Brace yourself. Here comes the Great Tax Hike
"Draw a chart of tax rates--if that was a stock, you'd buy it now," says Robert Gordon of Twenty-First Securities in New York City. I spoke with Gordon, an expert on tax-efficient investing, for a story I wrote for Money last month.
And last week I finally got around to drawing that chart. The result is at left; it's based on records from the Urban-Brookings Tax Policy Center. Let it be said that buying a stock just because it's dropped sharply is actually a seriously dopey thing to do. (I'm sure Gordon would agree.) But as they say on Wall Street, this particular "stock" also has the fundamentals in its favor. Besides the current budget deficit, future lawmakers are going have to wrestle with the mounting costs of Social Security and Medicare. And whatever "peace dividend" we may have enjoyed after the end of the Cold War has been spent, and then some. We're going to be spending a lot on defense for the foreseeable future. The financial outlook points strongly to higher taxes.
And, increasingly, so does the political outlook. The cover package ($ required) in Feb. 12 issue of the National Review, headlined "What Now?", reconsiders the conservative political agenda. NR senior editor Ramesh Ponnuru says that Republicans have already squeezed most of the political juice they're ever going to get out of cutting marginal rates:
Taxes have been the most powerful domestic-policy issue for conservatives for a generation.... The top federal tax rate has been cut from 70 percent to 37.9 percent. The top tax rate may be too high, and cutting it might boost economic growth somewhat; but these rates are demonstrably compatible with robust growth.Ponnuru concedes that cutting taxes--or even keeping them level--is going to be tough as spending on Social Security and Medicare rises. (And he's admirably realistic about how hard it will be to cut back those programs.) What's more, a significant chunk of Americans don't even make enough to pay federal income taxes, other than payroll taxes. "Without the ability to cut taxes," writes Ponnuru, "conservatives seem to have nothing tangible to offer the public." So here's what he wants to offer instead: A $5,000 tax credit per child, open even to those liable only for payroll taxes. Technically, that's a tax cut, too. But as a matter of accounting, it's no different than any other spending program in which the government writes a check to a politically favored group--in this case, parents. If you aren't in that group, you'll be paying for those checks in higher taxes.
Just as conservatives may have lost some of their zeal for across-the-board tax cuts, liberals are becoming less scared of talking about straight-up tax hikes. Check out this article from The Washington Monthly, the bible of Democratic policy wonks. Mark Schmitt says the 30-year era of tax revolt is over. He writes:
In 2006, New Jersey governor Jon Corzine raised taxes.... his approval ratings actually went up from the mid-30s to above 50 percent. In 2004, Gov. Mark Warner of Virginia formed a bipartisan coalition to raise taxes and left office in 2005 as one of the most popular governors in state history. This year, the movement to impose limits on state taxes using ballot initiatives (known as Taxpayer Bill of Rights or TABOR), failed in three states.... In fact, shortly before the election, voters said they trusted Democrats over Republicans on the issue of taxes by 12 percent--a result almost as unlikely as preferring Democrats on national security--even though they fully expected Democrats to raise taxes.Schmitt urges Democrats to seize the initiative and raise taxes as fast as they can:
....if politicians aren't willing to talk honestly about the magnitude of the changes necessary, the default will be excruciating: In a few years, we will enter a period of chronic crisis, scraping by each year with a painful series of budget gimmicks, fee increases, and disguised tax hikes--just enough to get by for the year before the dreary cycle begins again. After a few years, the public impression would be of a government that is constantly raising taxes, constantly cutting services, yet never solving either the fiscal crisis or other problems.How you feel about all this will depend on your politics. But in my years working at a personal finance magazine, I've learned that nobody--no, not even a Democrat--wants to pay more taxes than he owes. So if you think taxes are going up, is there anything you can do to plan ahead?
I generally defer to my sagacious and thrifty colleague Walter Updegrave on these matters. His advice is to "tax diversify." That means putting at least some of your savings into a Roth IRA, where you pay taxes up front but can later withdraw your savings tax free. In theory, that money is safe from the IRS no matter what happens to tax rates.
But here's a twist: The big tax ideas Schmitt discusses don't have anything to do with income or capital gains taxes. He's talking about energy taxes, favored by conservatives like Greg Mankiw, or a value-added tax to pay for universal health care. These are consumption taxes--you pay them when you spend your money. Putting your savings in a Roth won't help you. "Money taken out of the accounts will be taxed either way," NYU tax law professor Daniel Shaviro tells me in an email. "The incentive effect of anticipating a shift to these taxes is to spend more and save less today." Which isn't a very good financial plan, at least as long as the possibility of consumption taxes is speculative. So stick with tax diversification for now--and, if you can, save enough so you have some wiggle room if taxes turn out to be higher when you need the dough.
Update 2/27: A few commentators point out that using top marginal rates overdramatizes the changes in the tax code. Most people have faced far lower marginal rates, especially once you factor in deductions, credits, etc. (The marginal rate is the tax you'd pay on your next dollar of earnings.) But the trend runs in the same basic direction. According to the Tax Policy Center the marginal income tax rate for a family of four in the middle of the income distribution fell from a high of 25% in 1978 to 15% in 2005. For a family with twice the median income, marginal rates are down from 43% to 30%.
If you just want to look at the overall tax burden for a typical family--what we actually pay on what we really did earn--the chart below shows how it has changed since 1979 for those in the middle 20% of the income distribution. Again, the source is the the Tax Policy Center. "Social insurance" is payroll tax for Social Security, etc. Note that for Americans in the statistical middle, payroll taxes are now the vast majority of their tax burden.
It is unlikely that there is any way around this 25+ years of fiscal irresponsibility, because the tax hikes necessary are so politically unpalatable that they'll never be implemented. I say this despite your suggestion that people are becoming accepting of tax hikes; the amount really required won't happen. We are just going to have to live through this train wreck. A select few will do alright, but most will have to live through the wreck. It will be painful, but I am confident that the world that comes out of it will be a better place.
Charting the top marginal rate without taking into account changes in deductions makes as little sense as charting a stock price without taking splits into account.
I say we radically raise taxes on the middle class. They aren't paying attention anyway, if they were they'd already be furious.
They just want to watch their "Survivor" and be able to make their minimum payments on their $100,000 credit card debt.
Mr. W from Ann Arbor is optimistic, ultimately. That's good. Historically, the 'way around' fiscal irresponsibility has been for the currency involved to be devalued. Thus, inflation. We shoudl expect it as part of the consequences.
