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Not on a federal level. There is no Constitutional mandate for it. The federal government overstepped its bounds, and ended up screwing the country's citizens. Anyone really surprised by that outcome?
There are Constitutional limits to the federal government's authority and power for a reason.
So your argument is that Social Security and Medicare are not just bad ideas, they are unconstitutional, huh?
As for "screwing the country," these programs have done an amazing amount of good as seen by their popularity.
You (or someone with your viewpoint) said that medical cost increases are due to "the blank check" that Medicare gives. First, it isn't a blank check. There are approved procedures and a schedule of acceptable cost. Second, in most of other advanced countries, the government is the single-payer insurance company. In those countries, health care costs are roughly half of ours; doesn't rise at the same rate and provide similar or better care for the entire population of patients. One must ask, if the government is the problem, why isn't their government the problem too?
We had the same tax rate in 2007 when we hit $2.5T in revenue. As I have shown you in several posts and even given step by step walk through of the stats, it is INCOME that dropped, especially on the high income cohorts.
A good question would be, then, why would incomes drop so drastically in the 2000s compared to the years past? Besides that, 2006 and 2007 were the only years when the tax revenue exceeded than that collected in 2000. Yet, the economy was supposedly much larger. Now compare the tax revenue as a percentage of GDP, over sixteen years (Clinton tax rates followed by Bush tax rates):
1993: 17.5
1994: 18.0
1995: 18.4
1996: 18.8
1997: 19.2
1998: 19.9
1999: 19.8
2000: 20.6
2001: 19.5
2002: 17.6
2003: 16.2
2004: 16.1
2005: 17.3
2006: 18.2
2007: 18.5
2008: 17.5
If you want to focus on income tax, let us look at total AGI (in 2005 dollars), total number of tax returns filed in parenthesis:
1993: $5.11T (113.7 million)
2000: $7.28T (128.2 million)
2007: $8.29T (141.0 million)
Now let us look at total AGI (also in 2005 dollars) with total number of such tax returns filed in parenthesis:
1993: $1.42T (5.7 million)
2000: $2.57T (6.4 million)
2007: $3.11T (7.0 million)
The AGI for the top 5% actually more than doubled (2.19 times to be exact) while number of tax returns grew by only 1.23 times. So, what about the income tax? Let us look at ith for this group:
1993: $321.7 Billion
2000: $628.3 Billion
2007: $636.7 Billion
Math is not the problem is the idealogy that is the problem that we can be in 130 countries, have 3 or 4 wars and have entitlements. EVEN IF EVERYONE WAS TAXED MORE WE CAN NOT SUPPORT THE KIND OF SPENDING GOVERNMENT IS PROMOTING and SINKING US DEEPER INTO!!!
So your argument is that Social Security and Medicare are not just bad ideas, they are unconstitutional, huh?
Yes. There is no Constitutional mandate for federal spending on social programs.
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As for "screwing the country," these programs have done an amazing amount of good as seen by their popularity.
They're "popular" because people have been FORCED to pay additional taxes into the programs. The "popularity" hinges on the fact that people expect to get what they have PAID for.
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You (or someone with your viewpoint) said that medical cost increases are due to "the blank check" that Medicare gives. First, it isn't a blank check. There are approved procedures and a schedule of acceptable cost.
How many enrolled Medicare seniors are left without medical care? What? None? Therein lies the blank check. The government pays for medical care regardless of whether or not that care is an unfunded liability. There's the bottomless pocket.
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Second, in most of other advanced countries, the government is the single-payer insurance company. In those countries, health care costs are roughly half of ours; doesn't rise at the same rate and provide similar or better care for the entire population of patients. One must ask, if the government is the problem, why isn't their government the problem too?
Actually, their single-payer attempts at health care ARE the problem:
A good question would be, then, why would incomes drop so drastically in the 2000s compared to the years past? Besides that, 2006 and 2007 were the only years when the tax revenue exceeded than that collected in 2000. Yet, the economy was supposedly much larger. Now compare the tax revenue as a percentage of GDP, over sixteen years (Clinton tax rates followed by Bush tax rates):
1993: 17.5
1994: 18.0
1995: 18.4
1996: 18.8
1997: 19.2
1998: 19.9
1999: 19.8
2000: 20.6
2001: 19.5
2002: 17.6
2003: 16.2
2004: 16.1
2005: 17.3
2006: 18.2
2007: 18.5
2008: 17.5
If you want to focus on income tax, let us look at total AGI (in 2005 dollars), total number of tax returns filed in parenthesis:
1993: $5.11T (113.7 million)
2000: $7.28T (128.2 million)
2007: $8.29T (141.0 million)
Now let us look at total AGI (also in 2005 dollars) with total number of such tax returns filed in parenthesis:
1993: $1.42T (5.7 million)
2000: $2.57T (6.4 million)
2007: $3.11T (7.0 million)
The AGI for the top 5% actually more than doubled (2.19 times to be exact) while number of tax returns grew by only 1.23 times. So, what about the income tax? Let us look at ith for this group:
1993: $321.7 Billion
2000: $628.3 Billion
2007: $636.7 Billion
Almost no increase in tax revenue. Why?
