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Stockman: Tax Hikes For All A Must  
User currently offlineAaron747 From Japan, joined Aug 2003, 8021 posts, RR: 26
Posted (3 years 8 months 3 weeks 3 days 20 hours ago) and read 2755 times:

Well, now President Reagan's former OMB director has come out on 60 Minutes tonight saying that both the Democrats and GOP have got it all wrong - the government is headed into the toilet unless all taxes go up, and now. According to him, even with drastic spending cuts a tax hike would still be necessary to avoid future insolvency. What a mess...the last 25 years of ineptitude and graft, thanks largely to greedy public sector administrators and their politician overlords, has put us in this position.

STAHL: Well, you've come out and said that all the Bush tax cuts should be eliminated. Not just on the rich, but on the middle class as well. Explain why.

STOCKMAN: Well, we just can't afford them. We couldn't afford them when they were adopted in 2001 and 2003. Since then, we've had two giant unfinanced wars, a huge bailout of Wall Street. This trillion-dollar stimulus program, and we have now created so much national debt, and such large permanent deficits that we're going to have to do some very difficult and painful things to close the gap, or we're going to destroy the economy, and render the federal government insolvent. As hard as that is to believe, we're edging in that direction.


http://www.cbsnews.com/8301-504803_162-20021193-10391709.html


If you need someone to blame / throw a rock in the air / you'll hit someone guilty
113 replies: All unread, showing first 25:
 
User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 1, posted (3 years 8 months 3 weeks 3 days 18 hours ago) and read 2732 times:

I have for a long time thought that the USA simply has to move in the direction of a VAT (value added tax) of some kind, similar to what Canada and I believe pretty much all of Europe have in place. Introduction of a VAT, properly done, can result in a lowering of overall income tax rates and/or payroll taxes. VATs are enormous cash cows, front and centre, and IMHO, are 'good' taxes in that the very wealthy and the merely wealthy, pay more per capita, sine they spend more and tend to have more expensive tastes than us plebes.

With the introduction of the GST (Goods and Services Tax) in Canada in 1993 at 7%, there was a lot of uproar. It was a visible tax, added to the sale price, as opposed to a number of hidden taxes that were eliminated at the same time. Also, an offset program was instituted for lower-income citizens wherein they got quarterly cheques to offset their somewhat higher costs. A mistake was the amount of paperwork imposed on small business owners, which to my understanding has been streamlined somewhat with the HST (Harmonised Sales Tax) which combines the original GST + any provincial sales taxes in effect. The GST component, b.t.w, has been reduced over time to 5%.

The other observation I'd make about the American economic situation is that, and I may very well be wrong, it seems to me that the plurality of Americans want their Social Security, they want their Medicaid/Medicare, they want good VA care for vets, a strong military, good schools, etc. - but no one wants to pay the real cost. All of this is expensive. Politicians see this and of course offer to balance the books and lower taxes, so that 'people can decide to spend their money as they see fit'.

Hence the dilemma facing America today, I think. without getting finances in order and soon, I would expect serious devaluation of the greenback, which will spur inflation. That might be one way to reduce the real amount of the overall foreign debt and also at least temporarily spur exports and curb imports, but I've always tended to think that a strong, or at minimum stable currency is in everyone's overall best interest.

It will be interesting to see what happens in the USA going forward.



Nostalgia isn't what it used to be.
User currently offlineQuokka From , joined Dec 1969, posts, RR:
Reply 2, posted (3 years 8 months 3 weeks 3 days 17 hours ago) and read 2722 times:

Quoting connies4ever (Reply 1):
are 'good' taxes in that the very wealthy and the merely wealthy, pay more per capita,


There are those who argue that VAT (GST) is regressive in that people on lower incomes may end up paying a higher proportion of their income. This is because the greater your income, the more optional spending becomes, whereas if you only have a low income, by the time you pay mortgage/ rent, water, electricity, food, there isn't that much left for discretionary spending. Those on higher incomes may "spend" more in transactions that don't attract tax - like purchasing shares, speculating on the currency market, etc. To counteract this regressive feature, many countries (including Australia) have exempted basic food items and power from the VAT (GST). So yes, on a per capita basis the rich may pay more tax than the poor, but is debatable whether they pay more as a proportion of disposable income.

An advantage of VAT (GST) is that it makes tax avoidance and evasion a bit more difficult, though not impossible.


User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 3, posted (3 years 8 months 3 weeks 3 days 16 hours ago) and read 2693 times:

Quoting Quokka (Reply 2):
Those on higher incomes may "spend" more in transactions that don't attract tax - like purchasing shares, speculating on the currency market, etc. To counteract this regressive feature, many countries (including Australia) have exempted basic food items and power from the VAT (GST).

For the original GST, now HST, in Canada, services were taxed at the same rate as everything esle. So purchasing shares either through an investment firm or directly from the seller, is deemed a service and therefore subject to tax. So there really wasn't much getting around it.

As I indicated in my 1st post, lower income people/families got a quarterly rebate from the government to partially defray GST-related costs. At the same time as the GST came in, personal deductions on income tax were raised such that several hundred thousand people were effectively removed from the group of people actually paying income tax.