Unfortunately I think you're right. Despite the rhetoric from the left that the rich don't pay "their fair share", the truth is 50% of Americans pay 97% of all federal income taxes. If I pay $0 in taxes and my nieghbor's taxes double, I'll tell a pollster I am content with a tax hike too.
As for the consumption tax idea, forget it. Liberals will never allow it since it would make poor people actually pay some taxes for once, can't have that!! Tax rates will go up on 'the rich' which for liberal and Democrats (but I repeat myself) is anyone everyone in that top 50%.
But it's OK. France and Germany have insane tax policies, incredibly generous welfare programs and their economy has always done really well...right?
How about some spending cuts or at least reducing the growth of spending? Aren't spending cuts "fiscally responsible"? Also, the graph above is highly misleading since earlier top tax brackets were subject to many loopholes that were closed when they were lowered substantially in the 1980s. "Effective" top tax bracket would have been better.
Roth IRA? What guarantee is there that the Roth IRA will be tax-free when today's savers retire? An unwise knee-jerk bill at some point in the future could easily jeapordize those "tax-free" earnings in a Roth - especially in a decade or so when those earnings should be quite massive as more and more people take advantage of contributing to a Roth. AFAIK, the law establishing the Roth IRA and its' tax-free earnings wasn't created with an "tax-free in perpetuity" clause.
Again it seems to be a few that have the burden of many. The incentive to earn more is smashed by the redistribution of wealth. Tell the lazy to wake up and get a job. Taxes are not the issue and social security should was a bad temporary fix from Roosevelt.
Most of us "Virginians" liked Mark Warner because he forced the state legislature to make the tough decisions. I doubt any of us really like him because of the increasing taxes. Case in point: In Virginia Representative Bill Howell's latest survey, most Virginians who responded say the Virginia legislature can do anything it wants as long as we do not have to pay for it. The idea of "fair exchange" is still lost on most of us here!
If you look at where your tax $'s go, you may be surprised that 60% are transfer payments where the Gov't takes money from one group of people and gives it to another. Entitlements are the biggest chunk of this $, but farm subsides, and corporate subsidies are a non-trivial component. If you believe that the role of Gov't is to use force to facilitate this involuntary re-distribution of your $, then by all means you should accept this premise. If however, you consider yourself a free man/woman, then you should be suspect of any effort to obfuscate this ploy by the political/elitist class.
We have already seen the movement of people and businesses from high tax states to low tax states. Currently, 1% of the population is the source of more than 30% of all income taxes. As other countries become more "modern" in their infrastructure and amenities, is it really too unrealistic to expect that those who have the financial resources to move will take their money, and their businesses, and move to lower tax countries rather than pay even more to finance benefits of total strangers who failed to save enough for their own future. After all, the U.S. financial markets, while significant, aren't the only option available to investors, and as more and more countries move toward capitalism, while the U.S. moves toward greater socialism, I can easily see that those who can afford to live in luxury in other countries, might decide to do so, particularly if those countries, to attract that wealth, set up a tax system more like how mutual fund sales charges are done - with progressively LOWER marginal taxes as income rises.
I don't know much about the other tax theories commented above, however, I do feel that a federal tax on spending may help motivate the masses to save instead of consume. It is obvious that invested dollars go much further that spent dollars. Also, I absolutely hate the idea of a tax break for children. There is a population problem in most of the world, and we are not setting a good example it we continue this antiquated idea of at tax break for procreation!! It is out dated and discriminatory!! In fact, we should change the policy to be like China, and tax per child any family that has more that two.
I feel that the only adjustment to taxes should be SS. Lower the base rate to about 3 % HOWEVER no limit to income. Only exception would be poverty level with no SS taxes.
Please let me take all of my entitlements as a lump sum now. All I want is the money that I put in plus reasonable interest. I get no trouble when I go to my bank and ask to withdraw what I put in, so why can't I do that with government entitlements? I'll tell you why, because the money I put into the government is not there! That ponzi scheme is illegal anywhere but in the US Gov't.
I'm tired of hearing people mention the word entitlements and not mention the national debt and associated interest payments or the amount we spend on our military which is 5 times greater than the next five countries put together. Our nation is spending more than it brings in - period. It doesn't take an economist to understand we suffer from a lack of fiscal discipline. We may come to realize that the European-way is actually a better way of living versus our consume, spend, and grow at all costs approach.
Now is a good time to have an old
fashion revision of expenditures from
top to bottom and abolish the tax code.
Have a national sales tax for reevenue.
Where are all the politicians with good,common sense.
The politicians don't want to do anything to upset the masses so they can continue to feed at the trough. The masses don't want to do anything because the solution will be too painful. What do all the heavyweights in the think tanks suggest? Where do we go from here?
Using Jon Corzine as an example is a bit flawed. Turned out, he wasted a third of the money on giveaways and then conceded he didn't really need the hike. I suspect his numbers are much lower now.
Sam, there is no precedent that suggests that the tax status of a Roth or most any tax deferred or tax-exempt retirement investment, will change at a later date. In fact, the precedent is that the tax laws will remain unchanged or if changed, changes will be "grand-fathered" in for existing investers at the time of the change. fyi...
Then maybe you should move to Europe.
After the baby boomer generation has spent their entire lives tinkering with social policy and generally screwing up this country, millions of those same mindless hippies are now about to retire. They expect my generation to pay for their "golden" years and take care of them in their old age. This is going to cost A LOT of money. So much so, that only three workers will be supporting each non-working boomer. Unless my generation can find a way to dump these useless freeloaders, I'm taking my pile of money and moving to Ireland.
And so we should just sit there and chill out while the government redistributes money from the earners to the spenders and wastes a lot of it in the process? You have got to be dreaming.
Sorry, universal health care is a crock, not a right, and it's a mythical panacea promoted by those who want the right to spend other people's money.
Sorry, I don't want to live under a nanny federal government that steals my money, wastes half of it and redistributes the other half to buy votes. Payroll taxes are a crock anyway -- how about cutting entitlement spending, foreign aid to these backwater countries that take our money with one hand and curse our names with the other, and other things we plain just don't need, and then implement a flat tax?
As a new small business owner hoping to make it big, I welcome the idea of a higher tax bracket if I believed the government was capable of spending money correctly. How we can justify spending billions overseas and at the same time continue to purse the "No Millionaire Left Behind" program (Letterman), who do we think is going to pay for this ridiculous accrual of debt? At some time, the debt collector comes calling - even for the U.S. Government. Social Security has been mismanaged, run into the ground, and used as a crutch for people who refuse to save. And now add higher life expectancies with higher medical costs...and you have a fiscal catastrophe already in the making. I agree that we should trim spending significantly and get out of the entitlements business as much as possible. But don't forget to give Congress their annual 8%-15% raise and free healthcare, and robust pensions.
