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CBO to 'everyone': Bend Over!
The Congressional Budget Office came out with a thick report titled: (love the graphics)
This 240 page beast has something for everyone to hate. More than 100
recommendations on ways that expenses could be cut, or revenues
increased. You’d have to go through this line-by-line to find which idea
will hurt you worse. My guess is that the average American family will
get hit by at least a half dozen of the options.
There are a number of suggestions that may prove “popular”. For example a
transaction tax on large financial institutions generates $71b over 10
years.
Impose a Fee on Large Financial Institutions = 71b
Increase Alcohol taxes.
Increase All Taxes on Alcoholic Beverages to $16 per Proof Gallon = 60b
Or any of these:
Raise Tax Rates on Capital Gains = 48b
Set the Corporate Income Tax Rate at 35 Percent for All Corporations = 24b
Tax Carried Interest as Ordinary Income = 21b
Reduce Funding for the Arts and Humanities = 5b
Cut the Number of Aircraft Carriers to 10 and the Number of Navy Air Wings to 9 = 1.8b
These things look interesting. But as you go through the report you get
to see just how big these numbers are. While it may sound good to raises
taxes on booze it really does not make much of a dent in the big
picture. We need big numbers. Some of the suggestions that actually help
fill the bucket:
Impose a 5 Percent Value-Added Tax (over 10 years) = +2.5 Trillion
Impose a Price on Emissions of Greenhouse Gases = 1.8 Trillion
Limit the Tax Benefit of Itemized Deductions to 15 Percent = 1.2 Trillion.
Limit or Eliminate the Deduction for State and Local Taxes = 862b.
Increase Individual Income Tax Rates (1% increase on income and AMT) = 702b
Accelerate and Modify the Excise Tax on High-Cost Health Care Coverage = 650b
Increase the Maximum Taxable Earnings for the Social Security Payroll Tax = 457b
Tax Social Security the Same Way That Distributions from Defined-Benefit Pensions Are Taxed = 438b
Accelerate and Modify the Excise Tax on High-Cost Health Care Coverage = 310b
Increase Excise Taxes on Motor Fuels by 25 Cents = 291b
What’s not to hate about these ideas? The one that stands out in my opinion? We’re getting a VAT.
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Besides the craziness of how much more you would get taxed earning, and taxed again spending, on top of the state taxes:
Some of these numbers don't add up IMHO.
A 5% VAT puts $2.5T in the coffers - and 3.5% increase in income tax would do the same?
I expect VAT covers a lot more money flows than those income taxes...
Dork:
Understanding Americans:
A nation of children whose deepest motivations are based on values incorporated in the concept of "Progressive Materialism", i.e more and better "stuff".
A common bumper sticker here reads:
"Whoever dies with the most toys wins!"
Charming, aren't we?
Bend over for fascism.
Why these idiots are being paid, when they obviously suffer from extreme reaganomics groupthink is beyond me.
Glass-Steagall and go tell the fascists (who want to either cut or print) to follow their leader.
Maintaining an Empire is very expensive even if the days of the Empire actually having some useful purpose ended decades ago. They won't drop it nor will they recognize the costs so we extend and pretend until either we can't anymore or they engineer some way to make the Emprire seem essential. As it is they don't have any good options. China is not beligerent enough to justify the Empire, North Korea is a joke, Pakistan is a possability but they actualy have weapons (that we gave them) so things could get messy so that leaves Iran. Now I wouldsay that nobody is stupid enough to actually believe that Iran constitutes a threat to the United States but these are Americans we are talking about here and they are as dumb as they get for marginally literate people. Really quite embarrasing.
They believed Iraq, why not Iran?
The fact is that we built up Iran ourselves when we cancelled Saddam. In terms of middle east geo-political strategy that was about the stupidest move ever.
Clawback the ill gotten gains of the upper 1percent. The pitchfork and guillotine wielding revolutinaries will not appear until food stamps and unemployment disappears.
I don't understand Americans - you work like dogs but spend your credits on energy - not products and services.