Nostalgia isn't what it used to be.
User currently offlinecomorin From United States of America, joined May 2005, 4895 posts, RR: 16
Reply 4, posted (3 years 8 months 3 weeks 3 days 16 hours ago) and read 2693 times:

Excellent comments from someone who has on axe to grind. The most chilling part of the interview is when he explains to Leslie Stahl that the economy has recovered, and this is it! It will take along time for unemployment to come down. Stockman points out that the 30-year party is over.

Perhaps the simple folk of the Tea Party knew this all along in their gut and that's why they're mad as hell? Trouble is, there is no solution:

1. Devaluing the dollar means raw materials costs go up = inflation.
2. Inflation means home prices go up - a good thing?
3. Cut "Govt Waste"? a drop in the bucket compared to Defense + SS/Medicare.
4. Flooding the market with dollars hasn't helped - cheap money is getting hoarded by Corporations and not spent, and Banks not extending credit either.



We are approaching coffin corner....


User currently offlineDfwRevolution From United States of America, joined Jan 2010, 960 posts, RR: 51
Reply 5, posted (3 years 8 months 3 weeks 3 days 16 hours ago) and read 2689 times:

Quoting Aaron747 (Thread starter):
What a mess...the last 25 years of ineptitude and graft, thanks largely to greedy public sector administrators and their politician overlords, has put us in this position.

The two biggest problems we face are the outstanding liabilities to cover social security and Medicare benefits. They dwarf all other budget problems by an order of magnitude. And this did not start in the last 25 years.

Raising taxes alone won't solve the problem. There must be drastic cuts in the federal budget ASAP.


User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 6, posted (3 years 8 months 3 weeks 3 days 15 hours ago) and read 2672 times:

Quoting comorin (Reply 4):
1. Devaluing the dollar means raw materials costs go up = inflation.
2. Inflation means home prices go up - a good thing?
3. Cut "Govt Waste"? a drop in the bucket compared to Defense + SS/Medicare.
4. Flooding the market with dollars hasn't helped - cheap money is getting hoarded by Corporations and not spent, and Banks not extending credit either.

1 - Yes, there will be rising prices on imported goods, which should accelerate the Buy American trend, hopefully putting more people to work, and make exports cheaper, again hopefully putting more people to work. This is a fairly short-term 'solution', longer term the structural problems in the revenue/spending arena need to be addressed.
2 - CDN $ will be loosely tied to the Ameribuck, and Canadian softwood lumber is a big input to new builds, so the price might not rise as much as inflation, and particularly so with 3M or so unsold new homes on the market acting as a drag on price increases.
3 - There is always room for efficiency, but that generally translates into layoffs, which means more noses at the trough of unemployment insurance etc.
4 - There is no doubt the banks are sitting on a wad of cash, in fact I don't think American banks have ever been this liquid. I think the stimulus has helped, but that the message has been drowned out:

http://www.theatlantic.com/business/...-about-major-economic-facts/65397/

Quoting DfwRevolution (Reply 5):
Raising taxes alone won't solve the problem. There must be drastic cuts in the federal budget ASAP.

What was done in Canada in the 90s and could be done by the USA now is to move several government services out of the public service arena and putting them on a for fee basis. Not a tax, but a fee for service. if you don't want the service, you don't pay and don't get. Spending cuts yes, this would be a real fur fight but a discussion that needs to take place.



Nostalgia isn't what it used to be.
User currently offlinedxing From , joined Dec 1969, posts, RR:
Reply 7, posted (3 years 8 months 3 weeks 3 days 15 hours ago) and read 2662 times:

Quoting Aaron747 (Thread starter):
What a mess...the last 25 years of ineptitude and graft, thanks largely to greedy public sector administrators and their politician overlords, has put us in this position.

It goes back farther than that Aaron. It goes almost directly back to 1967 and the start of the unified budget. Also the last year we didn't have a deficit minus 1995-2000. I watched the report and had to disagree on a couple of his points. He said if locked in a room the GOP couldn't come up 50 billion in cuts. That is incorrect as they have already said stimulus spending under the American Reinvestment and Recovery Act needs to stop. That alone is worth 50 billion and doesn't even begin to scratch the health care law spending. He said that both parties are comfortable with a 24% GDP as well as SS and Medicare spending which is simply not true. He used the same tired explanation of how the wealthy have gotten wealthier as if they took the money from the poor in a closed pie system. He advocated a 15% surtax on wealthy individuals that he says might cut the public debt by 50%. While that might be true unless substantive spending cuts are enacted, as well as refinance and reorginization of the public entitlement programs and a balanced budget amendment enacted the surtax would all be for nought as the debt would immediately begin to acrue again. Finally he demonized those that advocate tax cuts and actually presented nothing new other than higher percentages of what has already been discussed, namely raising taxes and cutting spending.

Quoting connies4ever (Reply 1):
I have for a long time thought that the USA simply has to move in the direction of a VAT

Agree 100% but only after the 16th amendment (income taxes) has been repealed and discarded forever. I believe a VAT is now the only way to be able to balance the books on a year by year basis.

Quoting Quokka (Reply 2):
This is because the greater your income, the more optional spending becomes, whereas if you only have a low income, by the time you pay mortgage/ rent, water, electricity, food, there isn't that much left for discretionary spending.