Following Europe's act is definitely not the way to go. I have lived there for years with the military and have made many good friends over the course of that time. Many Europeans envy our system which currently leaves more with the individual than any other system. Although, we seem determined to expand our wealth re-distribution plans to ensure that non-functional/productive members get their share of what is earned through the hard work of others. What we should really look at doing is reducing what the federal gov't does back to what is Constitutionally mandated and let more of that money stay in the states and cities and individuals' pockets. The closer the money is kept to where the spending is needed, the more efficient the spending will be. Money at the federal level that gets spent at the local level has to pass through too many hands. Much less actually arrives, and spending decisions are still tied back to the federal gov't.
Tax the dollars we spend! I am tired of seeing my tax dollars given to the lazy money sucking fools that feel that they are ENTITLED to my money. They never pay any of it back through taxes because they are lazy and keep sucking it up. Entiltement and the laziness that it has spread is destroying are coutry and making fat lazy entitlement-junkies.
I saw an article, I can't recall where,
that stated that eighty million people collect income in the form of pay and benefits for current workers and retirees from local, state and federal governments. I would assume this included teachers, college professors, fire, police,sanitary workers, military personnel,representatves,senators etc. If so given a population of 300 million that's a little over 25% of the people living off the other 75%. I was wondering if this was true and if it is how much do the 75% pay for these "services"?
What's wrong with consumption taxes? The underground economy which includes your babysitter, landscaper, and drug kingpin is estimated to be larger than the regular economy.These people are currently paying no taxes at all. By the way, tax on food/basics would be rebated. See Concord Coalition website.
Cut the size of government. We need antother "Reagan". Social Security reform first, the easier of the 3. Then we tackle Medicare and Medicaid.
I have no doubts that we will see higher taxes and/or more deficit spending covered by foreign bond holders. Both of these scenarios are bad for the American people. But as one other reader pointed out, the vast majority of the American public is more concerned with reality television than with America's future. We are all doomed and must save for ourselves.
at what point should we stop paying for medical for the elderly? most operations give the person 6-8 months extra at the cost of several hundred thousand dollars. Dr's are more concerned with their ego's than quality of life.
Individuals should be responsible for their retirement not the government. Up until the depression this was the case.
A flat tax rate with no exemptions for business and individuals is the answer.
The other alternative is a national consuption tax without any provisions for non profit organizations.
Why people get a tax break for more kids is ignorant, they are consuming more resources so they should pay more.
If you cant afford children dont have them.
We should not give money to other countries either.
The US spends 50% more on healthcare than the next most expensive country - which has universal health care. Creat a universal healthcare system, but fund it through taxes, not insurance. Take the money alreay being paid for insurance as the effective "healthcare tax".
With universal healthcare, huge savings can be realized on health expenditure as those who could not afford preventative healthcare and hence relied on emergency care when their condition becomes chronic would start receiving preventative care with most conditions that have a huge cost when chronic will be treated at a fraction of the cost in a regular doctors office.
With the savings that can be realized, not only can a universal healthcare system be implemented, but a significant surplus from the monies collected re-directed to the overall defecit.
The consumption tax is unlikely to happen as it puts power in the hands of individuals and takes power away from politicians. Individual freedom is not that important to people and is generally discouraged by politicians. They will give the notion lip service, but when the idea of personal responsibility rears it's ugly head, too many people will scream and complain.
For 30 years business has been gov't subsidized through federal spending and tax cutting on the rich!!!!!!!!!! Then cutting deductions on the middle class i.e. RAISING THEIR TAXES and why would it be a BIG SURPRISE if middle class payers want the taxes increased on business and the rich!!!!!!!!!! only a idiot would be surprised that a tax increase was not supported!!!!!!!!
I find some of these comments amazing. Seems like we can blame the "lazy, conniving poor" for the financial pitfalls this country finds itself in, but not blame those in power for spending billions on occupying countries while not raising taxes to pay for same.
Survival of the fittest. There are consequences for being fiscally irresponsible and those consquences should not include me paying more into the pot.
Regarding the use of Roth IRAs & 401Ks to "tax diversify", one point that I never hear discussed is whether the future retirement boom (the primary reason cited for why taxes must increase in the future)will be funded by social security taxes, or regular income taxes, or both. The Roth 401K sounds like a great strategy, but what happens if the retirement boom ends up being funded wholly through social security taxes? You pay those taxes up front on all income, even pre-tax 401K contributions. The Roth 401K offers no protection against social security tax increases, although it does protect against increases in regular income tax rates. What do the experts think? Will there just be a general across the board increase in all taxes?
As long as we are talking about lazy useless parasites, let's talk about the wealthy classes in this country who have whined and moaned about their tax burden until we got this totally irresponsible administration that was willing to cut taxes on the rich indiscriminately. Now these parasites will hit social security age and demand to be compensated for the money that they refused to pay.
I say we fix this with a quadrupled estate tax. Why tax the living when we can tax the dead. Let the worthless offspring of the wealthy make their own way like everybody else. Why do so many people here pity the wealthy?
Let me offer my personal thanks to the worst generation (the baby boomers) You have screwed this country royally and we, your children, would like to tell you what to do with yourselves. Thanks for all the debt and irresponsibility. I hope your nursing homes treat you like crap.
And no Ed from Vegas, if you did your homework, you would see the poor WONT pay taxes in this system. It just raises the tax base by adding in the rich (who dont pay income tax, because they make money on investment, not from a salary) and anyone who comes to this country PERIOD, because they will spend money here.
Money will go where it is treated better. The business taxes in Amerika are the highest in the world sans Japan. Do you wonder why "your" jobs are moving offshore? Maybe Gov't-lovers should consider moving to Cuba where they will be much happier. I earn my money...its mine...not the Gov't of the voters.
I found a very nice poster on http://thebudgetgraph.com/poster/. It would be easy to budget cut with this handy tool.
My concern is that the meaningless comment posted by Anonymous probably rings true to the majority of people posting a reply to this article. Why post a comment if you are too gutless to show your name? Bottom line is that we are spending more than we are taking in. The super-rich have creative tax schemes designed to pay the bare minimum and the poor just live off of entitlements. We are a Nation that refuses to put up with a painful solution because that would be extremely inconvenient. And I don't have the patience for inconvenience, it gets in the way of my short term goals.
