Get Ready for the Tax Sunset

[DoraM]

The 0-10% will never happen. That's part of the problem right now, ~50% pay no income tax at all. Some get money back without paying in.

With 50% having no skin in the game (paying 0 tax), how in the world will people ever vote to reduce spending? It makes no sense to cut spending when you don't even have to pay a cent for the programs.

 

[Westernskies]

Because both the School Lunch and the Food Stamp Programs were created NOT to feed the hungry, but to support and subsidize the food industry and its subsets (meat, dairy, etc.). Yet another form of corporate welfare.

The School Lunch Program, in particular, provides an outlet for gov't surplus commodities, many of which, like cheese, are also handed out at food banks. This is why the lowest-grade, e.coli-laden ground beef ends up on your child's lunch tray.

Facts to support these notions? or just more anti-business rhetoric?

 

[SteveL]

The problem with the entire discussion of the deficit/taxes is that our economy is a system that will respond to whatever is done. There are only a few components to GDP. If the govt. portion goes down, then GDP will also decline unless personal spending or business spending rise to offset the reduction in govt. spending. If there is a quick reduction in what the govt spends, there will be a major recession/depression. This will in turn further reduce tax collections and the deficit will get higher. This is basic macroeconomics.

 

[MasterBlaster]

The problem with the entire discussion of the deficit/taxes is that our economy is a system that will respond to whatever is done. There are only a few components to GDP. If the govt. portion goes down, then GDP will also decline unless personal spending or business spending rise to offset the reduction in govt. spending. If there is a quick reduction in what the govt spends, there will be a major recession/depression. This will in turn further reduce tax collections and the deficit will get higher. This is basic macroeconomics.

yet going massively into debt strangely doesn't show up in GDP numbers.

Funny how GDP alone doesn't tell the whole story.

 

[youbet]

or inflation style by the Fed printing dollars.

There's your answer. The approach least likely to pin blame on particular politicians or parties will win and printing money seems to be the one. Citizens are way too dumb to realize what happened when a gallon of milk is $5.00.

 

[youbet]

I'd rather have it perpetually on the edge of insolvency. It seems to be the only way to stop ramping up the spending.

+1

That is indeed the way it works.

 

[eridanus]

With 50% having no skin in the game (paying 0 tax), how in the world will people ever vote to reduce spending? It makes no sense to cut spending when you don't even have to pay a cent for the programs.

The lower the income, the less likely someone will vote.

 

[Westernskies]

The lower the income, the less likely someone will vote.

Irresponsibility manifests itself in many different forms.

 

[Hamlet]

Income taxes are only 42% of Federal revenue.

Everyone who works pays FICA and Medicare taxes, everyone who buys something pays corporate income taxes indirectly, everyone who drives pays Federal gas taxes.

I wish people would stop pretending that income taxes were the whole story.

Everyone has at least some skin in the game.

With 50% having no skin in the game (paying 0 tax), how in the world will people ever vote to reduce spending? It makes no sense to cut spending when you don't even have to pay a cent for the programs.

 

[Badger]

Because both the School Lunch and the Food Stamp Programs were created NOT to feed the hungry, but to support and subsidize the food industry and its subsets (meat, dairy, etc.). Yet another form of corporate welfare.

The School Lunch Program, in particular, provides an outlet for gov't surplus commodities, many of which, like cheese, are also handed out at food banks. This is why the lowest-grade, e.coli-laden ground beef ends up on your child's lunch tray.

I don't know about subsidizing the food industry (could be or not) but I never have understood why if a family is receiving food stamps should they also be getting free school lunch (and breakfast) and receive food at food banks. This seems like triple dipping to me. Food stamps are supposed to be providing for ALL the family's meals INCLUDING the children's breakfast and lunch.

 

[Zathras]

... I never have understood why if a family is receiving food stamps should they also be getting free school lunch (and breakfast) and receive food at food banks. This seems like triple dipping to me. Food stamps are supposed to be providing for ALL the family's meals INCLUDING the children's breakfast and lunch.

This is a common misunderstanding.
The Food stamp program plans is a supplemental program. It is not intended to supply all the funds a person/household needs. However, you raise a good point.
In MN, as I recall, the logic behind the school programs is that kids learn better when they are not starving. This actually also seems to improve focus, concentration and test scores.
However, there is a lot of misuse and waste in the food stamp program... And I am getting way off topic I realize.

