Try as I may, i can't find whats completely wrong with this. Sure there are bits and pieces that can seem unfavorable. Who doesnt want to keep the money they made? but, when the government says they will raise taxes, how much more out of your paycheck will you not get? Is it really that much?


The economy is shit, no doubt, the housing market is an abortion no doubt etc...etcc..

The US Government is massively in debted to other countries, other superpowers, what happens when they come collecting? how else can the government pay back these debts. Will taxes not help this? Does it not afffect all of us? We cant just keep [rinting more money, at some point we are going to need to answer? if taxes aernt raised, wont our daily living costs just go up anyway? from speeding tickets to sales tax?

I dont know the ansers and im still learning all this stuff but being that we are the most in debt, one of the lowest taxed nations int he world, i see some problems here. not sure why people freak out over more taxes.

Sure, id like tos ee my tax dollars go to useful programs......Im just thinking out loud and trying to learn more.

Hugs.

Like you, I have a but to learn about this as well. But I think one argument you'll see is that the US government should be spending less, instead of raising taxes. We spend a ton of money on war, subsidies, welfare, etc....

There's also the concept that cutting taxes to the rich, and small & large companies actually brings more revenue to the federal government. If you cut taxes to businesses, they have more money to expand and therefore employ more people, which equals more people paying income tax and less people using social services.

Well its like me, i am in debt. none of the money i make is actually mine. i should get a couple mroe jobs untill im out of debt. So yea, spending less will help, but i still need to raise more money.Seriosuly what if China decides enoguh is enough, pay my bitches or else...

reduce taxes. cut spending (especially deficit spending). do nothing to "help" wall street. let the market reprice credit, inflated assets, and risk. rinse. repeat.

The argument for low taxes: Lower taxes leaves more money in the private sector. This will lead to jobs, which will in turn lead to economic growth. By encouraging growth, more money will be made. If more money is made, then the government will actually take in more in tax revenue, even though it is at a lower rate/precentage of income, than it would if it simply raised taxes.

It's the Laffer Curve.

But wherever we currently lie on that curve, one thing's for sure: it would be alot easier and safer to just cut spending.

Agreed. But what do we cut? That is actually cuttable. Like it or not, Social Security/Medicare/Medicaid aren't going anywhere.

Definitely.

I started putting the areas I would cut from, but deleted it to see what others would say. Needless to say, that was #1 on my list.

Also, I'd be up to significantly raising the estate tax, but other than that, let's focus on cutting spending like nuts.

You say Social Security/Medicare is untouchable, but I think you could make politically legit streamlines to the programs. For example, advocate raising the Social Security retirement age, because as people are living longer, shouldn't they also be able to work longer to account for that longer life?

all kidding aside, your instincts are pretty solid. you are correct that at some point our creditors are going to want their money. our enormous debt can be erased only one of three ways:

1.) increase taxes/reduce spending. the easiest and most immediate policy. unfortunately, both policies are not politically popular. no politician ever won office by promising higher taxes and/or a reduction in spending. this is a political non-starter.
2.) default on the debt. we could simply tell foreign central banks and sovereign wealth funds "yeah, about that debt...not yours." unfortunately, this would ruin confidence and faith in america's ability to repay future debt. government debt would become worthless and politicians would no longer be able to spend with the abandon with which they have become accustomed. the folks in DC are utterly dependent on the income stream that foreign nations and banks provide when they buy our debt. politicians are not eager to kill the goose that laid the golden egg. after all, what junkie wants to alienate his dealer?
3.) print enough money to pay off the debt. this is the least sexy, and most disastrous, policy. because monetary policy is both complex and boring, few people have any real interest in or understanding on the subject. printing off the amount of the debt (roughly 12 trillion at the moment) would flood the economy with dollar bills. the increase in the amount of money in the economy would put upward pressure on prices and result in hyperinflation. further, the value of the dollar would plummet. this would likely spell the end of the dollar's role as the world's chosen reserve currency. foreign central banks (and all other holders of dollars, really) would race to dump the currency, resulting in even more dollars being dumped on the economy. you would have hyperinflation upon hyperinflation.

the policy of increasing taxes, be it on income, property, profits, or whatever is ruinous in a downturn. what we're seeing now is both an asset-based and monetary-based contraction. that is, because the economy has been saddled with such enormous losses, the money supply is contracting (wonder why oil is plummeting? there's your answer). when the money supply contracts, several things happen: prices fall, wages fall, profits fall, and interest rates increase. all of these things are painful. but in a climate where business returns are shrinking, prices received for output are falling, and the cost of borrowing is increasing, the LAST thing you want to do is make hiring employees more expensive, which is exactly what imposing tax increases does. falling wages hurt, of course. job contraction hurts. but increasing taxes only makes wages fall faster and contracts, on net, more jobs.

when the money supply contracts, it is imperative that the government not try to support pre-contraction wages, prices, and interest rates. the market MUST reprice all three in light of the new economic conditions. but this is the exact opposite of the policy the government has taken (wonder why unemployment was so high for so long during the depression? gov't attempt to keep prices and wages high), and unfortunately, likely will take.

The age should definitely be raised. But like you say, people are living longer, and presumably will continue to do so, so how much difference is SS spending will this really make? Then there's the issue of how far into the future does it have to be for that age to change. I think we'd both agree that there's no way you can tell somebody who is 6 months away from receiving Social Security that "Oh, we changed it-- it's actually going to be 5 1/2 years for you now." That obviously can't happen. I'd be in favor of the age being increased, but it would have to be gradually. Very arbitrarily: Perhaps by 6 months every 3 years or so, until the age has risen by 5 years in about 30 years. I'm sure that isn't perfect, as I've never really thought about it before, just tossing ideas out there.

I go to work.
I make money.
Why should i have to give MORE away right off the bat?
The Fed takes their part.
The State takes their part.
and some counties/cities take their part.

Leaving me with 30% less money than i earned.


So now i have seventy percent of what i earned.
now i lose 6% of that on everything i purchase.
and now i have a home. I have to pay tax on my property.
and pay what amounts to a yearly tax on my car.


Thats why raising taxes is a problem. Every Cent we earn is taxed before we see it... and then we get taxed again and again.

Might as well combine the corporate income tax and individual income tax, since they come out of the same bucket.

Paul Krugman disagrees with you. Jobs exist because there's work to be done. If no one is buying anything, which is what happened during the Great Depression, then no one will have anything to do. Krugman argues that money needs to be put into the hands of the people who actually buy things.

http://www.nytimes.com/2008/10/17/opini ... ref=slogin

It'd be better than doing nothing.

I think you could do it quicker than that, but I agree you couldn't just go from 65 to 70 in a blink.

Oh, don't get him started on Paul Krugman.

EDIT: I'll give thodoks some time to respond, but if he doesn't, I will later.

Nick, are you being serious? I think you meant Department of Homeland Security.