Over 20% of the countries annual budget is used to pay interest on our debt. The government works just like a good portion or the country, living on borrowed money. There are some entitlement programs that don't work, but most are there to protect children. If the parent is lazy, do you let their children starve? If you really look, you'll see that these so called "entitlement" programs are lot smaller portion of the budget then the interest.
Come to Wisconsin where we alredy enjoy the 3rd highest state income tax and 4th highest property tax. Isn't life grand?
John M. from Champaign, IL. I am one of those baby boomers and I totally agree with you. I recently sent a scathing email to the AARP (of which I am NOT a member) criticizing them for their use of children in their ads. Having young children talk about fixing that pyramid scheme known as social security or displaying an exasperated attitude while at the same time saying "Don't get me talking about health care" makes me gag. In my 38 years of working, I�ve contributed over $200,000.00 into social security and I�m only 52 (yes, I�ve had a job since I was 14) and I�d happily give up my social security benefits to avoid seeing my son strapped with a debt created by a bunch of greedy old fools who were too stupid to save for their old age.
Let's raise taxes on legal services. Opps, that will never happen with most of Congress being lawyers.
I'm not sure we would want to create a $5,000 incentive for someone that's currently not paying taxes to have a child.
Our politicians will never make across the board revisions in tax policy which would raise taxes. No they prefer the divide and conquer approach. Pick the "rich" and the rest will not object. Pick the "smokers" and raise the tax on tobacco products, the non-smokers will not object. They hide behind their pompous ideologies. We saw a great example of that Sunday when the Hollyweird crowd tried to invoke their beliefs on the rest of America.
Sure hope the increase in the child tax credit doesn't even see the light of day. As someone without kids, I'm getting tired of paying more taxes than someone who has kids.
Having kids or not should make no difference in the amount of taxes you pay (unless those with kids have to pay more, since they're using more government services, like schools). Having kids is a CHOICE. Those without them shouldn't be punished by receiving fewer tax credits.
We will have to raise taxes forever until we get some sort of fiscal responsibility from our government. Less government control is the answer. The issue is the fools that sit in Congress, the Senate and the White House have no incentive for fiscal responsibility. So buck up! And remember, the democratic spending machine is just warming up !
Its very simple. STOP SPENDING SO MUCH MONEY! The Gov't, especially in NJ, has a bottomless pit of cash. They run out of maney, simply raise taxes. NJ is the richest state in the nation & we are broke. Stop spending so much money on inner-city programs that dont work.
I believe that we are going to see more inflation. As inflation doubles, in about 20 years, as it has historically done in the past, yet politicians will be able to cut the tax rates, but we qwill all face more taxes.
Inflation is the only our government can pay for Social Security, Iraq, the enviorment, etc.
Yet any fixed investments will slowly decrease in purchasing power.
This is a cruel tax.
As a baby boomer, I find it a bit funny to have people criticize us for expecting something back from our social security contributions. It's well known that as a retirement investment, social security hasn't been very good to us. It was a good deal for earlier generations, but not us. What is wrong with looking at the 15% of your salary that goes into social security (yes, you can count your employer's share as well) as part of saving for retirement? Why does expecting a modest return (which I won't get) on my social security savings make me lazy or greedy?
LB, Minneapolis, MN: I can see why you wouldn't want to support other people's children. It isn't like they are creating the foundation of the next generation. Spend the huge savings you already enjoy. You should also be forced to give up your own SS pension since other people's children will be paying for it.
The Byzantine Empire flourished due to commerce and trade. Alas, it's bureucracy grew faster than it's economy, and it found itself unable to confront it's challenges and fell to myriad enemies. We must be careful not to allow ths great nation to similiarly spend itself into weakness because it's politcially inconvenient to tell the bureucrats to make do with less.
Being unrealisting about taxing and spending means that we borrow $1 Trillion from China, Japan, etc. and have national debt levels to challenge France, Germany and Italy. Cut subsidies not just for Mohair but most agricultural. Trim deductions from the income tax code (flatter is better). Uncap the Social Security tax and transform the Medicare part of FICA into a national sales tax of 2% (if this looks ugly, Medicare's looming insolvency will be even uglier with the status quo).
Two words, flat tax.
This could be in the form of sales tax.
A "pay to play" philosophy.
What is unfair about that? Unless
you're a highly paid accountant?
A parity of Lee Greenwood's God Bless the USA from a German friend of mine who got tired of having 80% of his earnings stolen from him every year by the parasitic voters.
Im proud to be a Dubai-ian where at least I know Im free.
And I wont forget the low taxes that gave this life to me.
I would gladly stand up and leave this place if it became a Dumocrazy.
There aint no doubt I love this land, I bless the UAE.
He might be on to something.....
I am beyond sick of hearing about tax cuts for "the rich." There is no such thing, as the truly "rich" of this country pay very little tax. The people who do pay the tax are, however, the productive. Ie - not the highly wealthy, but the high wage earners. The top 5% of wage earners pays well over half the tax. These are the most productive people in our society - the ones we should be encouraging to stay here. So what do we do? Punish them the most for their enormous contributions. A national sales tax would be perfect - it would punish just the right people - the ones consuming - not producing. But it would also truly tax the rich and take the power out of their hands, so dont bet on it happening any time soon.
The USA is bankrupt with close to 9 trillion in debt, and no way to ever pay it off. Tax rates only matter if you fail to realize that it's all counterfeit money.
Universal Health Care??? I have friends in Canada who tell me how bad it is up there. IF you are diagnosed with cancer, it can take over 6 months before you begin treatment. Easy to see why so many come to the USA for their health treatments.
Ah yes, the Republicans and Bush, the so-called compassionate onservatives, they have the answer. Keep cutting taxes and spend like there's no tommorow. The "I got mine, you get yours and if you don't get yours, tough crap" crowd. We are being bankrupted and demeaned but just keep blaming the Democrats. The Democrats could never in their wildest dreams have spent us into this nightmare or have betrayed the middle class like these lying theives.
Politicians are to be blamed and so are we because we voted them in. Many who are receiving social security benefits payed into the system for years and have earned it. Social security money was put into the general fund years ago and the money is being used to fund other projects. We could save millions if the president would stay in Washington at least two weekends a month.