Back to the topic

 

[Midpack]

However, there is a lot of misuse and waste in the food stamp program...

That's the point. They lost me in the early 90's when I found out one of my peers, a well paid Plant Engineer (Dept Mgr) with 8 kids was getting food stamps. That's pure BS, and I never saw him in the same light after that...

 

[Animorph]

And how do you get around this chart with that POV? Fact is, the generations before us got way more than their "payments" would have produced otherwise (not sure if we've crossed that line yet or not). You have not made any contributions toward your own Soc Sec, nor has any generation in the US. I've been standing in line for the last 35+ years, but I don't really think I'm going to get the benefit earlier generations got, how is that possible without gouging the generations that follow?

We do have a SS surplus, enough to keep it (not govt) solvent through 2037 or so. We paid for earlier retiries, but we also accumulated enough to substantially cover ourselves as well.

 

[Badger]

Zathras, Thanks for the explanation. Maybe this should be a different topic. I just see this (abusing the tax dollars collected) as part of the overall problem. FWIW many decades ago I appreciated the help I received from 2 months of food stamps. I found it to be embarassing and I got off them as fast as I could. However, because I was frugal with them, bought fresh produce in season, relied on beans, PBJ, etc. (supplimented with a little chicken) as my main sources of protein, and used rice, pasta, and potatos for carbohydrates I was able to stretch my food stamps for 4 months. They were my only source of money for food so it was no suppliment regardless of what the intention is.

My wife, a recently retired teacher, is able to relate hundreds of "first hand knowledge" stories about the abuse to the system that our tax dollars support. Although this is just one area of abuse, I believe that collectively eliminating the abuses/waste and pork, reducing debt, and spending within our means would go a loooooooooog way to correcting the country's financial problems.

I admit I don't understand the complexities of national economics but I would think the principles would be similar to the kind of budgeting most of us here advocate.

 

[ziggy29]

We do have a SS surplus, enough to keep it (not govt) solvent through 2037 or so. We paid for earlier retiries, but we also accumulated enough to substantially cover ourselves as well.

Whether we've had a surplus for the last couple decades is a matter of semantics and definitions, I think. Depending on how one defines the terms -- and either way is defensible in some ways -- either we have a surplus, or we spent it all to bring the budget closer to balance year after year.

 

[donheff]

Whether we've had a surplus for the last couple decades is a matter of semantics and definitions, I think. Depending on how one defines the terms -- and either way is defensible in some ways -- either we have a surplus, or we spent it all to bring the budget closer to balance year after year.

Doesn't seem like semantics to me. Calling the SS surplus a mater of semantics seems to me to be a technique used by SS opponents to justify doing away with it. The surplus was generated on the basis of a specific legislative promise and was tied to substantial taxes on main stream level wages (15%) above and beyond income taxes. We payees lent that money to the Government to pay for wars, enable tax breaks, etc. To now treat that loan as just a part of the general deficit that should be made up by reforming SS itself is, in effect, to retroactively convert the payroll tax to a very regressive income tax. And proponents of doing this don't want even modest (Clinton era) tax rates to apply to the rich? Shameful.

 

[ziggy29]

Doesn't seem like semantics to me. Calling the SS surplus a mater of semantics seems to me to be a technique used by SS opponents to justify doing away with it.

Agreeing to disagree and moving on. It's not always an attempt to derail SS. It's sometimes a request to get it off budget and stop using it to mask the true size of deficits (i.e. without the SS surpluses the "balanced" Clinton budgets were $100B+ deficits -- better than most of what we've seen, but IMO not truly balanced). That's all I have.

 

[FinanceDude]

If govt has proven anything, it is they squander away surpluses when they occur as badly as most lottery winners.............

 

[Animorph]

If govt has proven anything, it is they squander away surpluses when they occur as badly as most lottery winners.............

I remember when we had the budget surplus. The Dems were talking about how we should "spend" the surplus! The Reps were saying we needed to cut taxes. (I was saying pay down the debt, but I never heard the pols saying that). Not surprising where we are now. I was happiest with the tax cuts because I was figuring I'd be paying down the debt in the future and at least this way I'd have some extra money to do it. Hopefully we can make some progress on the deficit before things really go bad.