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Paying for the Deficit
Where is the revenue coming from to help reduce the tidal waves of red ink during the massive deficit spending by Washington to bolster Wall Street greed, stimulate the economy and rescue homeowners?
The scale of federal deficit is witnessed by the new frequency with which the dollar word "trillions" is used in the news media. An adjustment of major proportions is needed. It was only ten years ago when economists projected out the Clinton's budgetary surpluses as "as far as the eye can see." They were scurrying to figure out how this surprising surplus was going to affect the U.S. Treasury bond market. How quaint!
So, who is going to have to pay more into the Treasury? Not the oil and gas industry whose advertised protests against removing unjustified tax breaks are saturating the radio and television stations. Not the real estate or defense industries. Certainly not the financial industry.
How about the very wealthy? Well Barack Obama is letting George W. "red-ink" Bush's tax cuts expire. So people earning over $250,000 a year will pay more. Mr. Obama plans to give 95% of the taxpayers some tax relief. Granted the Federal Reserve is printing money big time now, in order to spend it fast.
The right-wing, commercially-funded Think-Tank establishment wants tax cuts across the board. And the Cato Institute's fellows are also defending foreign tax havens! But most corporatists still want an even bigger military budget which already devours fifty percent of the entire federal government's discretionary budget. Their faith is that future economic growth will dissipate deficits whose purpose ironically is to promote growth
On Capitol Hill-better described as Withering Heights during the past decade-there is little interest or fortitude to confront the revenue question.
Who or what can you tax more to make a difference on the massive deficits?
For starters, close the "tax gap" which is defined as the difference between taxes owed and taxes actually paid. This amount is estimated to be $290 billion every year by the IRS. Several thousand more IRS tax collectors will pay for themselves many times over and help preserve some public sense of fairness by those Americans who regularly do pay their taxes.
This figure of $290 billion does not include the huge tax shelters and offshore tax havens harboring trillions of dollars from U.S. corporations and very wealthy Americans who do not wish to share onshore tax responsibilities. Some members of Congress, notably Senator Byron Dorgan, want legislation to bring back some revenues from these tax escapees.
Another huge source of revenue, with very little if any fallout on the average taxpayer, would be a Wall Street sales tax on speculative derivatives (not stocks or bonds). With an estimated $500 trillion traded in such bets on bets or bets on debts last year, a 1/10th of 1% sales tax could bring in $500 billion yearly.
Consumers pay sales taxes in most states of 5 to 7 percent on necessities, while Wall Street's casino gamblers buy trillions of dollars in derivatives and pay no sales tax. Unfair! Also such a transaction tax will help tamp down wild and destabilizing speculation, which has already pushed our economy to its knees.
A carbon tax would be another important source of revenue to keep the deficit lower and provide incentives to shift faster to energy efficiency and renewable energy such as various kinds of solar and geothermal.
There are other activities that our society as a whole would rather see diminished that can be subjected to increasing taxes. These could include the addictive and gambling industries and anti-social behavior such as corporate crime and fraud. Note that companies do not hesitate imposing "penalties" on consumers for far lesser infractions of their private, one-sided, fine print credit card and other form contracts.
Of course another $300 billion could come to the Treasury if Congress just restored the tax rates on corporate profits that were paid in the relatively prosperous nineteen sixties.
Then there is the reasonable argument that if taxes on "unearned income"-that is dividends and capital gains on investments-should never be lower than the tax on "earned income" by human labor. Well, today, taxes on the former-capital gains and dividends-can be half the rate as income taxes on work. Bringing them closer together could raise more revenue or bring down worker taxes in the process.
With huge deficits coming on like fiscal tornados for future repayment, Congress and President Obama have to face the music and stop dodging the question as to when they are going to be paid for and by whom?
Otherwise bankrupt corporate capitalism may be on its way to bankrupting its savior-Washington socialism!
118 Comments so far
Show AllOr maybe we just force the private bankers who own the Federal Reserve that "loans" us our money to forgive the debt.
Or maybe the whole thing just blows up and everyone loses their shirts in this casino and we start over from stratch.
Certainly none of these great ideas are going to fly in Congress or the White House. Obama and the rest of the Dims and Repugs are in no way going to start taxing their masters.