To all the "Reagan" Republicans: check out a graph of national debt/deficits over the years sometime. Pay attention to the enormous spike that began in 1980 and only briefly abated in the Clinton years when the budget was actually balanced. Then, note how under Bush the spike has returned. Think about it and then vote logically. Here's one link: http://www.cedarcomm.com/~stevelm1/usdebt.htm
Hah. I won't be paying substantially higher taxes. That's mostly because I'm a saver, not a spender, and I direct as much as is legally possible into tax-deferred or otherwise tax-sheltered or tax-managed investments. I keep my consumption to a minimum. It's good for my pocketbook and good for the environment. To give you an idea, I'm peeved because I need to buy a new pair of shoes. I've finally worn the old ones out. I'm peeved because I need to buy a bit of cloth to patch my worn jeans. They are still mendable and patchable, so I'm not buying new ones.
I do not own: a car, a dishwasher or a dryer. I do not own: a cell phone or an iPod or a Blackberry or a PDA. I do not subscribe to: high-speed internet service, cable or satellite television, or a cell phone plan. My home does not have air conditioning, not in individual rooms or in the whole house. I have a couple of portable fans.
So spend and consume away, folks! I'll just laugh come tax time.
The US is not bankrupt. There are tremndous assets that the US government owns that if liquidated to pay off the debt would put the country into a surplus that would last for 1000 years or more. There are articles that discuss this very issue.
The Government needs to learn to control spending. Just like me, it needs a budget and can't spend more than it takes in. Its called a balanced budget amendment.
The President needs a line item veto to cut out the "bridges to nowhere". If the Congress can muster 60 votes to override the veto then fine. But Congress should have to vote on each line item vetoed.
The bottom line is, stop the wasteful spending.
Mark, NYC, NY:
Let's answer a fundamental question: What is the purpose of having children and who benefits?
The purpose is to pass one's genes on to the next generation. Who benefits? The parents (and perhaps close relatives). Therefore, why should other people (without children) have to suffer higher taxes in order to "help" the passing on of other people's genes?
All the other benefits of the "next generation" is really just gravy compared to this fundamental truth.
Yes, the other benefits are worth something, but please answer why those without children should have to pay more (in taxes) for them?
If those without children truly benefit from the next generation (enough to offset the greater taxes they have to pay), there should be some sort of guarantee of these "benefits", and they should be greater than those with children receive in order to balance out the disparity. Something on the order of receiving earlier social security benefits and some promise of care in their old age would be good.
In regards to Social Security, one generation shouldn't expect the next to pay for it - i.e., the current system is wrong. However, the system being what it is, far be it for me to expect to get something out of something I've been paying into for years.
No amount of tax will ever amount to anything if the Government can't control spending.
When the Govt. stops the wasteful spending then there will be a surplus that is beyond imagination.
Right now Government believes it knows best how to spend our money. What it should be doing is let the free market system dictate and spend only what is needed for national defense. Let the free enterprise system work its magic.
How about if you don't pay taxes you don't get to vote?
I am a classic example of the ill effects of extreme re-distributive taxation and the very real competition for high productivity citizens (tax payers) among nations. I am a young, mobile, high wage earner who is about to relocate to Singapore (which is like a University with admissions criteria for citizens) for the next several years, in part to take advantage of the much lower tax rates. Ten years of earnings in Singapore is worth roughly twenty-two (figuring state, FICA, sales taxes, etc.) in the US for earners of $300k+ per year or more, the same people who account for 30+% of total US tax revenue. For me, this represents the difference between retiring at 40 and retiring at 55 (assuming no spend increase in during retirement) -- consider what that means for one's life in terms of time spent with kids, hobbies, etc.
I would expect economists are studying this issue but am doubtful that politicians will consider the consequences appropriately given the difference in accountabiltiy horizons (tax migration is a long-term effect, whereas politicans operate on a 2-6 year horizon).
I'm still trying to figure out what Mark Warner did in four years as Virginia Governor other than raise taxes. An urban myth has developed in the media that Warner was the most popular Governor in Va history when he left office. Not true - in fact Allen and Gilmore had higher numbers. Typical press thing....
The fact is that if rates go up, total revenues go down. The Treasury is experiencing a revenue boom with the long term gains tax lowered, lower dividend taxes, and overall lower marginal rates. Raising rates may give a short term pop to treasury revenues, but historically, raising rates has a long term dampening on total Treasury revenues.
To those who think the baby boomers are responsible for the current tax structure and social policy. The current social policy is still the remains of the Great Depression policies and the Great Society of the early sixties (not a baby boomer program). The Reagan revolution and the tax cuts by GW Bush were really the first challenges to these social contracts. Yes, the baby boomers have been in Congress for about 15-20 years, but the policies that today's young people see were set several generations ago and are still the major underpinnings of the current social contract. Actually, baby boomers have paid more into social security than all the previous generations put together and by quite a bit. To expect some return is not unreasonable.
National sales tax. Catches all. Exempt food and medicine. You recycle, you save. You consume, you pay. Encourages savings as well.
LOSERS NEED TO GET A JOB!!! And stop sucking from the men and woman who work hard , puttting in 50-60 hour weeks for 45k. So LOSERS can sit home and have more babies, and live of welfare and foodstamp.
I live in Buffalo, and I cant tell you how many losers live off the goverment. Bars/Clubs around here have FIRST FRIDAY parties because thats when LOSERS get there money from the goverment.
SOMETHING HAS TO CHANGE AND SOON!!!!!!
Everyone talks about the deficit and taxes. What we all should be talking about is what our government is doing with our money. If the American population started to focus on the government actions, we wouldnt be in this mess anymore.
take all those illegal aliens...make them legal and have them pay taxes so they can support us for the next foreseeable future.
Let's remove the tax Deduction for ALL homes , condos,timeshares. Then go with consumption taxes. Middle class with no debt, as it should be. Limit credit and start paying in CASH.
Let's tax the Illegals, all of them, for the right to work here!!
We all benefit from children! Who will run the shops, mines, and factories when we are retired? The next generation and the one after that.
We have the best government big money can buy at all levels!
Tax the illegals to work here?
Hmmm...sounds like a Federal SALES tax to me. (I'm in favor.)
And has anyone REALLY considered how much money the government would "not spend" on IRS workers if we had a Federal Sales Tax? (I'm sure they would spend it elsewhere.) I live near KC and KNOW how many people work at the IRS and how good their benefits are. (And benefits = government spending again.)
If we could go with a Federal Sales Tax and set a REASNABLE budget for Legislative, Executive, and Judicial branches...we might actually post a profit (that could be used to pay off those hokey pork barrel projects) within 10 years. Additionally, I think that any Washington big-wig wanting more for their "personal" budget (i.e. a pay increase) would have to go back to their specific constituents for a LOCAL increase instead of pawning it off on the entire country.
