How would you balance the budget?

[cawacko]

Yes, I agree it's used mostly as a bludgeon. However, I think you left out the most important aspect of how we could address it: raising revenues. Our spending levels aren't actually that high, relative to GDP, for a developed nation. In fact, they're well below normal:

https://data.oecd.org/gga/general-government-spending.htm

And if you counted only non-defense spending, it's extremely low -- just 37.9% of GDP, compared to 38.5% for Japan, 42.2% for Great Britain, 42.7% for Germany, and 55.0% for France. In theory, we could further starve our already-anemic spending, but wouldn't it make more sense to address our radically low taxation?

So status quo on spending and just increase taxes. Sure, why not

 

[Billy the Great Khan]

You will have SS. SS is an easy fix. Otherwise, I agree with the above. Especially the war on drugs comment and cut to federal admin salaries.

I'd make a bet with you that I won't, but you'll be dead by the time I'd come to collect.

 

[dukkha]

You won’t like my answer. So stick with yours. I am sure you think you are right.

PS

where are you going to cut $300 billion out of military budget?

we just went thru that with Sequestor, and we lost quality personnel and weapons systems parts were impossible to get.
Hopefully the start up costs on the F-35 are done, and our new stealth fleet fully funded.

Entitlement are where the big money is

 

[Billy the Great Khan]

It would also cut federal subsidies to farmers, add a user fee on e-cigarettes and end a tax credit for electric car purchases.

People are gonna love these budget proposals!

Hes also includes $20 million for a Jack Nicklaus project after they paid to played a round of golf. Wonder if Jack let Trump win. Does Nicklaus have to register as a lobbyist now?

Lol "user fee". Ok.

 

[cawacko]

They may be utterly incompetent when it comes to most things, but they're masterful propagandists. They realize that if they simply talk the talk of being fiscal hawks, the corporate media will feel too sheepish to point out the reality, and most people will be too lazy to seek it out on their own.

I’m sorry, the irony of MMT supporters claiming fiscal responsibility and knowledge of fiscal analysis and understanding is too much.

 

[Eagle_Eye]

Trump's budget proposal is out and he is proposing trillion-dollar deficits as far as the eye can see. Since conservatives used to pretend they cared about deficits, I'm wondering what conservatives here would do to remedy that.

From a liberal perspective, achieving a balanced budget isn't that hard, since we don't treat our radically low taxes as a given, nor do we put our largest area of discretionary spending off-limits.

For example, using 2018 data from the International Institute for Strategic Studies, consider the proposal of reducing our military budget to "only" 50% more than the combined spending of our two top potential opponents, Russia and China. That would be a huge budget in its own right, but it would save us about $300 billion per year.

Now consider taxes. The average tax revenues for a developed nation are 34.19% of GDP. So, say we wanted to be taxed less than a normal amount, but not radically less -- let's say 10% less than if we were at the developed-nation average. Based on a GDP of $20.9 trillion, that would bring in about $760 billion extra per year. So, right there, with $760 billion in extra revenues and $300 billion in lower spending, we've gone from a deficit to a surplus -- from about a $984 billion FY 2019 deficit, to a $76 billion surplus.

Note, were not talking about any hard sacrifices there. We'd remain a significantly "under-taxed" country, by the standards of developed nations, making us more attractive to business than our peers. And we'd continue to have a military budget about twice as large as the next-closest country's. So, as I said, this isn't a terribly difficult math problem for liberals. But how do you get there as a conservative? When you insist on radically low taxes and absurdly high military-industrial pork, where can you find enough savings to reach balance?

That's the problem Trump was tackling with his budget. Yet, despite his willingness to betray his campaign promises (and the nation's promise to its elderly) by slashing Medicare and Social Security, he couldn't even move the numbers in the right direction. So, if you could dictate the budget, could you reach balance? How, would you do it, in terms of specific numbers and programs?

Says the young lady who works and lives in one of the heavy tax state/city's in the US. I guess misery loves company. LOL

 

[dukkha]

Pull out of NATO, close all overseas bases, cut defense spending by 1/3, raise SS age to 85, allow people under 35 to opt out of paying into it (because we will never get that money back), end the War on Drugs, get rid of the DEA, ATF, and a bunch of other alphabet soup agencies, and a 25% cut to all federal administrative salaries.

first stop with the Russiaphobia and expanding and "beefing up" NATO

 

[Superfreak]

I'd make a bet with you that I won't, but you'll be dead by the time I'd come to collect.

I would take that bet. The numbers are not that bad. The millennial generation is larger than the boomers. Right now there is about a ten year window they need to shut. If they implement the suggestion I made, it would shut it and resolve the issue for your generation and well beyond. That said, if they do nothing (which is likely) then my generation will be the ones to get cut first.

 

[USFREEDOM911]

I would take that bet. The numbers are not that bad. The millennial generation is larger than the boomers. Right now there is about a ten year window they need to shut. If they implement the suggestion I made, it would shut it and resolve the issue for your generation and well beyond. That said, if they do nothing (which is likely) then my generation will be the ones to get cut first.

How about just making Congress pay back all the money they TOOK OUT of the SS fund.

 

[Oneuli]

Before I begin with how to fix this... We do not have 'radically low taxes'.