Ireland followed Boston without a reserve currency and waved goodbye to Berlin with disastrous results
Without understanding value you cannot hope to gain wealth
GDP is just a activity measure - it cannot quantify existence.
Tax does not service debt directly, it modifies your existence wether for good or ill.
A country which just needs to import oil to thrive and is Independent in pretty much everything else should at least have a substantial tax on these imports.
Taxing labour and / or reducing wages is just dumb.
A gasoline tax can change the dynamics withen the system but seems culturally impossible in the US with devastating results for both the US and the planet.
So, you are saying we are effectively screwed. You'd be right there.
Well Rocky yee dramatically reduced your technology and capital spend beginning in the late 60s - this increased consumption for a while but you cannot sustain the American dream if both consume and give up the Chuck Yeager meme - if you want to continue to have excess energy you need to spend on technology.
No bucks no Buck Rodgers.
Europe is also screwed as it reduced its capital spend but seems more prepared for a feudal existence somehow which is very sad but dull / sustainable.
I would like to see a bit of both conservation and dynamism but I just don't see it.
conservation and dynamism, of value added sustainability; first of which human mind set. Greed and going it alone to be top of the heap, you deserve to be slaves of your own bent perception. Can't be worshippers of jungle law and hope for pursuit of happiness. Three thousand years of logic and value systems thrown down the tube... to create american idol. It belongs with Rambo. In the junk heap.
No national leader has talked about seriously energy conservation since Jimmy Carter... it's pathetic.
I can solve the problem in two words:
Natural gas.
try fracking it and you'll love eating it with your water and your plumbing. Its not the solution. Fossil fuels is now depassé. Pity that the time horizon of lost thirty years makes then next thirty such a grind until we climb into something sustainable. Just look around you if you think hyper consumption does not now have a negative rate of return, both energy and pollution wise. Translates into 'human wise' where the buck stops.
STOP SPENDING... Amazing how that may help!
I don't know about a VAT. Every state in the US is looking to increase the sales tax to help budget gaps and they might see an indirect national VAT on goods as competing for final revenue. Congress will have to vote on a VAT tax after all and they might want to protect their home districts. Personally I see nickle type taxes coming with fees on everything.
Was there any talk in the report about ending the Bush tax cuts?
More tax is not a "solution". More tax equals more Govt and more wealth destroyed by the public sector... there's 30 countries in Europe that are living proof more tax equals more problems, not less
A solution is less tax (ie. less Govt). The solution is zero tax (ie. zero Govt).
Govt is the problem, not the solution. Govt should be shut down and buried. Fight all taxation and better still go completely black market (starve the fuking parasite)
Move to Somalia already.
I thought Obamacare was solving all of our budget problems and making everyone's life better and more affordable.
good point. that's how it was "sold" to us...
Fuck them. Glocks and personal guillotines for all!
they're doin' it for 'the kids'
I'm going back to home brew out of spite.
I have little doubt there will be higher taxes, but I think VAT and the burden associated with it will get an immense amount of pushback. I know that as a small business myself, I'm already dealing with too much paperwork, and the VAT pain v. reward isn't going to go over very well.
#3 on your list, and approaches like it, are far more workable. The government can raise taxes without touching the tax rate if they restrict deductions and/or expand the definition of income. (As my account often likes to point out, tax rates fit on one page of the tax code. It's the definitions of income/deductions that fill the remaining volumes.)
Approaching it from the elite's view, the challenge is gathering more taxes from everyone below them without them noticing, in other words implementing highly regressive taxes. While VAT fills the bill as a glorified sales tax, taxes on gas, alcohol, cell phones and the like are much easier to hide from the masses. Increasing the SS tax does this as well (it's in the paycheck, and for someone who makes > 1M impact is negligible.)
I think we can count on means testing for SS benefits too, illegal as that will be.
The one thing that truly terrifies me is if someone comes up with the idea of a federal property tax. That would feel the socialist's fantasies for multiple lifetimes, and truly guarantee slavery among the masses. Ironically, something akin to this is in the Obamacare law (3.8% on home sales profit above certain levels. The key here is the levels are NOT indexed, so like AMT this thing can creep up and capture tax from everyone years down the road.)