Consumption tax is the answer, period. You consume, you pay. You don't consume, you keep YOUR money. I'm actually not an advocate of taxes at all, but I recognize the fact that they aren't going away. Uncle sam still get his same chunk to waste as normal under the consumption tax, but at least it doesn't discriminate......Heck, even Libs/Dems have to support non-disrcrimination, right?.....oh yeah, not when it's at the cost of non-discrimination of non minorities and people who actually worked hard to make a decent living. Figure it out, folks.
Repeat after me: the US is running deficits because spending is too high, not because taxes are too low.
Repeat after me: every time tax rates have been significantly reduced (JFK, Reagan, Bush II) tax revenues have soared.
Conclusion: keep tax rates low or reduce them and reduce spending.
Thanks for your attention.
The optimum point on the Laffer curve is not the same as the minimum point.
An individual above mentioned the site (http://www.cedarcomm.com/~stevelm1/usdebt.htm). It should be required reading for anyone posting to this site. But it is always acceptable to blame the poor/unemployed for our country's massive deficit.
I find it insane that I know I cannot afford to have children. So rather than being a burden on society and collecting welfare/medicaid and all that stuff that these baby making machines keep collecting while not working, but they receive a big fat income return check for what, making babies?
For those who talk about moving outside of the U.S. to get lower tax rates, I'd like to point out that as a U.S. citizen or greencard holder you are liable to U.S. tax on worldwide income, regardless of where you live and work (this is different than the rest of the world's tax strategy -- taxable only if you live/work in that country.) Sure you can take tax credits and exclude some foreign earned income (if you are paying tax in that other country;) but ultimately you will pay the higher of U.S. or host country taxes. Oh, and if you give up your greencard or citizenship to avoid taxes, and you earn above a certain $ amount per year, you'll have to pay U.S. taxes for the next 10 years as a sort of exit penalty. And yes, the reach of the IRS continues to grow worldwide. Nice try though . . .
Earl, Minnesota :
Assuming everyone benefits equally from the societal benefits of having a next generation, please explain why those who don't have kids should pay more in taxes than those that do for this same benefit?
I'm not a conservative or a liberal but a realist. This country cannot continue to borrow and spend more money than it brings in. For the last 30 years, our politicians spend and borrow money like a college kid with a brand new credit card. They make financial decisions without any thoughts to the consequences as it won't be their problem to deal with after they leave office. I can't believe how many people in this country think that the current low tax rates are good for our country. The numbers can be skewed or sliced for whatever political reason someone wants to endorse but one thing stands out, the vibrant economy and higher quality of living of the higher tax rates and no federal debt of the 1950's and even the 1960's is preferrable to what we have today. In addition, no comparative of the tax burden numbers can be made until you take into account: 1.) what actual receipts are paid by different groups (specifically US corporations: today 7-8% of tax reciepts, 1950's at least 25% of tax receipts), 2.) the fact that most wealthy individuals earn their income through capitals gains (which can be deferred indefintely at times and at a much lower tax rate than what the average middle class family pays and oh by the way, does not have any payroll taxes taken against them as well, 3.) State and local tax burdens that are primarily regressive flat tax rates or consumption driven (which are favorable to the rich, example: if everyones state income tax rate is 3%, the rich person would have much more disposal income under that system than a regressive system.) Even Adam Smith wrote that a progressive tax system is necessary to sustain and promote a capitalist economic system. In addition government intervention is sometimes necessary (i.e. Taxes, social good, etc.)
The basic problem with social security (and medicare) is demographic and not related to the tax rate. In other words, all those retiring baby boomers didn't have enough children to support them in their retirement. The declining birth rate has further worsened this trend with time. Whether or not the government gives tax credits for children, it is important that we realize children are assets that will contribute to society in the future. Good government policy should encourage couples to have children and raise them to be educated, hard working, productive members of society.
About taxing the illegal immigrants � that�s not going to help much. By definition they are ILLEGAL and refuse to obey the law. They will refuse to pay taxes and find a way out.
Encourage LEGAL immigrants who prove that they respect the USA and will be normal, productive, tax-paying members of society. I have nothing against that.
When discussing having children and taxes, we also should look at the environmental implications. With over six billion humans on this planet, the last thing the government should do is promote more child bearing. This planet simply doesn't have enough resources to sustain that many people indefinitely. Continuously increasing population is not sustainable. It must level off at point, and when it does, we will have to accept that there will be an overall average of 2 children for each couple. (And that is what's happening in this and many other countries!) Therefore, our current entitlement programs must adapt to that.
All that besides, parents already hugely benefit from their children by getting their genes passed on (and that is the #1 reason for having children by far), and will likely receive "free" care in their old age. That makes them the primary beneficiaries of the benefits provided by having children. Giving them tax breaks as an added benefit only adds insult to injury for those who don't have children. Further, the parents should be responsible enough to make sure they have the resources available to raise children. They shouldn't depend on others to take over their part of their tax burden.
People will have children either with or without tax breaks, and I'm willing to argue it makes very little difference in determining how many they have. So, how does giving them tax breaks supposed to improve the next generation exactly (and increase the benefits to those without children)?
If those without children have to pay more in taxes, then it is perfectly reasonable for them to expect to derive more of some kind of societal benefit than the parents.
Low taxes drive growth, which creates jobs and income. This in turn increases tax revenue. Raising taxes for the sake of short term government revenue collection is counter-productive in the long term by hampering growth and job creation. Most states are in a surplus now, and we'd be well on our way at the Federal level without Katrina and the War.
SS is a problem, most of the successful programs in other countries have kept teh systems solvent by exposing the account to the markets, ~10% year long term, and that's calcuated on safe diversified indexes. Even the less capitalistic europeans do this. Childish hysterics and partisanship have prevented it here, and we will pay a price. Do you REALLY think the entire market (which reflects our economy) could possibly crash to zero like a single silly internet stock?
I feel dumber for reading this...everyone pushes their agenda without really studying the effects of their proposed solutions.
Balanced budget? Why should any generation foot the total bill for a service that will benifit generations to come? Example, the highways. If we operated under a balanced budget the current generation would have to fund the amount in full, regardless of the continued benifit that will be enjoyed for a long time into the future, they should pay too in the form of financed amounts.
As for illegal imigrants, stop the complaining. While illegal and recieving none of the long term benfits of citizens they are contributing to our overall economic welfare by cheaply adding to productivity and consuming goods and services (consumption is the largest factor in GDP). That far outways the hospital bills of some Arizonian's. This is easy to discover yourself if you look into a Labor Econ 101 book.