Since a majority of persons in this country don't pay any income tax now that really doesn't apply here. Now don't read that the wrong way. Everyone with a job making above a certain amount has income taxes withheld from their checks but at the end of the year when they file, through the use of the earned income tax credit as well as other programs mean that they get a refund of all that they paid in, and in some specific cases more than they paid in in withholding. If you take into account food stamps and other entitlement programs .

Quoting Quokka (Reply 2):
So yes, on a per capita basis the rich may pay more tax than the poor, but is debatable whether they pay more as a proportion of disposable income.

I would disagree since the rich don't buy the generic corn flakes and the poor don't buy the Chilean wine. The rich aren't using medicare and the poor aren't getting a whole lot of optional plastic surgery.

Quoting Quokka (Reply 2):
An advantage of VAT (GST) is that it makes tax avoidance and evasion a bit more difficult, though not impossible.

Correct and it can virtually eliminate one of the bigger departments in the government saving even more money.


User currently offlineDfwRevolution From United States of America, joined Jan 2010, 960 posts, RR: 51
Reply 8, posted (3 years 8 months 3 weeks 3 days 14 hours ago) and read 2654 times:

Quoting connies4ever (Reply 6):
What was done in Canada in the 90s and could be done by the USA now is to move several government services out of the public service arena and putting them on a for fee basis. Not a tax, but a fee for service. if you don't want the service, you don't pay and don't get. Spending cuts yes, this would be a real fur fight but a discussion that needs to take place.

I am a HUGE proponent of this approach, but I also think it would just scratch the surface of some of the cuts that need to be made.

Quoting dxing (Reply 7):
Correct and it can virtually eliminate one of the bigger departments in the government saving even more money.

If you are suggesting that the IRS would get smaller if we implemented a VAT then I believe you are sorely mistaken. Income taxes would not go away and you would only need more personnel to manage the collection of the VAT.


User currently offlinedxing From , joined Dec 1969, posts, RR:
Reply 9, posted (3 years 8 months 3 weeks 3 days 14 hours ago) and read 2641 times:

Quoting DfwRevolution (Reply 8):
If you are suggesting that the IRS would get smaller if we implemented a VAT then I believe you are sorely mistaken. Income taxes would not go away and you would only need more personnel to manage the collection of the VAT.

Disagree. Sales taxes are done automatically by the cash register. The IRS would not need the amount of auditors it has in its employ, specifically the additional 50K they are hiring to administer the health care portion of tax revenue. Texas does not have an income tax and government spending on the comptrollers office, responsible for collection of taxes, is pretty small compared to the rest of the budget.


User currently offlinetexan From New Zealand, joined Dec 2003, 4272 posts, RR: 52
Reply 10, posted (3 years 8 months 3 weeks 3 days 14 hours ago) and read 2625 times:

The Diane Rehm Show discussed this topic today on NPR. Thought you all might be interested in listening to the program: http://thedianerehmshow.org/shows/2010-11-01/jobs-and-us-economy

The guests were Bruce Bartlett, a former Reagan economic policy aide; James K. Galbraith, a well-known economist from The University of Texas at Austin; and Rea Hederman, a senior policy analyst at The Heritage Foundation. In other words, two conservatives and one liberal. Thought it was a pretty good discussion.

Texan



"I have always imagined that Paradise will be a kind of library."
User currently onlineseb146 From United States of America, joined Nov 1999, 11520 posts, RR: 15
Reply 11, posted (3 years 8 months 3 weeks 3 days 13 hours ago) and read 2618 times:

Quoting dxing (Reply 7):
through the use of the earned income tax credit as well as other programs mean that they get a refund of all that they paid in, and in some specific cases more than they paid in in withholding. If you take into account food stamps and other entitlement programs .

You refuse to take into account all the collateral spending for two wars and the fact that both wars are "off budget" yet you include food stamps and entitlements when accounting for the fact that some people might get more in return? Explain, please.

What gets me is: this Reagan right-winger helped put us in this position and is now saying it is all bad. But, why should these people care? Most of them are too old to care or dead what happens to us in the middle or lower incomes. All the right-wingers that insist that Christian values become a part of the party seem to have forgotten: The love of money is the root of all evil.



Life in the wall is a drag.
User currently offlinewindy95 From United States of America, joined Dec 2008, 2707 posts, RR: 8
Reply 12, posted (3 years 8 months 3 weeks 3 days 13 hours ago) and read 2606 times:

Quoting seb146 (Reply 11):
The love of money is the root of all evil.

Do not forget to deadly sins for the Progressives. Greed for other peoples money to "redistibute" and envy of the rich who they want to tax the hell out of so they can have their share owed them....



OMG-Obama Must Go
User currently offlinedxing From , joined Dec 1969, posts, RR:
Reply 13, posted (3 years 8 months 3 weeks 3 days 13 hours ago) and read 2601 times:

Quoting seb146 (Reply 11):
You refuse to take into account all the collateral spending for two wars and the fact that both wars are "off budget" yet you include food stamps and entitlements when accounting for the fact that some people might get more in return? Explain, please.

Both those wars have finite costs. They will end and the spending on them stop. Not so with entitlement programs. That's the beauty of a VAT. You can adjust the sales tax on almost an annual or even semi-annual basis to reflect unanticipated costs such as a devestating hurricane/earthquake/or major flood as well as a war. When the relief or combat is finished you can then reduce the sales tax by the corresponding amount. No arguments about varied rates or loop holes.

