Joe Taxpayer gets soaked again
The Pentagon is in the early stages of drafting a wartime request for up to $100 billion more for Iraq and Afghanistan, lawmakers say, a figure that would push spending related to the wars toward a staggering half-trillion dollars.
Make no mistake, the vast majority of this money is going into the money pit also known as Iraq.
Yeah, but it’s not included in the Budget. So, it’s OK
I’ve used the Bush plan for doing my budget too. I have $5,000 to spend this month, and my budget has $4,000 in obligations.
But I saw this really neat car I want that is $60,000, so I’m just not going to include it in my budget. According to the Republican Congress, it is not going to be part of my debt load, right?
Fact:
After Bush signs the Jobs and Growth act (Read: Tax Cuts) in 2003, federal receipts reach their highest level in history, 2.15 Trillion dollarsin 2005 FY.
So are you worried about how much money the country is taking in, or the fact that a tax cut is so popular and therefore hard for the leftists to fight in upcoming elections?
Inquiring minds want to know…..
Fact, there is a job waiting for you in the WH procurement office. Note that David Safavian, the man with “some big ideas” in 2004 left mighty big shoes to fill in 2005.
http://www.washingtontechnology.com/news/19_18/datastream/25095-1.html
$100 billion is a drop in the bucket and not much to bitch about at this point -
“The last quarter century has been governed mainly by Republican Presidents, and increasingly by Republican legislatures, and annual domestic spending doubled during the period, from about $900 billion to about $1.8 trillion (in 2000 dollars). Today the federal government s fiscal imbalance the excess of projected future expenditures over projected future revenues is close to $70 trillion. About $20 trillion of this enormous sum was tacked on just in 2003, with the addition of a massive, unfunded Medicare entitlement to prescription drug benefits.”
http://www.theamericanenterprise.org/issues/articleID.18895/article_detail.asp
drpedro:
I think you’re missing the point. The White House and Congress aren’t considering this part of the budget at all. So, while tax receipts are up, spending goes way up, too, increasing deficit spending even more.
Remember the good old days of fiscal responsibility where we would run a surplus and use that to pay down our debt? Ahh, to be run by a Democrat administration again.
According to the approved message, tax cuts mean we get to keep more of our own money, and the government gets to take in more money, too!
Wow! Who could say no to free money?
Oh, and I always thought that conservatives didn’t like a large tax receipt figure because it gives the government more money to spend.
Well, congratulations to you, sam.
Now can we go back to drpedro’s fascinating arithmetic? He claims that raising taxes is responsible for increasing government revenues (that’s the “government gets to take in more money” part.) But at the same time, reducing tax rates means individual taxpayers get to keep more of their own money (the “keep our own money part.”)
Do you see the paradox? Taxpayers get more. The government gets more. Everybody gets more! Hooray! It’s free money!
drpedro assumes (accurately, at least over the long haul) that taxation isn’t a zero-sum operation. However, he makes that assumption without qualification: tax cuts mean more for everybody! Always!
If that’s true, we should cut the tax rate to zero and have infinite revenues.
It’s money from The Fourth Dimension! Republican scientists have created at temporal vortex through which they can extract money from The Future! Truly we live in a space age economy.
FWIW, the IRS recently released stats on just who “Joe Taxpayer” is. Do a little googling and find them. You may be surprised to learn , when broken the numbers are broken down, just who pays what, and who is paying more now even after the tax cuts. Unless of course we can’t trust the IRS’s numbers because Bush is a liar.
And pionar, perhaps you are actually missing having a Democratic pres with a Repub congress, or even vice versa for that matter. Give these jokers in Washington complete power of the purse, and they will spend money in an effort to buy the votes needed to stay in power, regardless of which party they belong to.
Quaker says:
“According to the approved message, tax cuts mean we get to keep more of our own money, and the government gets to take in more money, too!”
I’m a small-business owner who pays taxes at the individual rate. Higher taxes lead me to make capital expenditure and hiring and wage increase decisions much more judiciously. Lower taxes allows me the extra capital to spend on my business and current employees, or the ones I will consider hiring. You know….the ones that will then be paying taxes as a result of being hired.
Raise my taxes and I will adjust accordingly. Lower them, and the people around me do better as a result. I doubt I’m the only small-business owner who operates this way.
But then of course, I live in the real world.
Quaker and Ryland, it’s called the Laffer Curve. Those of us who passed Econ 101 already know it.
I’m going to try out the Laffer curve with my boss. I’ll offer a 50% pay cut for next year. Because of this selfless action, my boss will make so much more money that I will ACTUALLY MAKE MORE!!!!!!!!!!!!! Why didn’t I think of it sooner?
What institution granted you your doctorate drpedro? It must not have been very good because you haven’t figured out the difference between correlation and causation.
But see Quaker, that’s where the government haters like Grover Norquist “starve the government so that it is small enough to drown in a bathtub” logic fails- if they really believed what they were saying, what they would do is raise taxes to about 90% so that the government wouldn’t raise ANY money, and then they could drown it like they say.