"the challenge is gathering more taxes from everyone below them without them noticing"
I thought inflation took care of that.
better stock up now......how long do 20 cases of Makers Marks last in a cool storage place ?
It's important to keep them in the dark too. If it's dark, cool, and unopenned - virtually forever.
I'm reminded of the Three Stooges episode where they make bath tub beer.
depends on how heavy a drinker you are!
"Impose a Price on Emissions of Greenhouse Gases = 1.8 Trillion"
Impose a Tax on Breathing = 14.5 Trillion
tax colorless gas that is natural from mammals. it is food for plants. Why, it helps corn destined for ethanol vs. tortillas to grow better.
- Ned
I'm going long frijoles.
And plastic tubing.
Bruce,
This is one I strongly disagree with you about the path forward but only because from where we are on March 10, 2011 we see widely divergent paths forward.
If your path is available, I agree there will be higher taxes which will adress some of the problems. Even then, I see the weight of government causing an implosion on that same path because there is no limit to how much money government requires once it has grown to its current size and scope. The VAT is a pernicious tax. Are you aware of some country that has not used to fund further growth of the government? (i.e. pay down debt and establish a continuing surplus)
The path forward I see (and I truly wish I did not) sees a forecoming global economic crash that will dwarf our Depression, result in starvation for tens of millions of people and be "resolved" through regional wars that will morph into a global war ( a billion plus people dead with the possibility of another two billion dying before any meaningful stabilization occurs). How do you see any or all of the recommendations of that report offsetting the economic collapse of an over-leveraged world?
[Pre-emptive response to readers in general and nutcases in particular: This is not based on any religious belief or preference for a particular political structure. Prophecies, political hyperbole and/or conspiracy theories will not be responded to since I believe a profound lack of response to those arguments is the best comment.]
barliman
I just can't understand how you could read this and conclude that BK is advocating something one way or the other. I'm not.
I'm quoting the CBO. Got a gripe with any of this? Blame them. Not me. I'm just a messenger.
My apologies, Bruce. My intent was not to gripe on the messenger. I misunderstood your point of view.
barliman
what would we save if we got rid of Homeland Security, the TSA, NSA and the CIA?
+1
+++
I want to rid our land of all those blood suckers. I have made it my mission to unplug completely. My family and I are preparing right now to move to farmland, get a well and solar, and carry on using nothing but trade in PMs. I REFUSE to be a slave.
Your souls.
add Dept of energy, dept of agriculture, and any other dept you chose as they are mostly unecessary.
taxing booze. another reason just to leave.
...or stock up!
...or make your own! Start now, the good stuff has to age.
Disclosure: Long oak barrels, rye and an out-of-the-way barn.
The only spending cut that I saw among all those tax increases was to cut the number of aircraft carriers. Tax increases actually increase the deficit in the long term. The politicans interpret them as permission to increase spending. Give them a dollar and they will spend two.
My suggestion for a spending cut: eliminate the CBO.
The trick is screwing over as few people as necessary to raise the revenue you want. Shared sacrifice doesn't get you reelected. Play the class warfare card or whatever. Nobody cares when someone else is getting cornholed. It could be all over anyway. Moral contagion has reached all levels of society. Anarchy bitchez.
Stop spending $$ on crap and keep your own money --- $1.0 Trillion in savings per year.
End the Fed and stop paying interest to squids and keep your own money --- $500 Billion per year.
Seeing beaurocrats, Bernanke, and Geithner in the unemployment line --- Priceless.
I'd rather lick satan's balls than deal with a VAT month in and month out.
"No taxation without representation" Sounds familiar but certainly doesn't ring true. Just who is being represented and who is being taxed?
the holders of the debt are also holders of our governments. we all need to become icelanders, if they would have us.
This is going to be real messy, for sure.
....bright side is THE VAT is only good for a decade...chuckle. Dark side is by year 10 it will be 25%.