[Edited 2010-11-01 09:22:50]

User currently offlinewindy95 From United States of America, joined Dec 2008, 2707 posts, RR: 8
Reply 14, posted (3 years 8 months 3 weeks 3 days 13 hours ago) and read 2597 times:

Quoting dxing (Reply 13):
Not so with entitlement programs.

This where the cuts or outright elimination need to be made.



OMG-Obama Must Go
User currently offlineDfwRevolution From United States of America, joined Jan 2010, 960 posts, RR: 51
Reply 15, posted (3 years 8 months 3 weeks 3 days 13 hours ago) and read 2589 times:

Quoting dxing (Reply 9):
Disagree. Sales taxes are done automatically by the cash register. The IRS would not need the amount of auditors it has in its employ

But a VAT would not replace the income tax, it would be in addition to income taxes. To say that we could "virtually eliminate one of the bigger departments in the government" is a misnomer, IMHO.

You also have to consider that if you implement a higher sales tax, transactions have a habit of moving away from the cash register to a black/grey market.

Quoting dxing (Reply 9):
Texas does not have an income tax and government spending on the comptrollers office, responsible for collection of taxes, is pretty small compared to the rest of the budget.

Small, but greater than zero. The IRS would get bigger if we add a VAT.


User currently offlineDiamondFlyer From United States of America, joined Oct 2008, 1504 posts, RR: 3
Reply 16, posted (3 years 8 months 3 weeks 3 days 12 hours ago) and read 2564 times:

Quoting DfwRevolution (Reply 15):
But a VAT would not replace the income tax, it would be in addition to income taxes. To say that we could "virtually eliminate one of the bigger departments in the government" is a misnomer, IMHO.

I say not only no, but hell no. Either we keep the current system or ditch the 16th amendment for a VAT system. No way in hell could I support having both of them. Most of the advocacy I've seen for the VAT is based on abolishing the current mess of an income tax system.

-DiamondFlyer


User currently offlineSlider From United States of America, joined Feb 2004, 6785 posts, RR: 34
Reply 17, posted (3 years 8 months 3 weeks 3 days 12 hours ago) and read 2564 times:

Wrong as usual.

CUT SPENDING NOW.

Tax policy is almost irrelevant right now in this discussion when you consider spending that is out of control.


User currently offlinedxing From , joined Dec 1969, posts, RR:
Reply 18, posted (3 years 8 months 3 weeks 3 days 12 hours ago) and read 2553 times:

Quoting DfwRevolution (Reply 15):
But a VAT would not replace the income tax, it would be in addition to income taxes. To say that we could "virtually eliminate one of the bigger departments in the government" is a misnomer, IMHO

Which is why I said:

Quoting dxing (Reply 7):

Agree 100% but only after the 16th amendment (income taxes) has been repealed and discarded forever. I believe a VAT is now the only way to be able to balance the books on a year by year basis.

I would support the implementation of a VAT tax only after the repeal of the 16th amendment.

Quoting DfwRevolution (Reply 15):
You also have to consider that if you implement a higher sales tax, transactions have a habit of moving away from the cash register to a black/grey market.

Straw man arguement. There is no way you can black market large numbers of transactions in legal operations such as Wal Mart and other retailers where the vast majority of VAT taxes will be collected.

Quoting DfwRevolution (Reply 15):
Small, but greater than zero. The IRS would get bigger if we add a VAT.

You'll have to prove that. Simply put since the register will automatically record the VAT tax and it is passed directly on to the customer there is no incentive for a retailer to hide the tax since it does not affect the actual cost of the item to the retailer. The retailer still makes whatever profit they charge. Since it is based on a percentage of sales its eaiser to figure out than having to have armies of tax professionals reading through volumes of tax law to figure out what is taxable and what is not.


User currently offlineKen777 From United States of America, joined Mar 2004, 8184 posts, RR: 8
Reply 19, posted (3 years 8 months 3 weeks 3 days 12 hours ago) and read 2546 times:

Quoting connies4ever (Reply 1):
it seems to me that the plurality of Americans want their Social Security, they want their Medicaid/Medicare, they want good VA care for vets, a strong military, good schools, etc. - but no one wants to pay the real cost.

Bingo!

The change I'm seeing is that there are those who are willing to dump Social Security (and everyones investments in that program) and certainly see no need to have their hard earned money stolen from them to pay for Veterans care.

Quoting Quokka (Reply 2):
An advantage of VAT (GST) is that it makes tax avoidance and evasion a bit more difficult, though not impossible.

That's true, but how many countries have a GST or VAT and have actually eliminated income taxes? Or property taxes?

We also have various local level governments (state level and lower) that rely on sales taxes (at the point of sale) that need to be addressed. Part of our sales taxes are operational.

Quoting DfwRevolution (Reply 5):
Raising taxes alone won't solve the problem. There must be drastic cuts in the federal budget ASAP.

We are facing a unique situation in this election as several states (like CO & MA) have ballot questions that will cut billions out of state budgets if passed.

So we have states already making major cuts because of the Great Recession.

We see more cuts being delivered at the state level via the ballot questions.

And we have people who want dramatic cuts, like eliminating the Dept of Education - which eliminates any federal funding to states. So the burden at the state level increases as their funding decreases.

