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RonPaulCult
11-11-2010, 05:55 PM
NOTE: I don't actually believe in all of the arguments I'm about to make in this thread. I'm just asking some questions. I appreciate the great minds on this board - I learn from you all.

I'm thinking about the "Bush" tax cuts that are about to expire. As a libertarian, I believe that taxation is theft. I naturally do not wish to raise taxes on anybody at any time.

With that said - something bothered me very much about the Bush tax cuts. He, along with congress, didn't find a way to pay for them first.

So when people like Rand get on tv and say that anybody who wants these tax cuts to expire must want a depression - is he correct in what he is saying?

Our government has screwed up so badly, we're probably headed for a depression no matter what. Nevertheless, which will more likely tip us in that direction? Taxing the rich a little bit more - or borrowing money, with interest, from China to pay for our massive government?

I know I know I know what you are all going to say. We need to keep the tax rates the SAME (or lower them) and cut spending.

But that's not going to happen and we all know it. Read the other thread today about the tax cuts they are proposing. The budget will be balanced in what - 30 or 50 years under that plan and people are FREAKING OUT about those cuts.

Congress just does not have the will to cut that much out of the budget. Let's be realistic - it won't happen.

So since it will not happen - which is the better move? Having 700 billion more coming in to congress to pay for these massive, wasteful, stupid big-government programs - or keeping all of those aforementioned programs anyway and borrowing money to pay for them?

It seems to me the choice is clear - it's better to tax.

If we force a balanced budget amendment and end the fed's ability to print the money to "pay" for our big government then our society will only be faced with two choices:

1) High taxes
OR
2) Fewer government programs

Then we could TRULY decide what kind of society/government we would like to have.

But until that glorious day - shouldn't we hope for higher taxes so long as the programs exist (while at the same time despising them)?

low preference guy
11-11-2010, 05:57 PM
as long as the government does anything beyond protecting life and property, taxes should be cut.

the government should raise taxes only to cover three things: running the military, the courts, and the police. so yes, if there isn't money to run those three things properly, and the government isn't spending money on anything else, you can consider raising taxes.

RonPaulCult
11-11-2010, 05:58 PM
One more benefit to higher taxes - the more people are taxed - the more they will be against the expensive wars, the expensive social programs, etc.

The more they are against those things - the more they will fight to cut those programs down, which is what we need the most. We will borrow less money from our bankers and we will get the people pissed off. Sounds like a win/win for our movement.

RonPaulCult
11-11-2010, 06:00 PM
as long as the government does anything beyond protecting life and property, taxes should be cut.

the government should raise taxes only to cover three things: running the military, the courts, and the police. so yes, if there isn't money to run those three things properly, and the government isn't spending money on anything else, you can consider raising taxes.

And you know I agree with you and have the same philosophy. But you aren't really addressing the concerns of my post. As long as the government is forcing expensive programs on us - isn't it our responsibility to PAY for them?

Jordan
11-11-2010, 06:02 PM
I'm cool with something they had in Britain where for each cut they had a modest increase in taxes; I think it was $3 cut = $1 increase in taxes. I'd prefer 5:1, though.

low preference guy
11-11-2010, 06:04 PM
And you know I agree with you and have the same philosophy. But you aren't really addressing the concerns of my post. As long as the government is forcing expensive programs on us - isn't it our responsibility to PAY for them?

no. of course not.

RonPaulCult
11-11-2010, 06:08 PM
no. of course not.

Ok - maybe I worded that foolishly. Aren't we going to be FORCED to pay for them eventually? And won't they be more expensive for us down the road, either through inflation or through even HIGHER taxes to pay for the interest payments?

Aren't we kicking the can down the road and shooting ourselves in the foot?

Don't we have a responsibility to save ourselves from this?

low preference guy
11-11-2010, 06:10 PM
Ok - maybe I worded that foolishly. Aren't we going to be FORCED to pay for them eventually? And won't they be more expensive for us down the road, either through inflation or through even HIGHER taxes to pay for the interest payments?