And the worst idea, the consumption tax. This would cripple the lower class and only make for more handouts. Sure, you would collect income from the wealthy on their frivolous purchases but the percentage decrease in income associated with purchasing power for the poor would be disasterous.
One of the posters mentioned Adam Smith. The guy, while smart and revolutionary, died a long time ago. His ideas have been updated and some discredited. If your only knowledge is going to come from one quotable person at least make it Milton Friedman (look at his tax writings as well for the best source of info, forget the bised websites).
I'm not sure Roosevelt is the problem with Social Security. At the time retirement age was 65 while the average lifespan for a male was 64. The system was designed to keep the surviving elderly from having to pick food out of a garbage can to survive. The 'Greatest Generation' converted it to a 20 year retirement package and my generation, boomers, want it to be a 30 year retirement package. RAISE THE RETIREMENT AGE and make the system pay as you go. Only tax what is actually needed for benefits for the current year. Once the politicians get their hands on the extra money it's gone for good.
In 1986 Reagan doubled social security payments with the intention of paying off the national debt. We see how well that worked. Politicians from both parties spent it on their pet projects of the month.
You sound like Malthus. According to him we were supposed to eat ourselves out of existence over a century ago.
Your assumption that people will have children with or without tax breaks belies the experience of every OECD country. How do tax breaks help children? I assume you're being facile unless you need a graph correlating after-tax income with quality of life that any economics book can provide you with.
Stop couching your SINK/DINK bias against paying proportionately more tax to support our next generation as a 'choice'. Next time you go to McDonalds and that teenager serves you a Big Mac, think about the massive foregone consumption by parents that you now benefit from.
As any financial planner and they will tell you the worst move financially anyone can make is to have children. What benefit do I recieve from my genes being passed on? A lot less than you recieve with your higher disposable income.
The reason you don't deserve SS is you've currently paid for your own parent's pensions. Your kids will pay for yours. Otherwise anything you recieve will be on the backs of other people's children.
To everyone blathering about how low taxes drive growth, then why not set the tax rate at zero for the maximum growth?
Why do we need children? Well, those little guys and gals running around now with a mouth full of baby teeth are the ones who will fix your plumbling, paint your house, pay into Social Security, and eventually change your Depends. If you want them to pay a *lot* of money into Social Security and Medicare, then you will want them to be well educated and make high salaries; thus they need good schools.
Did anyone see the story today about the 12 year old who died because his family could not afford to see a dentist? But I suppose all you tax-cutters are happy to see the unworthy poor suffer. I would like to pay higher taxes if the return would be a fairer and more humane society.
It's not taxes that are killing our country, it's liability and class action lawsuits. If we were to free ourselves of those taxes on both innovation and productivity you'd see GDP soar and business grow dramatically.
Don't miss the forest for the trees.
Here in Hong Kong we pay 16% income tax on our salaries... but the standard deductions are sufficiently high that only 40% of workers have to pay it. We don't have sales tax because it hurts the poor (and the small business owners), and we don't have capital gains tax because it hurts the rich and middle class. The down side, of course, is that we can't afford to invade middle eastern countries (China wouldn't let us anyway, so sucks to be us, right?). The upside is a balanced budget with a couple of years in reserve... now the big debate is whether we should get a tax cut or get a bit more social spending or just protect the size of the HK savings account. By the way, I was center-left until I got here, but inexpensive medical care, low taxes, and the ability to save tens of thousands of US$ per year has made me rethink a few things.
TO: Marie, Grosse Pointe
I too want a "fairer and more humane society". To that end I voluntarily contribute to the charities that I feel can best realize that desire. I suggest that you, and others like you do the same.
I can't understand how you can can believe that *forcing* someone to pay for your charities in *any* way contribute to a 'fairer and more humane society'.
It is charity at gun-point, clear and simple.
Tax cuts are like a payday loan, sure you get a little more of your money today but at what cost for tomorrow?
It is amazing to me that 50% of our country might consider themselves fiscal conservatives and vote Republican with the idea that they will allow you to keep more of your money. Their goal is a consumer-driven economy where you must continue spending that money. It is through "free trade" that we have become a consumer-driven economy. The top 1% will continue to drink their bubbly, but the last two bubbles (credit and housing) are about to pop for most of us. Social security is looked upon as a failed system, when it is actually corporate welfare that is broke. We continue supporting industry (airlines for instance) through subsidies and protectionism. Why because they give us jobs? Wrong, the jobs will always be there if the service or product is needed. Oil companies keep their record profits. Haliburton doesn't give a discount during war time. Many businesses do not give benefits despite the incredibly low wages they have been paying. Republicans don't cut spending, just entitlements. When the McMansions depreciate, IRAs take a beating, and the bill for Iraq come due maybe some of you will wake up. For others it will be the next Great Depression.
I am not talking about budget deficits,although it is an issue of paramount importance. But let us look at the ever rising income disparities and the insane amount of loot going to CEO's, their cronies,ball players and entertainers, while the social security system is all but broke and the real incomes of middle classes continue to shrink.
We need a marginal federal income tax rate of 70% just to restore the dignity of the working man and woman, otherwise we may be moving closer and closer to the days of the French and Russian revolutions .
It should not surprise anyone that the size of the CEO paypackages has been inversely proportional to the marginal tax rate.
Instead of a regressive national sales tax, how about a national tax on wealth. Therefore, those who have benefitted the most from the American system pay their fair share. I would ballpark it at about a 2% tax.
Means test Social Security and Medicare benefits. The richest segment of our population has more wealth being handed over to them every day.
People always speak of entitlement programs such as Medicare and Social Security as though they were givens beyond the scope of debate. We need to curtail these programs dramatically and let the chips fall where they may. This will be disastrous, of course, but at least it will be disastrous in an honest, effective, and ultimately productive way. Like the environment, our fiscal collective has a carrying capacity that we have exceeded. Now it's time to pay for our digressions lest our 'life boat' sink and we all drown. Difficult and painful decisions must be made. Let them be made intelligently and fairly, and not with the heart, but the head.
I love the comment Posted By EWR, Curitiba, Brazil--"use the social security tax of 15%as as savings and expect a"slight return". He's living the good life in another country where the cost of living is much lower than here and he spends 'nothing' in the US economy!!--what a leach!! We should cut off all people who get SS in other countries,including the new plan to pay illegal immigrants SS. That would cut our outlays by hundreds of Billions/year!!!
