The Fed Shutdown Poll and Megathread

[Neil]

Based on that?  I mean, obviously Dorsey is a kook, but no one can deny that the Republican tax strategies haven't been very successful.

I take it back.  Me culpa.  I thought he said Democrats were more serious about deficit reduction.

Deficit reduction is the 'third rail' of American politics.

[Hansmeister]

The problem is that we currently have an extremely progressive tax system which will always lead to wild swings in revenue.  We need a broader, lower tax base instead of the high marginal rate tax system we have now, which would ensure a more stable tax income than the current feast or famine system.  Curiously, changes in income tax rates over the last few decades have had almost no impact on federal revenue on the aggregate, except for the increasingly wild swings in revenue during the economic cycle.

Extremely progressive?  You have got to be kidding.  Think of all the taxes people pay:  income tax, SS/Medicare, investment income, sales taxes, or property taxes.  Not all of those are federal taxes, but at the end of the day those taxes have to be paid.  Only the income tax is progressive of the bunch.  The rest are flat or regressive.  The totality of them is hardly "extremely progressive".  Think before you plagiarize some groupthink tank talking point.

If you look at only federal income tax I guess.

Nope, all taxes including Social Security.


The top quintile pays %52.8 of all taxes, the bottom quintile a whopping %2.6.

http://en.wikipedia.org/wiki/Progressivity_in_United_States_income_tax


That the rich are somehow not paying their fair share of taxes is pure democrat demagoguery.

[MadImmortalMan]

Needs more Bill Clinton.





Actually, let's just pass his 2000 budget again. Who needs homeland security anyway.

[Admiral Yi]

Actually, let's just pass his 2000 budget again. Who needs homeland security anyway.

Bubba's revenues got fat off of capital gains.  We would need to engineer another stock market bubble.

[Hansmeister]

I think CdM has amply demonstrated now why is is such a fan of Fidel Castro.  That approach has worked wonders for Cuba, after all. 

[Ed Anger]

Needs more Bill Clinton.





Actually, let's just pass his 2000 budget again. Who needs homeland security anyway.

After seeing that 6 year old girl getting a TSA patdown, might as well. This country is fucked.

[grumbler]

In 2010, federal revenue as % of GDP was under 15 percent.  This number was cyclically impacted but absence a significant increase in tax, it is unlikely to get above 19%.

Total actual federal spending is at 23.8%. 

Net interest is 1.4%.  That is almost certainly only going to increase at this time, as interest rates paid by the feds are unusually low.
Of this 13.2% is mandated: social security (4.4), medicare and medicaid (5.0), other (3.7)  (figures are netted out and rounded).
The "other" consists, in descending order by amount of: unemployment benefits, retirement benefits for federal employees, earned income and child tax credits, food stamps, and veterans benefits.
One can expect unemployment benefits to decline significantly in the future; however this is more than offset by the fact that in 2010, "other" included a $110 billion profit from TARP, which is unlikely to recur.

Let's take these in order:
1) Social security - if untouched, these outlays will only increase in the future.  The likelihood of significant cuts being made can perhaps be gauged by the fact that the Ryan plan, which probably represents the maximal starting point for discussions about cuts, does not touch social security.  Ryan's earlier roadmap plan did discuss social security reform, but would actually have increased outlays even more until around 2055 (though at the same time increasing payroll tax).
2) Medicare/Medicaid: Absent massive restructuring of the provision of health care in the US, costs are not likely to decrease.  realistically that limits what can be done in the short term to cut federal outlays.  Again, the Ryan proposal does not contemplate decreasing these outlays, indeed it would involve increasing them as a percentage of GDP, just much more slowly than under the current anticipated baseline.
3) "Other" - cuts in this amount will be complicated by the disapperance of the massive TARP windfall in future years.  But let's say for the sake of argument you could cut 25% across the board for everything else in this category.  Assuming a return of unemployment benefit costs to "normal levels" that gives back about 1 percent of GDP.

So the mandated baseline + interest is about 13.6% assuming strenuous, Ryan-like efforts to cut.  With interest costs and social security likely to arise, I think a 15 percent baseline is reasonable, again assuming stringent cuts in "other" and a Ryan-style gutting of medicare and medicaid.

That leaves 4% for all discretionary spending if balance is to be obtained at the current tax structure.
Actual discretionary spending in 2010 is 9.3%
Defense alone is at 4.7%.

Interestingly, the way the Ryan proposal deals with this problem is to ignore it.  The Ryan proposal would cut all spending other than social security and health benefits to 6% of GDP by 2022 and to 3.5% of GDP by 2050.  This is not remotely feasible.

It should be apparent that even if determined efforts are made to cut down the federal budget, taxes have to rise.  My rough guess would be a rise until revenue levels ar reached 22 percent of GDP assuming strenuous efforts to cut spending, 24 percent if moderate but still significant efforts.  This would involve an increase in revenue take of over 15% in the strenuous case or 25% in the moderate case.