Quoting comorin (Reply 4):
Perhaps the simple folk of the Tea Party knew this all along in their gut and that's why they're mad as hell? Trouble is, there is no solution:

1. Devaluing the dollar means raw materials costs go up = inflation.
2. Inflation means home prices go up - a good thing?

A falling dollar is supposed to increase exports and decrease imports. But that obviously has limits. The lower dollar will eventually mean that the standard of living for the Average American will be reduces. As will their children.

As for home prices, the home crisis will have a long term impact on pricing for a long time to come and this is still a depressed market. We have found that deflation in home pricing is worse than inflation in many locations.

Quoting dxing (Reply 7):
It goes back farther than that Aaron. It goes almost directly back to 1967 and the start of the unified budget.

See, we can agree some something, "Ian".  

Maybe we can move back to the pre-unification days. It certainly will take away a lot of hidden realities.

Quoting dxing (Reply 7):
That alone is worth 50 billion and doesn't even begin to scratch the health care law spending.

There is no hiding health care costs. Push it back to uncontrolled private insurance and it still increases dramatically - just as it did under Bush/Cheney. When core care is covered by taxes on income & profits (which allows private companies to be very successful, BTW) you can then have restraint on costs. Until then you're screwed one way or another.

Quoting dxing (Reply 7):
Agree 100% but only after the 16th amendment (income taxes) has been repealed and discarded forever. I believe a VAT is now the only way to be able to balance the books on a year by year basis.

VAT would be in addition to income taxes. A country with a deficit like ours isn't going to drop the income tax.

Quoting dxing (Reply 9):
Sales taxes are done automatically by the cash register.

And there is some major auditing needed in order to catch fraud (which even the tooth fairy agrees happens) and ensuring correct payments are made.

Quoting seb146 (Reply 11):
But, why should these people care? Most of them are too old to care or dead what happens to us in the middle or lower incomes.

Because we have sons and daughters and grandkids. Can you find a better reason to care?

Quoting windy95 (Reply 12):
Greed for other peoples money to "redistibute" and envy of the rich who they want to tax the hell out of so they can have their share owed them....

At a macro level the redistribution of wealth in this country as been in the other direction. The distribution of the total wealth has shifted wealth from the "lower 90%" to the top 10%.


User currently offlineDfwRevolution From United States of America, joined Jan 2010, 960 posts, RR: 51
Reply 20, posted (3 years 8 months 3 weeks 3 days 12 hours ago) and read 2541 times:

Quoting dxing (Reply 18):
Which is why I said:

Quoting dxing (Reply 7):

Agree 100% but only after the 16th amendment (income taxes) has been repealed and discarded forever. I believe a VAT is now the only way to be able to balance the books on a year by year basis.

I would support the implementation of a VAT tax only after the repeal of the 16th amendment.

I realize that, but it's not of practical consequence. Repealing the 16th amendment (i.e. Fair Tax) is just not on the table. Adding a VAT to supplement the income tax is. It will probably be one of the recommendations of the deficit commission. The reason I urge caution toward a VAT is because it exposes us to the potential for a massive bait-and-switch. For example, we'll probably be told that in exchange for a low VAT rate, we can keep the Bush-era tax brackets for a few more years. But then we'll revert back to higher tax brackets anyway, and now we're stuck with a VAT.

Quoting dxing (Reply 18):
You'll have to prove that.

I don't think I needs proving that if you add a function to government, then the government gets bigger.


User currently offlinedxing From , joined Dec 1969, posts, RR:
Reply 21, posted (3 years 8 months 3 weeks 3 days 11 hours ago) and read 2532 times:

Quoting Ken777 (Reply 19):
So we have states already making major cuts because of the Great Recession.

More likely because of unfunded federal mandates and federal dollars that disappear after a few years like the stimulus funds aimed at keeping teachers and other public union employees at work. Once the stimulus money is gone the States are left with the burden of paying for these programs. Same goes with medicaid spending as it relates to Obama care. The federal government will pick up a majority of the tab for the first couple of years, and then the funding goes away and the States are left holding the bag. Why do you think there was a Louisanna purchase and Nebraska cornhusker deal?

Quoting Ken777 (Reply 19):
Maybe we can move back to the pre-unification days. It certainly will take away a lot of hidden realities.

On the budget we will have too. Unfortunately due to the borrowing that the federal government has done over the past 40 years SS and medicare are going to have to be refinanced and reorganized in order to have any hope of saving them financially. If you are talking about going back to the tax rates of the 1950's it has already been explained several times that the world is completely different now in economic terms than it was then.

Quoting Ken777 (Reply 19):
There is no hiding health care costs.

Correct but by paying only 93-97% of medicare costs and only 70% of medicaid costs the government does a beautiful job of hiding the true costs of both programs all the while cost shifting the rest to private insurers. If proper reforms and sensible oversight were employed there would be no need to change a system that works and a majority of people are happy with.

Quoting Ken777 (Reply 19):

VAT would be in addition to income taxes. A country with a deficit like ours isn't going to drop the income tax.

That is simply not true. Texas is able to balance its books as are 6 other States with no income tax.

Quoting Ken777 (Reply 19):
And there is some major auditing needed in order to catch fraud (which even the tooth fairy agrees happens) and ensuring correct payments are made.