So the end game evidentally is this- cut taxes without cutting services- then, when the government is nearly bankrupt, raise taxes so high that the government loses all of its revenue: And then the government will drown.
See?
Quaker and Ryland, it s called the Laffer Curve. Those of us who passed Econ 101 already know it.
Oooh, SaveFarris is a college boy. Lookit you with yer fancy book-learnin’.
I know what the Laffer Curve is, but even if tax cuts result in overall increased tax revenue, the government is still spending more than it’s taking in. When that happens, those of us who passed Econ 101 refer to it as deficit spending, which is what my little attempt at humor was referring to.
There’s a very amusing allusion to Good Will Hunting going through my head, watching this conversation about the Laffer Curve.
Something about apples.
Farris:
Then you must also know that the Laffer curve illustrates that setting the tax rate to high, or too low, results in lower government revenues. The curve suggests there’s one magical point at which revenue is maximized. Any deviation from that point lowers revenue.
drpedro’s boast ignores this inconvenient fact.
I think the logic is supposed to be: we had taxes that were way too high, such that we were way over on the high-tax/low-revenue side of the Laffer curve, so reducing taxes raised collections and brought us closer to the “sweet spot”… which still doesn’t explain why there was a budget surplus when Bush took office, but [Jedi hand wave] the surplus was created by Republicans, not by Clinton.
Actually I have an MD, so you are all correct to question my economic wisdom…
However, as Quaker points out, this is not a zero sum game. Improving efficiencies also increases production and output, which increases profits and yes, everyone wins. This happened during the Reagan years as well.
I don’t ignore the fact that setting taxes too low is also a problem, I just note that we are not there yet, as evidenced by the fact that tax receipts are the highest in history.
Correlation and causation are very familiar to me. Go back and look at tax receipts after the marginal tax rate was lowered at any point in the last fifty years and you will get the point. Correlation does not prove causation, but when you get 100% concordance between an action and an effect, you have a pretty good indication I would submit.
This happened during the Reagan years as well.
Pure revisionism.
Reagan did cut taxes…initially. Deficits exploded and Reagan was forced to enact the highest tax hikes in US history.
Clinton raised taxes…revenues went up!
Either we’re simultaneously on both sides of the Laffer curve, or else it’s a too simplistic model of the real world.
Ryland,
nice of you to notice revenue and spending are two entirely different subjects. Now if you can just tell Oliver….
No Quaker, it is just that if one action is perceived as bad (raising taxes) and one good, both leading to the same result, why not avoid the bad action?
Deficits didn’t explode…they went up and during that time (without the benefit of an artificially inflated stock market, a la Clinton) we had the longest period of non-wartime growth in the history of this country. And what taxes did Reagan enact?
I’m still speaking in the context of the Laffer curve, which Farris introduced into the discussion. From that perspective, the only “good” action is finding the tax rate that optimizes government revenue.
As for your question, the two actions don’t lead to the same result. The Clinton tax increase allowed the government to pay its bills out of current revenues. The Bush tax cuts require borrowing from future taxpayers to pay for current expenditures.
Oops. And your other question:
Here’s a good summary.
Wuzzuh?
Quaker, tax increases/decreases DO NOT EQUAL spending increases/decreases. Does the price of milk change if you get paid for 40 hours one week and 32 the next?
Quaker – I believe what he was attempting to point out is the fact that you made the assertion that Bush’s tax cuts require borrowing in the future, as though the tax cuts, which have led to increased revenues, are responsible for future borrowing or defecits. Essentially, you are ignoring spending and its role, and blaming this all on tax cuts.
You will get no arguments from me that the Republicans have been horrific with spending, but that it another thread altogether.
Thanks for the translation and Am not! Am not! Am not!
I’m blaming this on the difference between money in and money out.
I believe it was drpedro who only wanted to look at half of the equation when he wrote:
He was looking only at the upward direction of revenues. (Of course, we haven’t even begun to debate what the current level of tax revenue would be without the tax cuts. Another topic for another day.)
Jun 02 Halliburton stock was $9.00 a share. Yesterday it was $66.00 a share.
That depends.
In how many previous years did we “experience the highest tax revenues in our history”?
Were all of those earlier record highs preceded by tax cuts? If not, what were the causes of the record highs and how do we know those forces aren’t causing the current record high?
If you don’t know the answer, then you’re just playing “X happened before Y, therefore X caused Y” without understanding how X and Y are related.
Quaker – Then let us look at the money in side of the equation. We are currently experiencing some of, if not the highest tax revenues in our history. Kind of blows that talking point to bits, huh ?
You know, that “highest tax revenues in our history” business made me curious, so I went a looked it up.
In the years after 1950, there have been only nine years when we didn’t have “the highest tax revenues in our history.” (Four of those happened under the current administration.) That’s 46 of the last 55 years.
Something tells me there’s a little more at work here than George Bush’s tax cuts.