Aren't we kicking the can down the road and shooting ourselves in the foot.

Don't we have a responsibility to save ourselves from this?

maybe we can prevent them from forcing us. we need to put more people who think like us, like peter schiff.

i think default is better than making interest payments. 1. you shouldn't take money from people who didn't agree to go into debt. 2. if the U.S. defaults, no one will ever loan money to the U.S. again, which will make it harder for the government to grow.

Jordan
11-11-2010, 06:12 PM
maybe we can prevent them from forcing us. we need to put more people who thinks like us, like peter schiff.

The odds of Peter Schiff going to DC are equal to the chance we'll see a balanced budget.

low preference guy
11-11-2010, 06:14 PM
The odds of Peter Schiff going to DC are equal to the chance we'll see a balanced budget.

it's just an example. it could be someone else. Rand got elected.

Ekrub
11-11-2010, 06:27 PM
Unfortunately, I agree with you to an extent. We need to figure this problem out and not simply pass it on to our kids. (as has been done to us)

I think we have two options:

1)combination of serious cuts, taxes, and major reform

OR

2)default, dollar crash, rebuild the US

awake
11-11-2010, 06:28 PM
End the Fed and you stop the secret weapon in the governments arsenal to stealth tax with out direct blame.

Taking money from people trying to save and repair the economy is a bad move. Rand is correct. Real savings are critical to a recovery... not printed dollars.

Yes, higher taxes equal more pain, but a lot of people misdirect that anger by calling to government to do something, which perpetuates the interventionist death spiral.

This death spiral is toward the idea of full socialism as necessity to try and keep the whole racket from collapsing. Inflation is the favorite taxing mechanism because it disconnects the cause and effects. People can not see the robber properly and the robber can better point fingers at other scape goats hiding his actions.

Direct taxation is tweaked here and there to never arouse much outrage, inflation is the primary taxing vehicle in times of crisis and war. That way people don't see it or feel it in direct and obvious ways.

Although I agree in principle on the pain tax, if the Fed is not ended, they are crafty enough to do it in under a smoky cover of currency debasement.

Zippyjuan
11-11-2010, 06:32 PM
If you really, really want to balance the budget and eventually get rid of the debt, it is not higher taxes OR spending cuts but higher taxes AND spending cuts.

As I point out in another thread on the topic, just look at these numbers from the estimated 2010 budget. Item #1- the US deficit (how much they had to borrow this year) is more the money they collected in income taxes. #2. You can cut 100% of every department and still have a deficit (though most of it will be gone).

http://en.wikipedia.org/wiki/2010_United_States_federal_budget

Estimated receipts for fiscal year 2010 are $2.381 trillion, an estimated decrease of 11% from 2009.

$1.061 trillion – Individual income taxes
$940 billion – Social Security and other payroll tax
$222 billion – Corporation income taxes
$77 billion – Excise taxes
$23 billion – Customs duties
$20 billion – Estate and gift taxes
$22 billion – Deposits of earnings
$16 billion – Other



Mandatory spending: $2.184 trillion (+15.6%)
$677.95 billion (+4.9%) – Social Security
$571 billion (−15.2%) – Other mandatory programs
$453 billion (+6.6%) – Medicare
$290 billion (+12.0%) – Medicaid
$164 billion (+18.0%) – Interest on National Debt
$11 billion (+275%) – Potential disaster costs
$0 billion (−100%) – Troubled Asset Relief Program (TARP)
$0 billion (−100%) – Financial stabilization efforts


Notice that this "mandatory spending" does not include anything else- not the Department of Defense, not the Treasury, or any other department. And it is still all the estimated revenues for 2010.