Where is the revenue coming from to pay the National Debt?
I think our government has already sold our great grandchildren into economic slavery.
hey ralph - you want to know who's gonna pay for all this shit
simple - the overfed and undernourished poorly educated slobs otherwise known as the sheeple
that's who
next question............
this is so obviously simple
we have to institute these changes
and then in the blink of an eye
the economy will be back
it always was and is a distribution of wealth issue
it is nonsense to blame corrupt programs that originally were intended to give housing to the lower middle class and poor
(the were corrupted of course, by the same people who ruined the rest of the economy through their avarice)
Raising the taz rates could be sold to Congress with this argument: You have stuffed your campaign coffers with promises of tax cuts for decades. In truth, you have started to run out of cuts to sell. Raise the taxes now to help reduce the deficit which is fueling populist rage and in a short time ( perhaps even within the parameters of your present term , Senators) you'll have plenty of cuts to sell again.
The most effective arguments have the most appeal for those to whom you wish to persuade, as Aristotle noted in "Rhetoric". Of course Congressman and Senators don't like to be pegged as being so completely opportunistic that they only respond to proposals that effect their personal ambitions, rather than some notion of the public interests. This is why my argument must be presented in tandem with the notion that "failure" to act at all will only serve to burden countless generations of "the unborn" ( whose interests so many americans hold SO close to their "hearts") with insupportable debts.
"Another huge source of revenue, with very little if any fallout on the average taxpayer, would be a Wall Street sales tax on speculative derivatives (not stocks or bonds). With an estimated $500 trillion traded in such bets on bets or bets on debts last year, a 1/10th of 1% sales tax could bring in $500 billion yearly."
I think 1/2 of a percent would be better and it should include stocks and bonds. This is such a good and simple idea that could be easily implemented. I think if Obomber had any real inclination to fix the problems or repair the damage done this simple step would have already been taken.
"that is dividends and capital gains on investments-should never be lower than the tax on "earned income" by human labor. Well, today, taxes on the former-capital gains and dividends-can be half the rate as income taxes on work."
Hip! Hip! Hooray! Labor should never be taxed more than capital gains. Those being taxed for capital gains obviously have a much greater ability to pay taxes than those whose livelihood is dependent on their labor.
And Ralph, if we as a people had any real sense we'd go back to the tax structure from the not just the 1960s but the 1950s.
Thanks Ralph. Your simple suggestion of taxing derivative sales would do more to stabilize the economy than anything the sleazeball cronies in Washington have suggested so far.
Hell why not a 1% tax on it, to bring in 5 trillion? Then revenue would no longer be a problem, period.
Lower the income tax on 95%, add a carbon tax and derivative tax. This would help move our nation onto better footing in several ways. With derivatives, tax and regulate, or outlaw.
Down in the Great State of GA, we're dumping our corporate income tax rate to 0%. While currently being 2 bil. in the hole, this little move will cost another 700 mil. a year. The US congress and senate are freakin budget geniuses compared to these yocals.
Just an example:
"Of course another $300 billion could come to the Treasury if Congress just restored the tax rates on corporate profits that were paid in the relatively prosperous nineteen sixties."
The $300 billion "of course" assumes that corporations don't react to the change. That's the problem with thinking about increased taxes as if nobody would change what they do as a result. Increased taxes is an increased disincentive for the thing taxed. It causes people or corporations to do things differently.
"Increased taxes is an increased disincentive for the thing taxed. It causes people or corporations to do things differently." Yes, that's why we should tax things that are bad (eg carbon burning, pollution, derivative trading, high levels of wealth that are subversive to democracies) and not tax things that are good (eg earning wages).
A problem being there is little agreement as to what is bad and what is good.
"high levels of wealth"
Do you favor taxing income or net worth of wealthy people?
I favor a 100% tax on wealth over 10 million dollars. That is wealth the total amount of stuff (money, stocks, land, houses, etc) a person owns. For example Bill Gates would have to pay about $59,990,000,000 in tax on his wealth of $60,000,000,000.
"For example Bill Gates would have to pay about $59,990,000,000 in tax on his wealth of $60,000,000,000."