I think 98% of you are all on the same page, as am I. I'm hopeful that this 98% represents a growing proportion of the US population. If it were, there would be hell to pay in DC. However, DC keeps on trucking despite this. I'm wondering why? Do we not have the courage to storm the streets as did our forefathers? Are we in fact content with the status quo and don't feel like organizing civic groups like our forefathers did in the 60's? It is my hope that one day we can come together. Right now, all I have at my disposal is the Libertarian Party. I long for the chance for us all to come together and fight for our liberty. Something happened in the 20th century. I'm not sure what it was, but it's destroying the US financially and socially.
The problem is too many humans, especially the least intelligent and most selfish - always has been the problem. The U.S. faces issues of fighting battles all over the world, soaring national debt, peak energy, a failing social security program, and a decaying industrial complex. But don't worry citizens, leave the problems to the politicians and bureaucrats. Anyone ever read "The Rise and Fall of the Roman Empire"?
All the "Real Housewives of Orange County" and their foolish husbands care about is having more kids, spending more money, and saving little for the future. Pray for your children!
Our problems will begin their slow retreat when we shed our national egalitarian tendencies and remember that a celebration and honoring of elitism is what makes not only individuals great, but nations, societies, and cultures great throughout history.
After reading all the posts I have several things to add.
Social Security should be abolished. The current retirees (50 +) should have their draw off the program. The rest of us should continue to pay into it and if you are below 50, you get nothing back. It is a tax and should be treated as such (i.e. you pay and get nothing!) This won't happen because no politician on the planet has the kohonas to say it. I don't want my kids burdened with it. I already expect nothing from it so let's just get rid of it. Sorry to those under 50 but you should still have time to compensate for the miminalistic amounts you would get for this. A tax is a tax and somewhere along the line we have to bite the bullet.
They should not give out a credit for having kids (and yes I have two). First of all, a credit should not get you a refund if you don't pay taxes! Nobody I know decides that they are having kids because of a tax deduction. Now some people may say they can't afford to have more (or any) kids but in general these people aren't considering their taxes or the like in general. They are considering that they either can't afford daycare and can't afford to keep one parent home, or they are thinking of college. People who feel this way need to think long and hard about their spending and income, perhaps choose a different field and start over; go back to school via employer tuition reimbursement, whatever. You will always have entitlements unless we are all prepared to see squalor and crime increase in this country (which we are not). The time frame should be limited and just paying out for no reason should not be condoned. Have the welfare programs train people for careers and they can contribute to these training programs once they "graduate" from it. It is true some are just lazy lazy lazy and will never get motivated to work. Lowering the assistance given in the way of time frame and amounts may provide adequate motivation but rampant drug use is also at play here and that is another problem we could go on about all day.
Consumption tax would be great but the government will never go there because they would lose the control over what is collected, thus budgeting for them would be a nightmare (which they don't want to do anyway). Spending needs to come under control and a line item veto is needed.
We need to limit terms to ONE for every member of Congress and the President. I don't care how good they are, find somebody else. This is the best way to get people to do what they should; when they aren't facing re-election.
Lastly get RID of government pensions (state and federal). Why these people are entitled to any of my money for their retirement when most employers don't even offer this is beyond me. Can they say 401K??? Save it themselves like everybody else. I know there are some good government employees out there but that doesn't justify the government offering benefits that mainstream American businesses cannot afford to. State pensions are going to bankrupt states one by one..keep your eye on the ball!
Ever since so-called "Conservatives" took control of the Presidency & Congress they have cut taxes for the Rich and corporations (shifting the burden to the poor & middle class); while spending like mad. The Farm Bill; the Highway Bill; the Medicare Drug Program are all programs totally out of control. Did I forget Ethanol?
the only way to stop deficits in america is to reorganize the federal gov.stop blaming the people who pay taxes start blaming the leaders who spend the taxes.they travel all over the world causing problems they have the best insurance and the best retirement in the world
I wonder how much in additional taxes the federal and state governments would be collecting if illegal immigrants were able to pay taxes without fear of getting deported.
They already take advantage of many social services (public schools, health, etc.) If they paid taxes, at least they would contribute to the expense of the social services they take advantage of now.
Also, if they were paying taxes, the incentive of coming to the US may be less since their net income would be much lower. Lowering costs for everyone.
The government found just about very possible way to ding you with taxes and they are not quite done yet. And they will come up with even more complicated and convoluted tax codes, where even a college graduate won't be able to understand, to help pay for all these. Come to think of it, most college graduates don't understand the tax codes to do their own taxes right now.
To fix this you have to start with the politicians themselves. The main problem in my view is that there are too many special interest groups interfering with government policies and that the elected officials have few reasons to actually solve the problems that is facing this country or the average American. Why do think that all these reform talks never amount to anything tangible! If it somehow a compromise is made, there will be plenty of rider clauses to go along with it. Bill Clinton balanced the budget, yes, but he also is the only president to have line item veto power.
My proposed solution would be let's tax the special interest group's so called "political donations" by a factor of 100. You often hear that this or that group spend millions of dollars in lobbying efforts. I like to see them get taxed hundreds of millions in trying to affect government policies. Will this ever happen? I guess not. It's wishful thinking. But, goes to show that the government will tax you ever which way except themselves.
Firstly we should be fighting the war in Iraq. There is a ton of money wasted down the drain or into the pockets of a select few, in kahootz with the bonehead presidential administration we have now. Next, the endless tax loopholes for the ultrarich need to be closed so they can pay their fair share. If you can but a 400ft yacht, you really NEED to pay some damn taxes.
Finally, get control on the immigration situation and capture some of the money being funneled back to the homeland of illegal immigrants.
Do all that and then see if we still need a tax hike. If so... do it, we did our best.
Politicians and newspaper writers have trouble understanding the difference between raising taxes and raising tax rates. John F. Kennedy and GW Bush each enacted enormous tax increases. They raised taxes. Check the history of IRS revenues if you doubt that fact. They raised taxes by cutting tax rates.
As a lazy, spoiled Boomer, I resemble those remarks about expecting others to pay for my nice lifestyle. Look, I only owne 2 cars, only one of which is a large SUV. Although I retired at the age of 50, I can only travel abroad twice a year. Why shouldn't I expect those Generation Y (whiners) to pay for my easy going lifestyle. Don't raise taxes on the rich, just raise them on the Democrats who like to tax and spend anyway. We should cut all government functions in half by the year 2008 and then nationalize health care.
The tax burden has been shifted to the poor???? Impossible! The poor don't pay taxes to begin with.
Tax cuts primarily benefit the wealthy? Of course they do. They could hardly benefit someone who doesn't pay taxes. The purpose of a tax cut isn't to benefit someone per se, it is to stimulate the economy by giving investors more to invest.
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