OT Are taxes killing us financially?

George, just to avoid misimpressions, virtually all of that happened since roughly 1980:

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'Ol Ronnie got us on that deficit path. It was nearly flat as a board before that.

Take the revenues in 1947, compound them at 110% for 63 years and you come up with something close to $14 trillion.. If you want to look at revenue and spending separately, you can select them from the menu at:

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Reply to
Ed Huntress
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Got too much money? Fine! I strongly urge you to donate half your wealth, but only if you specify that it is to go toward the _federal debt_. Atta boy!

-- You are today where your thoughts have brought you; you will be tomorrow where your thoughts take you. -- James Lane Allen

Reply to
Larry Jaques

The problem is who that tax burden falls on.

By reducing gov't by 50-75%, a lot of that would go away. Where to start?

No, not "personnel caps", we need wholesale divestment of personnel by pruning all the useless ABC agencies (yes, entire agencies) who are sucking on the gov't teat and giving nothing back. That's gotta be a full page or ten, in 6-point type.

Maybe we can get that to happen in 2012...but I'm not holding my breath.

True.

-- You are today where your thoughts have brought you; you will be tomorrow where your thoughts take you. -- James Lane Allen

Reply to
Larry Jaques

============

-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).

Reply to
F. George McDuffee

You are a smart guy Ig.

That is exactly the problem...spend and don't tax.

Warren Buffett admits to as much and says we need to tax MORE.

That is why I was so against the tax cuts that the Republicans shoved down our throats at the end of last year.

TMT

The flaw in your thinking is; the more money you give the government the more they will spend. And they won't spend it on reducing the debt. Mikek

Reply to
amdx

What a WONDERFUL IDEA! Now watch a CONgresscritter suggest it, fund it to the sum of a billion dollars, and then we can all watch it fail to do the task.

Indubitably.

If you're OK with it, I'll send this post to my CONgresscritter. Maybe he can accidentally arranged to have a copy left somewhere in the CBO offices. Or send copies to both RNC and DNC offices to see which one attmepts to implement it as a scheme for the 2012 platform. It just might get some airtime.

-- You are today where your thoughts have brought you; you will be tomorrow where your thoughts take you. -- James Lane Allen

Reply to
Larry Jaques

============ Nothing says that the personnel/spending caps must be as high as current governmental employment/spending or that these can/should not be reduced over time.

A more basic problem is a lack of "hard" data in the sense there appears to be no "master" listing or database of all current governmental activities/services at all levels with the result that very considerable overlap exists in some areas, e.g. training for the unemployed, while other vital or at least highly helpful/cost effective activities are not being accomplished, such as a database of medical treatments and outcomes to identify what works and the cost effectiveness. One problem is that almost all of the existing governmental programs are "good things," but there is simply no longer the revenue available to continue to fund and indeed to introduce/implement new programs on the "good thing" basis

It is suggested that each of the existing/proposed governmental activities be entered into a database and "coded" as to the probable effects on society if these were withdrawn or not available by several categories such as immediately life threatening (e.g. air traffic controllers), short/long term effects (such as post secondary education and medical research), impact on economic activity, and amount of money required. There are several other categories, such as the most appropriate level of government to conduct the activity, but such coding/rating would allow [more] logical/rational prioritization for periods of both decreasing and increasing governmental revenues.

An even more basic and seperate failure is failing to categorize governmental activities according to the scheme:

(1) Activities that must be done/provided by government in order to be a government. The amount spent as well as the activity is critical. Some basic level of spending may fall into this category, while higher spending levels may fall into the lower categories. Examples of this are the criminal/civil courts, elections, basic protection of the borders, military and law enforcement.

(2) Activities that the government should accomplish if at all possible. Failure to perform these activities may not result in the immediate collapse of government/society but are important to a tolerable "quality of life" for the majority. Activities such as enforcement of pure food, drug and sanitation laws, adequate el-hi education and many of the basic social safety net services, i.e. people not allowed to starve in US streets.