Then the next year you couldn't tax him. When all the rich aren't rich anymore, who do you tax?
Obviously the post above yours is an overreach, but you are always underreaching it would seem, so it tends to balance out.
If we had a tax structure like this in the blue states and then the normal tax rates in the red states, what do you think would happen?
(I predict that within a short time, the red states would have higher tax revenues)
Why would it be any different on a global scale?
"If we had a tax structure like this in the blue states and then the normal tax rates in the red states, what do you think would happen?
(I predict that within a short time, the red states would have higher tax revenues)"
We already do, sort of, look at California. Intel Corp is headquartered in California. It announced new expansion plans within the US, none of it in California. Speaking to my original point very nicely, don't change the tax law and expect all other factors to remain unchanged.
The decision to expand outside of California involves factors not included in your inference that only higher taxes played the only part. Cost of land, willingness of other states to offer incentives, the cost of labor all played a role in such decision.
Why then, does Intel and so many other major companies continue to keep corporate headquarters in California if higher taxes is , as you suggest, the determining factor in location?
"The decision to expand outside of California involves factors not included in your inference that only higher taxes played the only part. "
Of course. There's no way to be sure. The original point stands though, if you aggressively hike taxes there will be some reaction.
Selectively raising taxes on those segments of our community that have heretofore failed to pay their fair share may seem aggressive to you, but it seems essential to me.
Who is to be the arbiter of what is "fair"? I imagine you draw the line so that you are not included, I could be wrong though.
Firstly, what part of the democratic process do you fail to understand with a question as to who decides? That should have been answered for you in your high school civics class.
Secondly, I pay my taxes, I think it a part of my civic duty. It seems to be you, not I, that thinks them an unnecessary burden, like welfare or public schools, or rebuilding roads and bridges I guess....Had you been paying attention to what I posted ,or even interested in the slightest in dialogue or debate even, that question would have been quite answered already. The real question is not how to get out of such duty but how to assure that ones taxes are spent wisely and well.
Frankly, Mr Newton, I have read of your apparent selfishness in many such posts now and fail utterly to understand your opinion as to what it means to be a good citizen. All your talk about unfair taxation and undue burdens being placed upon you boils down to simple and callous refusal to be a good American. At least in my own opinion.
"Firstly, what part of the democratic process do you fail to understand with a question as to who decides? "
It was a rhetorical question. Ultimately the answer is career politicians. Duh. You and I have these conversations with an eye towards retaining them or replacing them.
But the issue in this leg of the discussion is *your* claim of the degree of fairness. You had just written:
"Selectively raising taxes on those segments of our community that have heretofore failed to pay their fair share may seem aggressive to you, but it seems essential to me."
And with little explanation from you as to why some "failed to pay their fair share" I take issue with the statement.
"Secondly, I pay my taxes, I think it a part of my civic duty."
Never mind that you are *required by law* to pay your taxes, under penalty of the armed state. Spare me the sense of duty.
"The real question is not how to get out of such duty but how to assure that ones taxes are spent wisely and well."
Some form of taxes are needed to support some level of a government. That said, tax law should be limited to policy that raises those funds, and not to ideological concepts such as redistributing wealth from those who you claim were not taxed their "fair" share before.
"All your talk about unfair taxation and undue burdens being placed upon you boils down to simple and callous refusal to be a good American."
Utter nonsense. I also pay taxes. There's no better indication of one's being a good American than to question the true motivations behind tax policy, and how that policy might be better written. And to discuss specifically *your* proposal to make changes in tax policy to put things in a way that you think is "fair". Please spare me your fake patriotism on this point. Just pay yout taxes like we all do and don't get all puffed up about it.
"At least in my own opinion."
Your opinion, to the extent that it gives you a smug feeling of civic duty because you pay taxes in the face of penalties if you didn't, sucks. But thanks for telling me exactly where you are coming from.
You are that worst of all obstacles to progress, a cynical and bitter fellow who will post well crafted fairy tales to avoid facing the reality that you stand firmly in the way of progress. Corporations in this nation have the highest tax rate in the world yet pay nowhere near what the laws insist upon. The wealthiest among us pay less in taxes than do their employees in far too many cases. Yet despite the inequities you obfuscate about the realities of our tax rates and loopholes and deny your obligations to your neighbors.
