Reply With QuoteI hate to be the one to break it to the author, but shouldn't the goal really be ~$3.4 Trillion? i.e what the US is actually spending?Which means, of course, that we are at our goal: $2.3 trillion.
So what tax system do you propose to fix our mess? I have seen you condemn all proposals, and provide none yourself.Originally Posted by Mujo2000
I hate to be the one to break it to the author, but shouldn't the goal really be ~$3.4 Trillion? i.e what the US is actually spending?Which means, of course, that we are at our goal: $2.3 trillion.
i think the article's idea is about right. It is a progressive tax but a very simple one.
The US spending is far, far out of line with historical norms. On average, the US federal government spends between 18-21% of GDP. Its currently at about 26%. Taxes need to be raised, but cutting reckless spending is far more the problem.
Still a large percentage of the US population (those making <40k) would use government services for free. Everybody has to pay tax, even those making <10k
No, not all proposals. Only flat tax. I don't think any of my posts condemned all proposals.
I don't think you can fix it. It'll just keep getting bigger. If you can find a way to stop various lobbying measures, vote buying measures, etc. then it'll change. Otherwise, they'll just keep adding this deduction, that credit, bla bla bla. It gets more complicated.
Spending must be restrained, but taxes also have to go up. US is taking in the lowest money in terms of GDP in history, and apparently spending the most in terms of the GDP in history. Just cutting spending or raising taxes isn't gonna help. Both have to be done hand in hand. I don't see any of that happening though. It's too easy to be succesful and win elections by not doing anything, but repeating simple phrases like "flat tax".
There's an incentive to make more money under a progressive system.
There is an incentive, but not as strong as an incentive as a tax rate that is generally flat, or less progressive than the one offered in the OP. Why would you want to work hard to know that above a certain amount, the government was going to start taking away twice the money they did in the prior bracket?
The government only takes twice the amount on each dollar/pound/euro above the threshold. So you still take home more money than before, thus there is an incentive.
A progressive system is more flexible, it allows the burden to be better distributed, it can produces higher revenues with a lesser burden. As a result the overwhelming majority of countries use a progressive tax system, including nine of the ten biggest in the world (Russia being the exception). Here's a map showing which countries utilise a flat tax system.
Makes total sense. I mean, there are barely any millionaires or billionaires. I don't know ANYBODY who wants to earn more. Pfft, why would I? I mean, if I have to give 35% to everything I earn over $372,951, sh1t, why would I want to earn that? Makes no sense.
C'mon dude. According to you, the most prosperous country will be that one, which doesn't have any taxes at all. No taxes=full employment, happy people, kumbaya. Is there such a place in the world? No taxes? Lichtenstein? Monaco?
And what about the fastest growing economies in the world?The government only takes twice the amount on each dollar/pound/euro above the threshold. So you still take home more money than before, thus there is an incentive.
The overwhelming majority of countries use a progressive tax system, including nine of the ten biggest in the world (Russia being the exception). There are very good reasons for this. Here's a map showing which countries utilise a flat tax system.
If you look at the ones that are growing very fast - like South Korea - they aren't very progressive.
That doesn't change the fact that it's not a flat tax system. I'm not claiming that the more progessive the system, the better it is, because that's simply not true. I'm claiming that a progressive system is superior to a flat system for several reasons, which is why everywhere but the ex Soviet Bloc uses it.
The US system is the most progressive in the world once deductions are included (or so I've read), which is a major issue, but it's an issue that should be addressed by looking at rates, thresholds and deductions, not by switching wildly to a flat tax system.
Generally, if you look at when humanity had the most progress in regards to getting people out of abject poverty - such as the industrial revolution - taxation was quite low. You have to have a balance between a lack of corruption and low, fair, taxes, especially in a country like the US. We spend so much money needlessly, if you took out the things we didn't need, or used inappropriately, our tax rate wouldn't have to be very high.
Additionally, if you want to talk millionaires and billionaires, go look at countries with the highest tax rates - they generally discourage millionaires and billionaires, last time I checked. France will be a great example of this is the Socialists' 75% plan can be enacted. You'll see exactly what high tax rates do - just like the exodus we're seeing due to millionaire taxes in California.
Do we really need to spend $700b/yr on our military? $900b/yr on education? $1 trillion/yr on a failing pension and health system? You reform those three things properly, and you'd cut a huge chunk out of our deficit. You re-arrange all of the other programs the federal government runs, and you'd only need a top tax rate of 20-25%, even if it was progressive.
Scandinavian countries seem to be doing pretty well economically, have a great standard of life, low corruption etc despite having huge tax rates compared to the US.
Obviously needless spending is foolish, noone would dispute that cuts, both eliminating waste, and downsizing certain departments can and should be made.
The US needs to make a choice. Either you go for a high tax/large government system, where healthcare is provided, there are extensive welfare systems in place, like many European nations, or you revert to having low taxes, small government, with healthcare etc being (mostly) a private sector affair.
Right now it's trying to have its cake and eat it. Extensive welfare programs, Obamacare etc, but without the large tax rates to fund such systems.
Personally I'd advocate federal downsizing, coupled with more states rights to tax and spend. If say, Vermont wants a state health service funded by a state tax, go for it. If Texas is happy not getting involved and allowing people to insure themselves, go for it.
But is their success in spite of high taxes, or because of it? Most research I've done into the Scandanavian model usually points to their success being more owed to bountiful resources, low population, homogenous culture and xenophobic tendencies.
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