RonPaulCult
11-11-2010, 06:58 PM
Unfortunately, I agree with you to an extent. We need to figure this problem out and not simply pass it on to our kids. (as has been done to us)

I think we have two options:

1)combination of serious cuts, taxes, and major reform

OR

2)default, dollar crash, rebuild the US

Even though the Fed will step in and keep the "party" going, I'm starting to think that Rand should not only vote NO on raising the debt ceiling, he should unleash the MSNBC nightmare and filibuster the vote.

awake
11-11-2010, 07:03 PM
Even though the Fed will step in and keep the "party" going, I'm starting to think that Rand should not only vote NO on raising the debt ceiling, he should unleash the MSNBC nightmare and filibuster the vote.

Like a man with a pin in a balloon factory...

free1
11-11-2010, 07:35 PM
We need to figure out how much of the money was printed from thin air. It's basically our own money. Then you can calculate the debt properly and lower taxes accordingly.

Oh, did I mention ending the fed?

I don't know why people are acting like the debt is real and basing all their calculations on it when they have a prime example of printing from thin air (the recent 600 BILLION printing press run).

And China probably prints from thin air too, so you have to factor that in.

freshjiva
11-11-2010, 08:08 PM
With that said - something bothered me very much about the Bush tax cuts. He, along with congress, didn't find a way to pay for them first.

This is one thing that bothers me about Liberty scholars and spokespeople, including Peter Schiff and Ron Paul.

Although Art Laffer got it totally wrong about the banking and credit crisis, he's still spot-on about his Laffer Curve theory of tax rates.

Tax rates and tax revenues share an inverse relationship, up to a certain inflection point.

Cut taxes during economic contraction, and you actually increase government tax revenue.

The Bush tax cuts, in reality, never decreased government revenues.

Like Rand Paul has said, we don't have a revenue problem. We have a spending problem.

More people in the Liberty movement needs to better understand the Laffer Curve and why its not only theoretically true, but has been demonstrated to be true.


http://3.bp.blogspot.com/_6xKnC2gQqCk/TJji--D5SQI/AAAAAAAAAK8/dlo6TSWq5Xo/s1600/laffer-curve1.jpg.gif

oyarde
11-11-2010, 08:11 PM
This is one thing that bothers me about Liberty scholars and spokespeople, including Peter Schiff and Ron Paul.

Although Art Laffer got it totally wrong about the banking and credit crisis, he's still spot-on about his Laffer Curve theory of tax rates.

Tax rates and tax revenues share an inverse relationship, up to a certain inflection point.

Cut taxes during economic contraction, and you actually increase government tax revenue.

The Bush tax cuts, in reality, never decreased government revenues.

Like Rand Paul has said, we don't have a revenue problem. We have a spending problem.

More people in the Liberty movement needs to better understand the Laffer Curve and why its not only theoretically true, but has been demonstrated to be true.


http://3.bp.blogspot.com/_6xKnC2gQqCk/TJji--D5SQI/AAAAAAAAAK8/dlo6TSWq5Xo/s1600/laffer-curve1.jpg.gif

Yes , it stands the test of time .

awake
11-11-2010, 08:59 PM
This is one thing that bothers me about Liberty scholars and spokespeople, including Peter Schiff and Ron Paul.

Although Art Laffer got it totally wrong about the banking and credit crisis, he's still spot-on about his Laffer Curve theory of tax rates.

Tax rates and tax revenues share an inverse relationship, up to a certain inflection point.

Cut taxes during economic contraction, and you actually increase government tax revenue.

The Bush tax cuts, in reality, never decreased government revenues.

Like Rand Paul has said, we don't have a revenue problem. We have a spending problem.

More people in the Liberty movement needs to better understand the Laffer Curve and why its not only theoretically true, but has been demonstrated to be true.


http://3.bp.blogspot.com/_6xKnC2gQqCk/TJji--D5SQI/AAAAAAAAAK8/dlo6TSWq5Xo/s1600/laffer-curve1.jpg.gif

Where are we currently on this curve and why do we wish to maximize government revenues?

Southron
11-11-2010, 09:52 PM
The problem with agreeing to tax increases, I believe, is that you legitimize their spending.

