bath water, but it simply has to be done.
- Increase the personal tax rates on the wealthiest 2-3% of American income earners.
- Reduce the corporate income tax rate. The first two steps should essentially make these cuts revenue neutral.
- Somehow re-do the tax code to remove the financial incentive for U.S. companies to move operations offshore. Maybe that means that any earnings reported from foreign subsidiaries are taxed, but there may be other ways to remove the incentives to move offshore.
- Eliminate some of the currently allowed personal tax deductions such as the deduction for mortgage interest and a very low limit on charitable contributions.
- Modify the tax rates and code so that every income earner with gross income above the poverty rate would pay some modest level of income taxes.
I'm sure there may be other modifications to the IRS Code that could be designed, but these are some that I might suggest.
Then on to spending cuts. Without going into detail, here are a few that seem to be calling out for Congressional approval.
- A flat 10% cut of every single federal budget.
- A thorough review of the federal organization with objective of eliminating departments and agencies with duplicative or overlapping objectives. This would be in addition to the across-the-board budget reductions.
- Reduce the defense budget by eliminating the programs that are no longer strategically necessary and particularly that defense sending demanded by Congress but not requested by the Pentagon.
- The cost of entitlements must be reduced. A couple good starts might be means testing both Social Security and Medicare. A serious program to reduce fraud calls out for approval. It might start with some serious penalties for those committing fraud--like serious jail time and lifetime removal of medical license. Another candidate for reduction/elimination is on the Congress docket right now. I'd suggest eliminating the food stamp program over about a ten-year period.
So no, I haven't taken anyone's " political bait". The arithmetic is my own. The arithmetic is the same as will be used by the lenders who have been financing our terribly unbalanced federal budgets. And if we don't do some of these things now, our lenders--most likely China--will do them for us.