Which can all be computer generated. As you yourself have said many of the supposed savings in medicare will come from detecting fraud. The banking reform law moves the government into just about every cash register in the country large and small and does it mostly electronically.


User currently offlineAaron747 From Japan, joined Aug 2003, 8021 posts, RR: 26
Reply 22, posted (3 years 8 months 3 weeks 3 days 11 hours ago) and read 2524 times:

Quoting dxing (Reply 7):
He used the same tired explanation of how the wealthy have gotten wealthier as if they took the money from the poor in a closed pie system.

No, I believe what he was insinuating was that those that comprised that huge sector of growth in wealth did so as part of the bubble and did not actually put anything of value into the overall system.

Quoting windy95 (Reply 14):
This where the cuts or outright elimination need to be made.

Find a single politician anywhere who is willing to take an axe to both SS and Medicare - it will never happen.

Quoting Slider (Reply 17):
CUT SPENDING NOW.

Um, as we always go round in circles on this - how, exactly? Liberals won't cut SS, both parties won't touch Medicare/Medicaid (Dems for the "moral handout" side and GOPers for the big pharma benefit), and conservatives won't cut pork projects that feed the defense complex. All of them need to be substantially cut to have any effect - who's gonna do all three??



If you need someone to blame / throw a rock in the air / you'll hit someone guilty
User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
Reply 23, posted (3 years 8 months 3 weeks 3 days 11 hours ago) and read 2514 times:

Quoting dxing (Reply 9):
Quoting DfwRevolution (Reply 8):
If you are suggesting that the IRS would get smaller if we implemented a VAT then I believe you are sorely mistaken. Income taxes would not go away and you would only need more personnel to manage the collection of the VAT.

Disagree. Sales taxes are done automatically by the cash register. The IRS would not need the amount of auditors it has in its employ, specifically the additional 50K they are hiring to administer the health care portion of tax revenue. Texas does not have an income tax and government spending on the comptrollers office, responsible for collection of taxes, is pretty small compared to the rest of the budget.

I don't think you would get rid of either the IRS or income tax with a VAT -- we didn't. But income tax rates definitely dropped, and substantial numbers were removed from the tax rolls altogether.

VAT is also not just a sales tax, it is a tax on the value added to a good or service between delivery by the supplier and sale by the vendor. So the 5% for arguments sake is applied on the difference between the $100 wholesale price and the $200 retail price. For a service it is actually just a straight sales tax.

Quoting DfwRevolution (Reply 15):
But a VAT would not replace the income tax, it would be in addition to income taxes. To say that we could "virtually eliminate one of the bigger departments in the government" is a misnomer, IMHO.

You also have to consider that if you implement a higher sales tax, transactions have a habit of moving away from the cash register to a black/grey market.

This has certainly happened in Canada. Not sure how big the grey economy is, but some estimates place it >10%.
For home handyman work, for example, one price for cash, another for a recorded transaction. As our former CFO was fond of saying, "Cash is King !"



Nostalgia isn't what it used to be.
User currently offline787atPAE From United States of America, joined Oct 2006, 143 posts, RR: 4
Reply 24, posted (3 years 8 months 3 weeks 3 days 6 hours ago) and read 2472 times:

60 Minutes is still relevant?

25 dxing : Sure it is. That is why no one should vote for a VAT tax until the 16th amendment is repealed. Only if you don't get rid of the income tax. That is w
26 PPVRA : If we the definition of "rich" that is used to support higher taxes on them, then you're not rich if you don't spend money. You're not living the pos
27 windy95 : They will have to one day. They cannot tax us enough to cover the costs of theses programs. Especially with the SS Kitty being full of IOU's. If we t
28 Post contains images BMI727 : It's already beginning I think. Before too long, dollars won't be worth the paper they're printed on. No.
29 Aaron747 : Fundamentally disagree. Lloyd Blankfein may claim that i-banking is "god's work" but I'd say the entrepreneur who gets rich developing a cutting edge
30 dxing : I spent 18 years making my living with my voice. What material attributes did I add to society? Yet I still made a pretty good buck doing voice overs
31 Post contains images Ken777 : Can you name a major country where the income tax has been eliminated with a VAT? It's far easier to name countries where the income tax has been ret
32 DocLightning : Here's a question: what would happen if we didn't? What does "insolvency" mean, practically, for the U.S.?
33 Yellowstone : This error gets repeated every time the taxation subject is brought up... Repealing the 16th Amendment will not eliminate income taxes. It will elimi
34 Post contains images dxing : Here we go again. If not to institute an income tax that is not considered a direct tax that is subject to apportionment or based on the census, what
35 Quokka : If VAT is set at a percentage rate, for arguments sake 10%, no matter what proportion of your income you spend, you are still paying at the 10% on wh
36 Aaron747 : Assuming you're talking about TV or radio, the station made ad revenue that allowed it to serve the community, as most local media entities tend to d
37 dxing : But it didn't add a single material thing of value to the world. As soon as the ad run was up the commercial was erased and gone forever save the few
38 Post contains links connies4ever : Not the experience in Canada. Income tax rate shave in fact dropped since the introduction of the GST back in the 90s. They are stable at the moment,
39 dxing : They would have gotten better without the stimulus. All it is doing is prolonging the recovery as tax policy has remained in limbo while more public
40 seb146 : So, it is okay for the Church to be socialist (re-destribute wealth) but not okay for anyone else? I think that is the best reason of all, but the ri
41 dxing : Yes because they live off of donations willingly given by individuals not by automatic withholding and threat of legal action if you don't pay.
42 windy95 : Yes because we give willingly. Not at the tip of the Roman spear. And the more the the Feds steal from me the less I have to give to the charities of
43 Post contains links windy95 : US to spend $200 mn a day on Obama's Mumbai visit Read more at: http://www.ndtv.com/article/india/us...y-on-obama-s-mumbai-visit-64106?cp More tax dol
44 Post contains links Slider : Paul Ryan's Roadmap sets the course to do all of that. http://www.roadmap.republicans.budget.house.gov/ Some tough decisions and choices certainly, b
45 DfwRevolution : It is my choice to give to the Church or not. It's even my choice to believe whether charitable giving is a moral imperative or not. Taxes are collec
46 Post contains links and images PPVRA : http://www.nytimes.com/2010/11/01/opinion/01krugman.html?_r=2 Which means sales taxes are really income taxes, and what is usually meant by income tax
47 Ken777 : And there is some big money pushing for that approach - like those in the top 10% of income. So we repeal the 16th Amendment and then the VAT is reje
48 Aaron747 : Hold up there - doesn't this suggest that there are some serious administrative woes at FBI that would need to be corrected? How about holding people
49 Post contains links dxing : It would be extremely easy to insert a provision in a law authorizing a VAT that made it dependent on repeal of the 16th amendment before the law cou
50 Post contains links Yellowstone : Notice this key phrase: incomes, from whatever source derived In other words, only certain sources of income could be taxed before the amendment. Aft
51 dxing : Yes, I know that, it is why I included the language of the amendment in my post. Pollock had put a question mark in the income tax. The 16th amendmen
52 Yellowstone : That is correct; however, they would not need that protection in order to pass an income tax on wages. Taxes on wages are indirect taxes and hence no
53 Ken777 : IIRC it was IBM that was paid to deliver and they haven't. Not the first time that private enterprise has really failed to deliver in the computer ag
54 dxing : There would be one court challange after another. Everything could be worked out and the law placed in limbo until the 16th is repealed. It is not a
55 DocLightning : I still haven't heard an answer to my question: what is the practical meaning of the US government becoming "insolvent"? The Dollar becomes worthless?
56 Aaron747 : Not worthless if that's even possible, but substantially devalued. Investing in foreign currencies is an excellent idea. I'm so glad I kept yen accou
57 Post contains images Quokka : It means that the US military becomes the property of whoever the US owes the most money to and that might be China. After all, I have been reliably
58 Aaron747 : Nonsense that's scare tactics being used by both parties - China holds about 8% of US t-bills. That's not a majority by any means.
59 Post contains images Quokka : Of course it is nonsense. That's why I added the smilie. But it does highlight some of the alarmist thinking in some circles. If the situation were t
60 Yellowstone : Stare decisis - the Supreme Court is unlikely to overturn a past ruling, and all past court rulings have determined that taxes on wage income, being t
61 Lufthansa411 : Paradoxically, the biggest holder of US debts is the US government itself, not China or anyone other country. The US government writes IOU's to itsel
62 windy95 : Smart move..Along with Gold. Silver and a mix of foreign currencies to hedge our bets...
63 windy95 : I am tired of the China boogie man. We just need to fix our problems and some jobs can come back to this country and we can slowly pay back our debt.
64 seb146 : Go down to Home Depot and count the number of people looking for work. Do you think they pay income tax? They have a choice. Look at the job seekers
65 dxing : If they do not file a tax return, even if they owe no tax, they are in violation of the law. The people that actually work at Home Depot most likely
66 moltenrock : Please place the blame where it belongs. It belongs on the heads of the Baby Boomer generation. The Baby Boomer & politicians have known since th
67 Post contains links rwessel : You don't have to file a federal income tax return if your income is below certain levels. http://www.irs.gov/publications/p501/ar01.html#en_US_publi
68 dxing : Point taken but there are enough qualifers in the table that it would eliminate most everyone. There are very few people that are going to qualify fo