If they have no will to cut spending now, then raising taxes just allows them to keep spending at the same level or even grow it.

It would be a different story if this were just the result of hard times but these politicians have been deliberately and recklessly spending for the past decade.

Until they have shown they would make major and deep cuts in spending, I would never agree to a tax hike. Just slowing the rate of growth won't cut it anymore.

Akus
11-11-2010, 10:01 PM
So since it will not happen - which is the better move? Having 700 billion more coming in to congress to pay for these massive, wasteful, stupid big-government programs - or keeping all of those aforementioned programs anyway and borrowing money to pay for them?

I have a broken arm. Since there won't be a cast applied, should I gouge out my left eye, or take a hammer and bash to the pulp my right toe?

The answer is, neither, to your question and mine. If we do not overhaul our $ policy, nothing we do will help us.

cindy25
11-11-2010, 10:06 PM
its either STARVE THE BEAST or FEED THE BEAST

if yoy starve the beast programs will be cut; if you feed the beast programs will just be added

smithtg
11-11-2010, 10:07 PM
Ok - maybe I worded that foolishly. Aren't we going to be FORCED to pay for them eventually? And won't they be more expensive for us down the road, either through inflation or through even HIGHER taxes to pay for the interest payments?

Aren't we kicking the can down the road and shooting ourselves in the foot?

Don't we have a responsibility to save ourselves from this?

lets see, right now bernanke pays for them. The goverment issues the t notes, he buys them for the banksters, and monetizes the debt. Inflation of course IS A TAX. The FED is evil and we all know it.

nothing like creating money out of thin air and making interest off it at the backs of the taxpayers. NOW THAT IS THEFT

freshjiva
11-11-2010, 10:40 PM
Where are we currently on this curve and why do we wish to maximize government revenues?

Given what we know about our current lackluster economic growth, we're well into the "prohibitive" territory of the Laffer Curve. In other words, we're somewhere very close to Point B.

We want to maximize government revenues for two reasons:

1) It would imply tax rates to be reduced from their CURRENT levels, which I think everyone here would agree to;
2) Greater tax revenues combined with the assumption that spending remains the same means the national debt declines. This in turn puts less pressure on the Federal Reserve to monetize debt with inflationism, interest payments on debt declines, and the rest is history.

I understand we all want smaller, smarter, Constitutionally limited government. But until Congress and the President get their act together, that aint happening.

So the next best thing, at this point, is to cut taxes to spur economic growth AND reduce the federal debt.

Remember: there is a difference between tax rates and tax revenues. They share an inverse relationship, up until the equilibrium point. That equilibrium changes over time, depending on the desires of the free market.

RonPaulCult
11-11-2010, 10:56 PM
Given what we know about our current lackluster economic growth, we're well into the "prohibitive" territory of the Laffer Curve. In other words, we're somewhere very close to Point B.

We want to maximize government revenues for two reasons:

1) It would imply tax rates to be reduced from their CURRENT levels, which I think everyone here would agree to;
2) Greater tax revenues combined with the assumption that spending remains the same means the national debt declines. This in turn puts less pressure on the Federal Reserve to monetize debt with inflationism, interest payments on debt declines, and the rest is history.

I understand we all want smaller, smarter, Constitutionally limited government. But until Congress and the President get their act together, that aint happening.

So the next best thing, at this point, is to cut taxes to spur economic growth AND reduce the federal debt.

Remember: there is a difference between tax rates and tax revenues. They share an inverse relationship, up until the equilibrium point. That equilibrium changes over time, depending on the desires of the free market.

Thank you for the post - very interesting!

Where were we on the scale when Bush cut the taxes 10 years ago? Did the cutting "pay for itself?"