Thanks for trying to stir up a sane and informed discussion on the issue.  You picked the wrong forum, but I, at least, appreciate the effort.

[DontSayBanana]

The problem is that we currently have an extremely progressive tax system which will always lead to wild swings in revenue.  We need a broader, lower tax base instead of the high marginal rate tax system we have now, which would ensure a more stable tax income than the current feast or famine system.  Curiously, changes in income tax rates over the last few decades have had almost no impact on federal revenue on the aggregate, except for the increasingly wild swings in revenue during the economic cycle.

Extremely progressive?  You have got to be kidding.  Think of all the taxes people pay:  income tax, SS/Medicare, investment income, sales taxes, or property taxes.  Not all of those are federal taxes, but at the end of the day those taxes have to be paid.  Only the income tax is progressive of the bunch.  The rest are flat or regressive.  The totality of them is hardly "extremely progressive".  Think before you plagiarize some groupthink tank talking point.

If you look at only federal income tax I guess.

Nope, all taxes including Social Security.


The top quintile pays %52.8 of all taxes, the bottom quintile a whopping %2.6.

http://en.wikipedia.org/wiki/Progressivity_in_United_States_income_tax


That the rich are somehow not paying their fair share of taxes is pure democrat demagoguery.

How about some numbers that don't come from the Tax Foundation by way of Wiki?  Or at least some data that's newer than 2004?  Come to think of it, the implication that the low quintile aren't paying their fair share is pretty silly, since that includes not only zero earners but also earners below the poverty line who basically can't afford to be taxed.

[DGuller]

You're a kook.

No, I'm just not a "pox on both houses" kind of guy.  Sometimes one side really is less serious than the other, there is no magical self-balancing mechanism I'm aware of that keeps Democrats and Republicans equally serious and nutty at every point in time.

[DGuller]

The top quintile pays %52.8 of all taxes, the bottom quintile a whopping %2.6.

Next time you should plagiarize from a grouthink tank with a knowledge of basic math, or at least a basic sense of intellectual honesty.  This kind of non-sequitor sounds like something straight out of WSJ editorial page.

This kind of statistic is meaningless when you want to make a statement about tax system progressivity.  I hope it is obvious why it's meaningless:  you cannot separate higher taxes paid because of progressivity, and higher taxes paid due to higher income.  Only a head tax would look level with this statistic.  Even with a perfectly flat tax system top quintile can pay 90% of the taxes, if they earn 90% of the income.

[MadImmortalMan]

Well http://www.youtube.com/watch?v=661pi6K-8WQ this is a graphic illustration how this is of course utter nonsense.

Amusing. But we already know this. Also, his halting speech is annoying.

[Hansmeister]

Well http://www.youtube.com/watch?v=661pi6K-8WQ this is a graphic illustration how this is of course utter nonsense.

Amusing. But we already know this. Also, his halting speech is annoying.

That "we" apparently doesn't include CdM. Or the Obamateur.

[Hansmeister]

Next time you should plagiarize from a grouthink tank with a knowledge of basic math, or at least a basic sense of intellectual honesty.  This kind of non-sequitor sounds like something straight out of WSJ editorial page.

This kind of statistic is meaningless when you want to make a statement about tax system progressivity.  I hope it is obvious why it's meaningless:  you cannot separate higher taxes paid because of progressivity, and higher taxes paid due to higher income.  Only a head tax would look level with this statistic.  Even with a perfectly flat tax system top quintile can pay 90% of the taxes, if they earn 90% of the income.

Before you said something that stupid you might have simply glanced at the adjacent column that listed that information.

[DGuller]

Next time you should plagiarize from a grouthink tank with a knowledge of basic math, or at least a basic sense of intellectual honesty.  This kind of non-sequitor sounds like something straight out of WSJ editorial page.

This kind of statistic is meaningless when you want to make a statement about tax system progressivity.  I hope it is obvious why it's meaningless:  you cannot separate higher taxes paid because of progressivity, and higher taxes paid due to higher income.  Only a head tax would look level with this statistic.  Even with a perfectly flat tax system top quintile can pay 90% of the taxes, if they earn 90% of the income.

Before you said something that stupid you might have simply glanced at the adjacent column that listed that information.

I didn't glance at anything, I just glanced at the fallacious argument you made in this thread.  It's not my job to make sense of your nonsense.  Making a fallacious argument when trying to support a point does not automatically make the point invalid, but it does display either a lack of competency or a lack of honesty on the past of someone making the argument.

[CountDeMoney]

I think CdM has amply demonstrated now why is is such a fan of Fidel Castro.  That approach has worked wonders for Cuba, after all. 

A nation that keeps '58 Studebakers and Edsels running is doing something right.  How many of them do you see on America's highways?
I rest my case.