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the top 10% pay a very high percentage of all Federal taxes so lets start there. If you raise taxes on those who pay them, these people will have less to spend and that means sales of consumer goods, restaurant sales and so on will decline.
So you think the top 10% will stop buying consumer goods, stop going out to restaurants, and so on (I guess that means they will stop spending their money to buy the things they want) and this will cause the economy to decline? They are only 10%! How about if we put money into the hands of the other 90% who will actually spend it on consumer goods, etc?
When the top tax bracket was at 90%, there was a VERY strong middle class. There was only one breadwinner in the average American family. Americans were pretty happy, unlike today.
Trickle-down economics has been proven to be an abject failure. Put more money in the hands of the wealthy and most of that money will go into creating more wealth, not more jobs. They invest overseas, they dump money into offshore banks, and worst of all, they have more money to pour into campaign coffers and twist the arms of our elected officials.
Politics was never the path to being a millionaire. It is today. All that money the wealthy realized from America going broke has led to wealthy politicians and the decimation of the middle class. Political corruption on a level this country hasn't seen in 100 years.
So for several years now we have talked about the 16, 18 and 20 trillion USD of debt that America has. We hear how we make cuts but yet despite cuts we see our debt increase year after year. There have been cuts but it's not enough to really make a dent. The biggest thing I see that our debt is a lot of talk of cutting taxes. In reality any tax cut leads to increasing debt. $2 of tax cuts for every $1 of budget cuts is still $1 of debt increased. I ask why can't we raise taxes if the national debt is such a problem for America?
If taxes were raised, Congress would just spend the increase. If the economy would improve, then more folks would be working and paying taxes and, theoretically, not taking a transfer payment. That's why tax revenue rises in a good economy. Raising taxes stifles the economy because money the government takes out is not used to invest in the economy.
The simplest answer is that payment of the debt isn't a current problem to the government, right now that is. Interest rates are very low and the Feds have refinanced the outstanding debt at the lower rates. If interest rates on the debt rise, which will happen at some point when the Fed Reserve stops artificially keeping them down, then interest payments will rise. That's not a problem to the government, though, they'll simply print more money to pay that interest and we'll all pay the price through inflation. The increased use of inflation protected federal debt could cause a faster rise, with uncertain consequences.
When that debt matures, that's no problem because the Feds will just refi or print even more money to repay the debt. Again, guess who pays the ultimate bill?
Also, can we put away the erroneous argument that debt holders can somehow call the debt and demand something else in payment. Federal debt is not callable. The government's only debt obligations are to pay interest when due and repay the funds at maturity. There is a risk that debt holders would be unhappy with the inflation caused by excessive printing of U.S. dollars and dump their existing debt on the market at greatly reduced value. That would seriously affect the ability to issue affordable debt in the future and harm all other debt holders. Without debt, our entire economy would grind to a halt and make the last few years look like the good old days. That is a possibility when the numbers get seriously huge, and Congress keeps kicking that can down that road.
When people have money to spend they spend it. Spending money give the gov't more taxes, when people buy jobs are created, malls are built, more cars are driven, more gas is purchased, people buy houses, they move into nicer neighborhoods, more houses have to be built for them which is now new jobs, it just keeps going and going. Stave people of paychecks and look at any town that USED to be a thriving place! Google up some pics of 3rd world Detroit.
Um, the federal government don't get sake taxes and property taxes for revenue sources. Those go to the state and local (city, town, county, etc.) not the IRS.
So for several years now we have talked about the 16, 18 and 20 trillion USD of debt that America has. We hear how we make cuts but yet despite cuts we see our debt increase year after year. There have been cuts but it's not enough to really make a dent. The biggest thing I see that our debt is a lot of talk of cutting taxes. In reality any tax cut leads to increasing debt. $2 of tax cuts for every $1 of budget cuts is still $1 of debt increased. I ask why can't we raise taxes if the national debt is such a problem for America?
If you're actually interested in this stuff, I suggest you read a macroeconomics book.
I don't have time to explain it all, but basically their is NO correlation with tax rates and how much we take in from them. It's not as simple as you think.
If the National Debt is Such A Problem, Why Isn't Raising Taxes on EVERYONE An Answer
Because:
The poor have no money that can be taxed. You cannot raise taxes on them.
The lower middle class has some money, but realistically they are also untaxable because they can barely afford to live as it is.
The upper middle class is traditionally the workhorse of taxpayers. They make more than enough to get buy, but not enough to really take advantage of the major loopholes and financial hidey-holes. Raising taxes on them is ridiculous because, as a general percentage of income, they already pay more taxes than any other group.