The majority of the income drop in the early 2000's was due to a massive drop off in stock option related income. Here is a paper regarding this phenomenon in California, extrapolate this our over the nation and you see why revenue dropped. Revenue Volatility in California
The same thing happened from 2007 -2010 but it was more real estate related. All you need to do is look at the revenue of those making over $200,000 to see wild fluctuations in income.
We would also need to look at what type of income was earned, was it lower taxed dividends and gains as opposed to highly taxed stock options etc. Did fewer people sell assets with gains in 04 as opposed to 07, etc?
Had we stayed under the 2000 tax rates would revenue have been higher? Of course but not by much, maybe $1-2 hundred billion or so in 05-07, hardly anything to write home about. Of course this is assuming that no one made any business or lifestyle modifications.
My point is that we are looking for the majority of our revenue from a very small pool of individuals, some are the "chronic wealthy" that receive high incomes year after year but many of transient rich, those who make a high income for a year or two. Trying to budget in this type of scenario is not easy to do, as Gov. Gray Davis realized.
You may want to add in the 01-05 figures to see the fluctuation I am talking about. Plus another point is why include those one time "rich" in with the chronic rich, all you do is take away future retirement income generating assets.
We are trying to tinker at the margins without really getting to the systemic problems or corporate control, inefficient and improper revenue generation, a debt based monetary system and out of control crony driven spending.
The majority of the income drop in the early 2000's was due to a massive drop off in stock option related income. Here is a paper regarding this phenomenon in California, extrapolate this our over the nation and you see why revenue dropped. Revenue Volatility in California
The same thing happened from 2007 -2010 but it was more real estate related. All you need to do is look at the revenue of those making over $200,000 to see wild fluctuations in income.
If you look at the numbers I've provided, incomes went up. Tax revenue went down (or minimally up in 2007). And those were federal income tax numbers.
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Had we stayed under the 2000 tax rates would revenue have been higher? Of course but not by much, maybe $1-2 hundred billion or so in 05-07, hardly anything to write home about. Of course this is assuming that no one made any business or lifestyle modifications.
There was a 30% increase in individual income tax revenue going from 1993 to 2000. Why do you assume the increase would have been better only by a fraction of that percentage?
If you look at the numbers I've provided, incomes went up. Tax revenue went down (or minimally up in 2007). And those were federal income tax numbers.
There was a 30% increase in individual income tax revenue going from 1993 to 2000. Why do you assume the increase would have been better only by a fraction of that percentage?
You did not provide the numbers showing income and revenue dropping by about 26% between 2000-2002 and even more between 2007-2010. High end income is subject more to the boom and bust cycles, raising taxes would not have changed that. It may have just rearranged the timing.
The 93-00 increase was due to the Internet bubble, massive amounts of money were made over a very short period of time. Plus baby boomer's hit their peak earning years causing consumption and income to increase dramatically during a technological revolution.
I was talking about the Bush years, had rates been higher revenue MAY have only been up marginally.
You did not provide the numbers showing income and revenue dropping by about 26% between 2000-2002 and even more between 2007-2010. High end income is subject more to the boom and bust cycles, raising taxes would not have changed that. It may have just rearranged the timing.
I did not consider 2000-2002 because you were comparing 2000 and 2007. I threw in 1993, and provided a perspective of tax revenue as a percentage of GDP over sixteen years, including 2000-2002. What difference would it make if I included 2009 and 2010? Or any other set of intermediate years, for that matter?
Had there been no messing around with tax rates in 2001, there would have been no tax increase you would be speaking about, only being pragmatic about handling the economy and keeping it on track, trying to pay off the debt if it were possible, instead of "let me put your money back into your pocket" agenda advertised by politicians.
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The 93-00 increase was due to the Internet bubble, massive amounts of money were made over a very short period of time...
Quite a "bubble" to last that long, no? Besides, was 2006-2007 (the two years you used for argument), in any shape or form, a part of another bubble? Is it that we can't differentiate between booming economy and short term bubbles anymore?
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Plus baby boomer's hit their peak earning years causing consumption and income to increase dramatically during a technological revolution.
And came to a grinding halt in 2001 and since?
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I was talking about the Bush years, had rates been higher revenue MAY have only been up marginally.
What makes the decade since 2001 so special? Do we have evidence of this happening in the past as well?
After your well reasoned and researched post, not one response from posters denying your facts. The only response they have are conclusions that they keep repeating. This is because these are the only programmed responses that they have. They have never been shown the facts before and they have to fall back on right wing talking points, like "it is not tax problem it is spending problem." blah, blah. How about they start disputing the numbers...can't do it.
I don't need to dispute revenue numbers.
We have a HUGE spending problem regardless of the revenue numbers.
Federal spending should be less than one trillion per year.
We have a HUGE spending problem regardless of the revenue numbers.
Federal spending should be less than one trillion per year.
We have a huge budget problem. Massive spending reductions will send the economy into the tank...even small reductions at this point will hurt the economy. There really is no choice but to have very small reductions over time and more increase in taxes for the wealthy. I say no choice if you want to keep the economy moving.
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