(3) Activities which the government *MAY* engage in if there is adequate funds available under the spending and personnel caps. Examples of this are extensive post secondary education, medical and basic research.

(4) Activities which IMNSHO the government should not engage in such as the construction of multi billion dollar sports facilities for professional sports teams. This may, and most likely will be, different for different levels of government.

(5) Activities which the government, which again may be different at different levels, must *NOT* engage in.

The assumption is that that activities in categories (4) and (5) will be quickly phased out or never implemented in the first place.

When pigs fly?

-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).

Reply to
F. George McDuffee

Big surplus accounts in the absense of debt or rainy day funds pose a big challenge. Where do you want to put the money? Equities? Bonds? Do you really want the Federal Government acting as a private investor as a matter of policy? I don't think so.

Employment at the Federal level is at an all time low right now, George. You have to go all the way back to 1960 to have parity.

It might also have the unintended consequence of imposing asset sales. We got Louisianna and a bunch of other properties when the French capped their debt. Which State would you like to sell the Saudi's?

Reply to
John R. Carroll

Or when voters elect representatives that will do the above without the need to spell it out for them in a law. The real problem is that there electoral results don't reflect the voter's interests. Just look at what's going on in Congress today as the result of the 2010 election cycle. Nobody voted for this garbage - not even the teabaggers. Any of those guys that aren't having buyers remorse soon will be. The refrain we'll soon be hearing will be to the effect that "I didn't know THAT was going to happen if we did this!".

Reply to
John R. Carroll

Furtunately, that hasn't historically been the case. Properly funding government has lead to a good balance between income and spending throughout the years. We didn't get into trouble until "Debt doesn't matter/Laffer Curve-Trickle Down" government policy got into the mix. Voodoo econ 101 is the real problem. That and the people that still believe in it regardless the facts or result.

Reply to
John R. Carroll

It's even worse than that, Ed. Because of the way it's been done, we have a real capital missallocation issue. Encouraging capital investments at the expense of labor is a very bad idea beyond a certain point. You end up with a shrinking number of qualified purchasers with the majority of new wealth transfering to those that don't consume what the earn. IOW, less economic activity, internally.

Reply to
John R. Carroll

Just 11 years ago, the government was running surplus and used it to pay down debt.

The flaw in your thinking is that the government is not an annoying, overspending relative; it is us. It was voted in by us for our benefit. Whether it lives up to the hope is a good question to ask.

So, I want expenses to match revenues.

i
Reply to
Ignoramus24155

I have met a few rich (or at least well to do, say worth 5-10 mil or so) people. For the record, 1 million no longer qualifies as rich, in my eyes.

There is quite a few of them, who think that they would become better off, if they could reduce their taxes by a few extra bucks. "Starve the government", "f*ck the poor", "I need the money" and all.

I believe this to be shortsighted. First, they are on the flat part of the utility curve, and extra money just does not add as much to their happiness.

Second, any rich person wants to a) preserve his capital and b) live in a stable society, in order to enjoy the capital and pass a part of it to his heirs.

Preserving capital is difficult, if deficits turn into inflation.

Similarly, living in a stable society, where their wealth would not be taken away or evaporate due to various social upheavals, etc, comes at a cost. Stable and competitive society is not possible if the government cannot keep expenses that are commensurate with the level of expenses that is needed to live in a stable environment, fund the military, education for working class, etc.

Lastly, "upward mobility", which is ability of people to become rich, has a flip side, which is a "down mobility". Quite often, rich people become poor, due to one mistake or another, or just loss of ability of their business to make a profit.

It sucks to become poorer, but it sucks much worse if this newly poor person cannot even find health insurance.

In light of this, for a rationally minded wealthy person, would gladly trade a few percent of their income in exchange for social stability, ability to find qualified workers, firm currency, and so on.

Warren Buffett is one of such rationally minded people.

i
Reply to
Ignoramus24155

Yeah! For years, I have paid almost NO taxes, and have been wondering WHY? This year, business has been REAL good, some of my customers got a bundle of ARRA money to spend, and sent some my way. So, I am only going to get a little back this year. At least I didn't get caught under-paying.