When I , or anyone else it seems, punctures your well constructed balloons you immediately descend into sarcasm and attack, however politely crafted. I agree that one of us demonstrates a fake patriotism, but I will let your own words condemn you.
"You are that worst of all obstacles to progress,"
But *you* are the one suggesting major changes in the tax law in the name of "fairness", while refusing to make a case for any lack of fairness, and then changing the subject to "civic duty".
"Corporations in this nation have the highest tax rate in the world yet pay nowhere near what the laws insist upon."
You have yet to say why. Your assignment is to find out if the figures were real, nominal, or in percentage of something like gross sales or capitalization, than continue and find out how it compares to other countries. Then maybe we can talk about it meaningfully.
"The wealthiest among us pay less in taxes than do their employees in far too many cases."
That might be true and it might not be. It is up to you to make the case when you claim it to be so, and in any case refrain from accusing others of crimes.
"deny your obligations to your neighbors."
Completely unfounded. How do you possibly subscribe to thid fantasy? How dare you? You are losing focus like you always do in our discussions: I pay my taxes and don't claim to be a patriot because I do. *You* need to pay attention to the discussion you are participating in.
"When I , or anyone else it seems, punctures your well constructed balloons"
As if! LOL!
"politely crafted"
*blush*
Have a nice day Rick.
I appreciate the way you always make my case for me, thanks again. Not a single peep about the facts I post, only pomposity galore as if you were the erudite professor and I a struggling student. I would imagine that you have great difficulty keeping both an audience and friends...
"Not a single peep about the facts I post,"
Are you being stupid on purpose? I peeped about the lack of sourcing and context about what you "cited" concerning tax collections in the US. It's right there for everyone to see. And you *still* refuse to respond. I'll help your flagging memory, here are just two places:
"jakenewton April 1st, 2009 9:59 am"
"What *kind* of income?"
"Nominal payments? Payments as a percentage of sales?"
"jakenewton April 2nd, 2009 9:52 am"
"It was unqualified and without context. Your assignment is to find out if the figures were real, nominal, or in percentage of something like gross sales or capitalization, then continue and find out how it compares to other countries. Then maybe we can talk about it meaningfully."
You crack me up Rick.
I wonder if, deep in the recesses of your conscience, that little voice speaks out about your horrific and agendized stupidities?
Translation: Rick is unable to address the specific issues in a conversation he decides to participate in. Instead he wonders about the arguer instead of the argument. Losing focus yet again. He has done this in his last several posts, ignoring the subject matter.
Give it up Rick.
It will be a pleasure giving up conversing with a slug like you. Libertarians come in two flavors, the selfishly greedy and overwhelmingly selfish.
That I posted statistics from the GAO seems to have slipped by you , but that is easily explained by your fixation with your own image in the monitor.
"giving up "
That's about right.
*plonk*
Exactly.
I favor no income tax until about 100k, then start tax at about 25% and keep sliding it up to about 40%. And keep the good old 'death' tax.
I favor corporations paying their share of taxes, and I further favor the ending of many entitlements as well. Farm subsidies to agribusinesses is theft.
"I favor corporations paying their share of taxes, "
US corporations pay second highest tax rate in the world. Comments on that?
jakenewton, not true. They pay tax on profit only. And the game is rigged so that profits after 'costs' which include the millions in income these guys steal, is nothing, they pay little or even Zero taxes quite often.
Then the millions in 'income' these guys are stealing? Taxes on that are paid after these thieves factor in every deduction & loophole their friends could write into the tax-code, they also pay little or nothing. BUT, my single-mother neighbor gives up 30% of her slave-wage to the MIC-Fed in taxes.
Comments On That?
"They pay tax on profit only. "
That's how taxes work, you pay them on net profit, after expences. What's your point.
"millions in income these guys steal"
Your best example of such unlawful stealing please?
"deduction & loophole their friends could write into the tax-code"
If it's in the code, it's not stealing. If your real problem here is with the tax code, than rally around getting that changed and stop falsely accusing people of theft.