Austrian Econ Disciple
11-11-2010, 11:03 PM
You can't raise taxes enough to cover the spending. It's impossible. If you raise taxes you will end up like Greece where most of the population actively evades the tax. Moreover, given the state of the banks and the debt and uncontrollable spending (Medicare, Medicaid, SS, SCHIP, etc.), we are pretty much guaranteed hyper-inflation unless spending is immediately reduced by 50-60% and programs eliminated. They have to print money to keep interest rates low. They have to keep rates low because any raising of the rates will destroy the banking industry. In order to pay for the spending the Government has to print the money because Foreign entities are weary of the dollar and the Governments solvency. The voting blocs in this country will resort to violence to keep the money coming in so I don't see Welfare getting cut, and Neoconservatives will drum up the fearmongering to keep defense spending coming in. The reality is we are screwed.

(If you raise interest rates the Banking Industry defaults and so does the Government (the interest on debt will skyrocket). In order to keep interest rates low you have to print money -- the savings in this country does not warrant 0% interest rates. So you can see the conundrum the Fed is in. They will inflate the money until it has no value.)

TheHumblePhysicist
11-11-2010, 11:25 PM
I think that raising taxes will also raise government control over our lives, and breed a nation of weaklings, like the people in Europe. Demanding benefits and expecting to be served by their neighbors money. It will invest huge amounts of power in the government.

Kregisen
11-11-2010, 11:30 PM
This is one thing that bothers me about Liberty scholars and spokespeople, including Peter Schiff and Ron Paul.

Although Art Laffer got it totally wrong about the banking and credit crisis, he's still spot-on about his Laffer Curve theory of tax rates.

Tax rates and tax revenues share an inverse relationship, up to a certain inflection point.

Cut taxes during economic contraction, and you actually increase government tax revenue.

The Bush tax cuts, in reality, never decreased government revenues.

Like Rand Paul has said, we don't have a revenue problem. We have a spending problem.

More people in the Liberty movement needs to better understand the Laffer Curve and why its not only theoretically true, but has been demonstrated to be true.


http://3.bp.blogspot.com/_6xKnC2gQqCk/TJji--D5SQI/AAAAAAAAAK8/dlo6TSWq5Xo/s1600/laffer-curve1.jpg.gif

The point of the Laffer curve is where you are on the curve when you cut taxes. He was Reagan's financial advisor and Reagan implemented tax cuts because of it, and tax revenue went way down.

low preference guy
11-11-2010, 11:44 PM
Maybe we should raise taxes?

OP, please go to the doctor

JoshLowry
11-11-2010, 11:46 PM
Put a fat red marker through this entire page for 2010 and beyond before you raise any of our taxes.

http://imgur.com/whQmR.png

cswake
11-13-2010, 07:35 PM
http://mercatus.org/publication/canada-s-budget-triumph


There are two morals of this story. First, the Canadian experience shows us that a large budget deficit can be turned into a budget surplus with ten years of fiscal discipline, mainly with spending cuts. It can happen here in the United States. We do not have to accept the idea that we have only two grim choices: living with huge budget deficits and a federal debt that both increase as a percent of GDP, or accepting our current spending but reducing the budget deficit with major tax increases.

The second moral of the story is that the Canadian experience does not support the Keynesian view that policymakers should not cut government spending during an economic slowdown. The Canadian experience, just like the U.S. experience during the 1920–21 recession and in the first two years following World War II, shows that cutting government spending even during low-growth years can be good for long-term economic results.

james1906
11-13-2010, 07:58 PM
Seeing that foreign aid chart, here's popular ways to cut spending

1. End all foreign military aid. No exceptions. That includes you Israel.
2. End all other foreign aid unless it's actually bettering the lives of people in piss poor countries, as most Americans think this is what foreign aid is. I don't support any government foreign aid, but if its limited to building a well for some Ugandan village or building a hospital in Bhutan, so be it.
3. Domestic military. Bring em home, put them on the southern border. Now our Dept of Defense is actually defending!
4. Air Force One. Scrap it and make the president fly domestic at the will of frotteurist perverts.
5. Congress is public service. In other words...Congress doesn't get paid.

Feel free to add to it.