The rich/wealthy squeal the loudest (at least their talk-show spokesmen do) when the issue of raising taxes comes up. They make far more than anyone, but employ lawyers and accountants to find loopholes and such. Also their income is typically in the form of capital gains, dividends, and interest, which are taxed at substantially lower rates than general wage income. Remember the famous case where Mitt Romney earned $22mil, but it was discovered that he paid taxes at a lower rate than his secretary? And why do you think Trump is refusing to release his tax returns? The super-rich also employ lobbyists and can make substantial donations for campaign funds, so there's no way the taxes on the rich will substantially go up.
So there you go. Logically, taxes can't go up for anyone.
In the real world, however, the tax structure pendulum needs to swing back closer to where it was in the middle of the 20th century. Not all the way back (a 90%+ top tier tax rate is kinda ridiculous), but much closer than it is right now. There's a serious disconnect when multi-millionaires pay taxes at lower rates than middle-class wage earners.
In the overall scheme of life, this is true. You can't take anything with you when you die. On the other hand, when you are hungry you kinda need money to buy food. Or to pay for heat in the winter. etc. And since we're talking about taxes, the gub'mint needs money to pay for things like roads, schools, and aircraft carriers.
Thank you for point #3. My head just about explodes every time I hear a politician say I am not paying my fair share. Our income group is by far paying the most and not one politician gives a rats you know what about us. Just keep paying more more more!!
When people have money to spend they spend it. Spending money give the gov't more taxes, when people buy jobs are created, malls are built, more cars are driven, more gas is purchased, people buy houses, they move into nicer neighborhoods, more houses have to be built for them which is now new jobs, it just keeps going and going. Stave people of paychecks and look at any town that USED to be a thriving place! Google up some pics of 3rd world Detroit.
This is a nice theory. Somehow though, like Marxism, it never seems to work in reality. The last time it was tried under GW Bush it did end well. Why do you think we should try this again?
How about raising taxes on imports. This could force some manufactures to return jobs to the U.S. creating tax paying employees instead of welfare recipients?
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Why doesn't everyone just work really hard and pay it all off. Then close most of the government and make them manage on like a national 10% sales tax.
Oh but the garbage collectors can't get a six figure pension, and criminal elected officials won't make $300,000+ a year while the rest get by on $15,000.
If not for the complete lack of control by those in govt we would not be in this mess. In my area alone, injust ONE YEAR, the city wanted a 2% tax increase, the fire dept wanted a property tax increase, they got it, the college git 1/2%, the COUNTY got a 1/2% I think, and the State tried! Like 5% in one year. EVERY year.
There is no money left. There needs to be a total reset. 3/4 of the govt is unnecessary. Do we need 11 or 12 carrier battle groups? The Russians have ONE old carrier that barely floats. The chinese have two. And yet we squander trillions. Stop the waste and there is no need to tax.
Why doesn't everyone just work really hard and pay it all off. Then close most of the government and make them manage on like a national 10% sales tax.
Oh but the garbage collectors can't get a six figure pension, and criminal elected officials won't make $300,000+ a year while the rest get by on $15,000.
If not for the complete lack of control by those in govt we would not be in this mess. In my area alone, injust ONE YEAR, the city wanted a 2% tax increase, the fire dept wanted a property tax increase, they got it, the college git 1/2%, the COUNTY got a 1/2% I think, and the State tried! Like 5% in one year. EVERY year.
There is no money left. There needs to be a total reset. 3/4 of the govt is unnecessary. Do we need 11 or 12 carrier battle groups? The Russians have ONE old carrier that barely floats. The chinese have two. And yet we squander trillions. Stop the waste and there is no need to tax.
A regressive tax, pass. It's too damn regressive. Those rest of us getting by at $15K will bare the shoulders of the tax burden while those criminal elected officials making 300K wont and the 1%ers wont. The $15K earners may truly pay 10% while others won't. The 300K earners might only spend 25% or 75K a year meaning that they pay only 2.5% in taxes and the 1%ers may pay even less. How is that "fair"?
Your problem seems to be with state, county and city/town/village government. They raise taxes far more often than the US does. The fire department needs it for better response. Who wants old technology to fight fires and save lives? The colleges need to advance and being state schools, you either pay the tuition in taxes or when you or your dependents go onto college (even both.)
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Mkpunk, you are probably right about the flat sales tax. But rich people live beyond their means too. What's the tax on a 40 million dollar Gulfstream or 200 million dollar mega yacht? Well, yeah ok, probably zero with a little creative paperwork. Our measly little $250k 50' sailboat IIRC was tax free because we took possession in Oregon and took it to Mexico for six months.
And yes, our local taxing entities are a problem. That is why there should only be one tax entity, the rest can fight for the pie. But now they just come to us for another slice.
And I'm getting OT but there should not be a property tax. Otherwise we are not land owning freemen, but mearly renting from the govt.
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They are only 10%! How about if we put money into the hands of the other 90% who will actually spend it on consumer goods, etc?