What Joe said,plus:
Yes, it is true, the official corporate tax rate in America is 35 percent. It is also true, however, that because of lax enforcement, loopholes and evasion, most corporations never come close to paying that rate. As the Government Accountability Office reported in 2004, 94 percent of corporations pay less than 5 percent of their income in taxes, and corporate tax payments are at their second lowest level in 60 years – lower than in every other industrialized country other than Iceland.
Jake, you seriously need to decide if you want truth or fiction to run your life. If it is truth then you need desperately to relearn a whole bunch of stuff.
"It is also true, however, that because of lax enforcement, loopholes and evasion, most corporations never come close to paying that rate."
You seem to imply that these factors are exclusive to the US. Why do you think that is true? As for evasion, if you have a good example please provide it. Tax evasion is a crime and should be prosecuted.
"94 percent of corporations pay less than 5 percent of their income in taxes,"
What *kind* of income? Gross income is normally placed against expences, and you pay tax oin the difference.
"corporate tax payments are at their second lowest level in 60 years "
What does this even mean? Nominal payments? Payments as a percentage of sales?
"you seriously need to decide if you want truth or fiction to run your life."
Right back at you, the above citations of yours for example. Completely without proper context.
None so blind I guess...Have fun in your little windowless box,Jake. I trust that you understand the sound you hear from inside there is that of folks coming together. I cite statistical evidence from a government agency and you dismiss it, I guess you libertarians are really crackpots after all.
"None so blind I guess..."
That would be more effective if you could just say *why*, but you can't. You should think on that fact a bit.
"I cite statistical evidence from a government agency and you dismiss it,"
And I stated why: It was unqualified and without context. Your assignment is to find out if the figures were real, nominal, or in percentage of something like gross sales or capitalization, then continue and find out how it compares to other countries. Then maybe we can talk about it meaningfully.
You may not be an ass, but you certainly play one here....
Excellent article. Too bad Nader wasn't president. The U.S. federal government, for all intents and purposes, is already bankrupt. Over the next 5 or so years the U.S. will be forced to deal with this-many services will be discontinued and the feds may even collapse completely unless something is done now-as Nader has suggested.
The American public has been monumentally ripped off, from S&L bail in the 80s and the 2.5 trillion theft of social security over the last 20 years, and now to the several trillion dollar Wall Street bail out. I wonder when Americans will have had enough?
Don't blame me, Ralph, since I didn't vote for the Democrats or Republicans. I didn't vote for you either since I have yet to see you build any Movement for anything, really. You are strictly a come around town during election time sort of guy. But nice commentary though...
Might I point out that it is far from election time and we see an article from Ralph Nader. Your bitter commentary reflects, not upon Nader, who is constantly and tirelessly working for change, but on the likes of you, a person who has the nerve to DEMAND that someone start a movement, how about I nominate you. I have read your petty and misplaced insults of Nader's words and what you deem to be his lack of any movement building before and felt it time to note that there is at least one person here who sees things more than a bit different..But keep on commenting.
I'll second that comment!
Yeah. This article has nothing to with the elections and alternative parties, yet logansafi feels the need, yet again, to remind everyone how pure his soul is with regards to voting.
While I appreciate that you didn't fall for Obama's "hope and change" fairy dust, you're being disgustingly mean with Nader. Can't you understand that running outside the two major parties, 3rd parties are tormented with too many stipulations in addition to funding disadvantages before they can make it to ballot status ? Nader tried to warn the public of the two party duopoly ruining the country but most of the electorate was used to the idea of judging a book by its book cover and not its actual contents when it came to politics. How else do you support Dubya and Barry could steal these victories away from the truly qualified ?
logansafi, Thank You.
In order to for RN's proposals to be taken seriously, we need new names, such as:
Taxing speculative derivatives: Patriot Surcharge;
Raising taxes on the rich, very rich, and obscenely rich: Super-Patriot Surcharge;
Closing off-shore tax 'shelters': Freedom Revenue Return;
Closing the tax-gap: Super-Patriot Anti-Terrorism Freedom Revenue Returns.
Gotta speak "their" language if ya want "them" to hear ya...