Middle class tax cuts
- Thread starter UncleMark
- Start date
I do not think it is a good idea. Even if we cut spending, we cannot cut revenue too or nothing really changes.
I'm not a deficit hawk at all, I'm the opposite. But even I think it's a bad idea.
We don't need tax cuts for anyone right now. Selective tax increases, sure. But no cuts.
Tax cuts depressing government revenues, a myth as old as time.
She panders to populist positions just like Trump. It’s pathetic that’s what we have the choice of.
The only true tax cut is a spending cut.
I’m for tax cuts. Bring them on President Harris.
I wasn’t even alive when Art Laffer first taught everyone about the foolhardiness of leveraging more taxes to increase government revenues.
Yet the moronic naysayers persist. This board has too many liberal arts graduates and it shows.
Yet the moronic naysayers persist. This board has too many liberal arts graduates and it shows.
I really loved this speech.
Opponents will expect us to be defensive, but they have it backwards. When they call the slightest spending reductions “painful”, we will say “If government spending prevents pain, why are we suffering so much of it?” And “If you want to experience real pain, just stay on the track we are on.” When they attack us for our social welfare reforms, we will say that the true enemies of Social Security and Medicare are those who defend an imploding status quo, and the arithmetic backs us up.
- Mitch Daniels
This is a bit of election season smoke and mirrors.
Tax rates are set to increase under current law at the end of 2025. If Harris extends current rates under a new law for some...that's technically a tax cut.
Tax rates are set to increase under current law at the end of 2025. If Harris extends current rates under a new law for some...that's technically a tax cut.
You need to read up on Laffer if you are going to use him. He never said not believed all tax cuts would increase revenue. He believed there was a curve and in 1980 we were on the wrong side of the curve. He genuinely had no idea where the optimal tax rate was. It is very possible we are on the side now where tax rates are too low.
Show your data if you really believe that. What I see is the govt collecting a much lower % of GDP than it did in the late 90s.
Taxes have been consistently between 16-19% the last 50 years. Also, I think we’re collecting slightly more today than we did in the early 80s.
This is true - at least the first part.
And there is no magic formula to determine where the top of that curve is. It’s a moving target, and affected by all kinds of other variables. It’s also not something that would endure - a cap gains cut might lead to a rush of realization activity (and tax revenues, and capital investment)…but it probably wouldn’t last long.
We need to close a massive fiscal gap. That means some combination of tax hikes and spending cuts.
But our policymakers virtually never do the latter and aren’t all that bold with the former…trying to do them in a way that minimizes their own (political) pain.
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Much lower?
Not really. Tax revenues have always bounced in a range of about 3-4% of GDP. And they’re more sensitive to output than rates, really.
Issue is we've historically been close to 20% when the unemployment was low... And we're only at about 16% right now even though unemployment is 4%
This is correct.
They bounce around, but there hasn’t ever been much of a trend.
There has been a trend on the spending side, though. That’s what needs to be dealt with. But I think politicians would rather put their balls in a vise grip than pare spending.
Tax revenues have rarely reached 20% - and when they have, it ain’t for long.
We don’t have an undertaxing problem.
It was 16% last year. It was in the 18-19% range during Clinton's 2nd term. That would be close to $1T in addl revenue annually.
So we just need to figure out how to keep having bubbles that produce unexpected inrushes of tax revenue.
Not really. What we actually need to do is bend down the spending curve. I could get behind some tax hikes, but only if they’re pared with spending cuts.
Congress can’t very well ask us to tighten our belts if they’re never willing to tighten their own.
What would your proposal be to bring federal spending back in line with something our economy can afford?
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It's a spending issue. Always has been.
Interest, SS/Medicare/Medicaid are basically spending everything the govt takes in.
You would need to zero out the entire rest of the federal govt to balance the budget.
Unless it's a massive reduction in benefits for old people it's a waste of discussion. Discretionary spending is already well below long term average.
I don’t disagree. Let’s figure out how we can do that. Because there isn’t a realistic scenario where we can afford the benefit structure we currently have in place. And pretending it isn’t an unsustainable problem isn’t going to work, either.
But I also don’t think any such discussion has to put discretionary spending off the table - even if that isn’t the primary source of our structural imbalance.
It's been promising to see these two presidential contenders debate the pros and cons of the entitlement systems as we chart our way forward through these troubled waters.
There are way too many issues in this country that need to be dealt with, but our elected officials just say “well, what are you gonna do?” With the current quality of elected officials (Banks is going to be a US Senator???), I don’t see things improving.
Where would you increase taxes?
I would like to see them make the tax brackets a little more linear.... it jumps from 24% to 32%.
I still like the freeze for discretionary. The tax increases can come from raising the Social Security cap which can go a long way to stabilizing Social Security.
We’re lucky to have them both hashing it out. One on Saturday night live the other driving a garbage truck
In that case, I was talking about the Dot-Com bubble that temporarily led to unexpected bursts of tax revenues at all levels of government.
I mean, it would be nice if we could always have one of those going on to fill the coffers. But, alas…
Not as long as you might think.
There’s no cap for Medicare taxes, and it’s on a crash course, too. In fact, the projected shortfall for Medicare is significantly larger than Social Security’s.
Whatever we do with tax hikes is going to need to be broad-based. The notion that we can get out of this hole by taxing small numbers of very wealthy people is folly. And it’s driven more by political math than economic math.
Still, there is no taxing formula that is going to consistently produce the revenue streams we’d need to afford the government we have in place.
There is an X factor in our favor m, though: productivity gains through the advancement of AI.
I’m right there with you.
They’ll continue to look to the Fed to create the illusion that it’s not a problem they need to deal with.
Remember, the top priority of politicians, whatever they say, is always their own reelection (and gaining influence, etc).
The elephant in the room when it comes to balancing the budget is mandatory spending which makes up about 60% of the federal budget and includes popular programs such as Social Security and Medicare which represent a large share of the mandatory spending.
To date proposals to deal with Social Security and Medicare have faced the metaphor "third rail of politics" meaning the topic is suicidal for politicians.
Over on the discretionary side of spending which has been declining as a percentage of the budget since 1960 the big item is defense spending which like Social Security and Medicare has the support of a majority of our citizens.
Like it or not, We The People elect the representatives who must deal with the federal spending and we like programs such as Social Security, Medicare, and defense spending.
To date proposals to deal with Social Security and Medicare have faced the metaphor "third rail of politics" meaning the topic is suicidal for politicians.
Over on the discretionary side of spending which has been declining as a percentage of the budget since 1960 the big item is defense spending which like Social Security and Medicare has the support of a majority of our citizens.
Like it or not, We The People elect the representatives who must deal with the federal spending and we like programs such as Social Security, Medicare, and defense spending.
One has gotten a W2 her entire working life. Duhhhhhh gimme 3 deductions. I like that big refund. Hon you’re giving the gov an interest free loan. I don’t know what you’re saying Dougie!!
The other doesn’t pay taxes
How did the dot-com bubble fill the coffers specifically? Are you sure the EITC didn’t play a role?
They may be collecting a lower percentage but their revenue is still going up. I don't know what caused the dip in 2023.
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