69 Post contains images Aaron747 : Does that mean, as someone under 35, that I can ask every American forumer here over 50 to immediately return any SS check they receive in the future
70 Ken777 : Of course not - we paid into the system in order to receive our checks each month and we expect those checks to arrive each month. As someone under 3
71 moltenrock : You could. Or you could just tax them as they should be. Call it a "Freeloader Tax" or a "Belated Social Security Levy". People keep talking about ra
72 windy95 : How about you only take out what you paid into the system? And no no otherr generation needs to pay into the system. Stop the system and return the m
73 Ken777 : That's not the way the system works and you know it. It is program older than I am and has worked well for generations. Now we have a bunch of winger
74 moltenrock : That's only because they don't think they'll ever see the money, and actually think they are smart enough to save enough for retirement. Lot's of peo
75 BMI727 : That can't work since Social Security is basically the world's biggest ponzi scheme. Is it really that much to ask for people to take care of their o
76 Ken777 : Well, let's see: The government does help feed you - especially when it works to ensure the food is as disease free as practical. And it has helped k
77 BMI727 : I never said that safety regulations are bad, but that is where the line needs to be drawn. Safety regulations (reasonable ones anyway) are good. CAF
78 dxing : I agree one hunderd percent and I'm closer to retirement than a lot of folks here. I don't expect to be able to stop working comfortably until I am 7
79 dxing : The near term solution seems to be on the table. Extend the tax cuts to the wealthiest people temporarily for 2-3 years. Make the rest of the cuts per
80 Aaron747 : Same here. I am constantly reminded of everything I heard growing up of how we were the best, and when I encounter homeless encampments, look at the
81 moltenrock : While Singapore isn't perfect, I highly encourage you to look here for some opportunities. Lots and lots of American and European corps have their As
82 geekydude : Good to hear that. I think your case resonates very well with Jim Roger's point of view. Have you met him yet in Singapore by any chance?
83 Post contains images WarRI1 : So will I, I love these folks who would like to jump out of SS. They screw around, lose their retirement money trying to make a killing, and guess wh
84 BMI727 : No, they just wouldn't get to retire. Tough break, but it's the price you pay for making a mistake so huge as to cost you your entire savings. You ma
85 Aaron747 : Um you guys just don't get it. Trying to make a killing involves assumption of risk that comes with going after returns in the 30%+ category. If you
86 WarRI1 : We are not going back to the poor farms, someone will have to pay for the Aces of Wall Street, who lose everything. The far right, may want to go bac
87 Aaron747 : Sigh...I despise the antics by some on Wall Street as much as anyone and continually post about that ilk on these boards. But that doesn't mean the *
88 WarRI1 : I have owned stock for over 50 years, I have made money, lost money, fortunately I made more than I lost. I was in a golden age of prosperity. I save
89 BMI727 : Charity is not the same as government taking care of anyone who ever did anything stupid. As did virtually everyone who didn't act foolishly. You don
90 WarRI1 : Where? That does seems to be a problem these days, and with the jobs still leaving our shores, that maybe harder then before. Outsourcing, illegal im
91 Baroque : Yes, what a joke. I am lucky, my problem at my intolerably huge age is not finding work, but telling clients about my backlog. But most/many at may a
92 Ken777 : The stability of the system giong forward will probably depend on the integrity of politicians whose financial interest are tied to Wall Street. Unle
93 dxing : Which is true, what you get back is cheaper than if you had invested your money over the long term yourself. However the problem is, and has not been
94 Baroque : Sounds as if we all need to hire a few Norwegian pollies/actuaries as they seem among the few that seem to be managing this well. We have a fund that
95 Ken777 : Sometimes. Sometimes not. How many people really got the shaft when the DOW was more than cut in half when Bush brought us the Great Recession. And h
96 Post contains links dxing : Lets, for the sake of argument, say you started working in 1965 at 20 years of age. That would make you 65 this year. In 1965 the Dow closed the year
97 comorin : That's a 6.35% (CAGR) return, not adjusted for inflation. Assuming inflation = dividends, it''s a decent return. I think Stockman is pointing out tha
98 Post contains images WarRI1 : I think you are forgetting, it is all how you invested, you might well have gone broke long ago. You know the bubble. I know plenty of folks who took
99 BMI727 : Then do it via bonds. If you want to invest your retirement account with government infrastructure projects go ahead. Don't force everyone to, other
100 dxing : I assume you are working off the 11400 number? As I said that doesn't take into account dividends, splits, buyouts, mergers, etc. so the 6.35% would
101 comorin : Yes. The DJIA does take into account splits and mergers but does not measure total return - excludes dividends. If you assume that the dividend payou
102 windy95 : If you had invested in various markets and held on to your purchases through the bubble you would be way ahead right now. Do not uses stupidity or la
103 dxing : Ok, I won't disagree but it also doesn't take into account buys and sells that you would have made over the years as well. I've owned stocks for deca
104 WarRI1 : As I stated, it is all in what you have invested in. I took a defined pension plan. The people that retired after, my friends took a cash buyout, the
105 windy95 : But I should not be forced to pay my dues without whining for the common good, for the working people...What a load of garbage. Opt me out. Once agai
106 Post contains images WarRI1 : I guess I was brought up in an age of non-whining, not as much greed as exists today, less selfishness like that which is exhibited on here to the po
107 ltbewr : I saw Mr. Stockton on 'This Week' on the ABC network this morning, repeating many of the points he made on '60 Minutes'. Making the current situation
108 BMI727 : As in me wanting the government to pay for my healthcare or wanting the government to fund my retirement. Or is that as in me wanting to take respons
109 windy95 : There is no selfishness or whining. Let me give to the charities of my choice and let me take care of my retirement and my family. How is that selfis
110 Post contains images Baroque : You may well say that, but to quote Mr Urquhart in a famous TV series, I could not possibly comment. But
111 dxing : When I hear the "children" at the top start talking about cutting some spending then perhaps I will think they have started to mature. Just raising t
112 Post contains images WarRI1 : If the chldren are the politicians, I agree. If the cuts in spending do not abandon the unfortunate, I agree. If taxation is fair for all, I agree. I
113 Post contains images WarRI1 : Obviously Mr. Urquhart was a very wise man, who knew how to get a point across.
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