But, many years I have losses in investments or Pico Systems doesn't make much, then it offsets income from my "day job". The home office expense and a large family help, too.

I can't say what the percentage is yet, still working on it. I use the program "tax cut", it does what the accountant does, for less than 10% of their fee. I still have to assemble all the records, then just type into the right forms. I don't do their stupid "interview", it is a huge waste of time, I just import last year's data and then enter all the new data. At one time I had over 50 items on the depreciation schedule, now I just have about 4. Automatically carrying just that data over from year to year saved me many hours.

Jon

Reply to
Jon Elson

The Fed is a private business George. They don't issue US Government debt. The Treasury Department does that.

What you are suggesting is more of the sort of investment we currently have in GM rather than less. The best thing to happen to GM, and by coincidence the US tas payer, was the Toyota hubub. Soemthing cause by a misstatement by the DOT Sec. in a fit of pique. You wouldn't want to see that in the market on a permanent basis. People would stop making investments in the US unless the US government was a partner. We'd look like China.

It isn't necessary to have a rainy day fund if you can issue your own debt and sell it. I also isn't a good idea to do away with public debt completely.

What is a BAD idea is to think or act as if public debt is either good or bad in and of itself. It isn't. It's what you get that counts in the end. Were that not the case, nobody would ever take on a mortgage.

Reply to
John R. Carroll

Anyone that wants to use this as a basis for a letter to their congressional representatives, please feel free to do so.

Identify yours at

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and
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Be sure to bookmark their webmail page for easy nagging.

One of the first steps in problem solving is the identification of, and agreement on, what exactly is the problem, and to do this requires accurate and reliable records. Unfortunately, we as a nation have not even started on this.

-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).

Reply to
F. George McDuffee

This is the basic flaw in the Constitution, i.e. the assumption that we have a government of honest men, albeit with differing opinions, for honest men. Times change and people change, and it is clear that laws Draconian civil and criminal penalties are now required to enforce what has generally in the past been controlled by ethics and social acceptability.

As you have frequently observed, the problems are far more mental health than financial/fiscal. Behavioral Economics is paralleled by Behavioral Politics exacerbated by pathological levels of denial.

Move along folks, there is nothing to see here....

IMNSHO the litmus test will be the attempted increase in, or even the elimination of, the national debt limit.

If the debt limit is not increased a multitude of problems, anomalies and contradictions will be forced to the surface with large increases in social instability. If the debt limit is increased or eliminated, then it's "Apres moi le deluge" time to be followed by collapse ala the Ancien Régime of France.

For a preview of what will occur in increasing numbers of large metro areas see

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Without a healthy middle class to spend the money that supports small businesses and pay the taxes that provide city services, revitalizing the city will be near impossible.

People with money and means are the ones who have left or are planning their getaway. The people who are staying are increasingly poor and isolated.

But there's a far greater challenge in figuring out how to aid an impoverished population as large as what's left in Detroit. There's a need for the kinds of jobs that don't exist anymore in this market and for the education to compete for more advanced jobs. There's a need for better city services than Detroit residents are getting now.

For the immediate future, Detroit has substantial population that cannot support itself and certainly cannot sustain the city.

-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).

Reply to
F. George McDuffee

Start with California, then Florida and Illinois. I doubt the Saudi's would be interested in Michigan.

-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).

Reply to
F. George McDuffee

Indeed these are in the absence of spending/personnel caps. First pay off the debts and fund the pension plans, possibly by purchase of annuities, then when this is done, after many years, try gold, silver, investment in state owned LSTR power plants or financing of municipal plants, investment in coal liquefaction plants and thorium/REE recovery from coal fly ash.

The bond market is many times bigger than the stock and/or commodities market, and the US governmental bonds are the largest chunk of the bond market, thus the government is not only an investor, but the prime speculator and market manipulator, e.g. FRB interest rates.

-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).

Reply to
F. George McDuffee

I have a reason to have an accountant, and feel that the accountant expense may be my best investment.

i
Reply to
Ignoramus24155

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