If you judge in the context of wealthy nations generally, we definitely do. Our tax revenues are lower as a share of GDP than any other large, wealthy nation's. There are small "boutique" economies with even lower taxes as a share of GDP, but that's largely because of GDP being inflated by way of accounting quirks (basically, banking/finance hubs where companies account for gains actually produced elsewhere, creating a misleading ratio). Yet, even some of those have higher tax revenues as a share of GDP than us, like Switzerland. No big wealthy nation has taxes anywhere near as low as ours.

Replace it with a Flat tax of 20% on earned income from 0-$500k. Additional 10% tax on anything over that.

That would be awesome news for the super-rich, who would experience it as a windfall. The most recent data I saw says the top 1% paid an effective rate of 33.3%. If you made it so it could never rise above 30%, they'd be much better off. So, if you think our problem in this country is that the rich haven't been pulling away from the rest of the nation fast enough: problem solved.

Meanwhile, your 20% tax, even with the $30k standard deduction, would be a tax hike for the middle class.

https://www.taxpolicycenter.org/statistics/historical-average-federal-tax-rates-all-households

So, again, if the problem in this country is that the middle class simply has way too much take-home pay: problem solved.

Now, what do you think that new income tax structure would bring in, in terms of revenues? Keep in mind the existing tax, according to that link I provided, averages 21.1% for the population as a whole. Throw in a $30k deduction for everyone, and you're going to be coming in with much lower revenues than currently collected, right? So doesn't this move you in the exact opposite direction -- towards larger deficits?

3) Healthcare costs: It doesn't matter how we pay for healthcare if we don't address the cost issue. What is driving the costs so high? Why is it so expensive to get a medical degree? Why are insurance costs so high for doctors/hospitals? I have more questions than answers here, but this is first place to start.

We have plenty of models to work with, in terms of systems that achieve better public health results for half the per-capita cost that we pay. I'd start there. What would we need to emulate those systems?

4) Social security: Fix it with an additional 3% tax on income over $500k. That would resolve the issue. Social Security is not nearly as big of a problem as people think. Medicare is... which is due to number three above.

Even just taking out the SS tax cap would do it, for the foreseeable future. So would including unearned income (dividends, capital gains, interest) in the SS tax base. I agree with you that Medicare is the bigger issue.

I think the area for discussion for the two of us would be on taxation. I want more transparency and simplicity in the tax code.

I do, too. But you don't need a flat tax for that. The brackets aren't what take up so many pages. You could fit a highly progressive tax into a single line of text, if you used a polynomial equation, or into a half-page of text, if you used a bracketing system. The complexity comes from sweetheart deals.... for example, special treatment for farms as opposed to other businesses. Once you start creating those sweetheart deals, you then end up growing hundreds of pages of text to keep those deals from having unintended consequences. For example, if debt on farms gets treated better than debt on other businesses, for tax purposes, then you need all sorts of rules to make sure people aren't calling things "farms" that aren't really farms.

 

[canceled.2021.1]

You're correct. I am. However, I encourage you to try to make the numbers work. I think you may be surprised how difficult it is to reach balance without touching the parts of the budget the conservatives treat as off-limits.



The options are many. Keep in mind that every other nation on Earth manages to get by with a small fraction of our spending, and the level I'm targeting would leave us spending over twice as much as anyone else. If they can do it, we can, too. If we reduced the military budget by $300 billion, relative to what IISS lists for 2018, that would be a $343.3 billion budget... not that much lower than the inflation-adjusted amount we spent back in the 1990s. Where, specifically, could we find savings? Well, for starters, we don't need the next generation of fighter jets and bombers, since our current generation is already superior to anything our adversaries can deploy in any significant numbers. We also can mothball most of the aircraft carrier fleet -- Russia gets by with a single carrier, which isn't even half the size and capabilities of ours, and China's got two of those derelicts. There's no reason we need a dozen of those giant money holes. We can also pull back from many of our overseas positions, and decrease our force size, while scrapping most of the kinds of forces that are based on the idea that we're going to be waging a major conventional war against the Warsaw Pact (artillery, tanks, etc.) Our nuclear force is also wildly excessive -- many times more than needed for mutually assured destruction, and absurdly expensive because of it. And we can retire a large portion of our general officers, since we have a top-heavy force full of political animals with more stars than brains.

How would I balance the budget?

OK. I will play along

First

Eliminate the following gobblement agencies: FDA, EPA, Agriculture, Commerce, Interior, Education, Labor, energy, Health and Human Services and Transportation

End Medicaid. Phase out Socialist Insecirity and Medicare

Close every base in every foreign land

End all foreign aid

End all pensions for Congress and Presidents abt their staff

Cut congressional pay by 25%

Cut government worker pay by 25%

Convert government pensions to 401k

Make it illegal for gobblement workers to unionize

That’s a good start

 

[USFREEDOM911]

They should impose a huge tax (90%) on Movie Stars and Movie Makers.

Just a few examples
Captain Marvel $153,433,423
How to Train Your Dragon: The Hidden World $14,685,005
Tyler Perry's A Madea Family Funeral $12,465,383

 

[Oneuli]

What the leg humping moron fails to mention is Bill Clinton is responsible for the largest tax giveaway to the wealthy EVER. Lowering long term cap gains to 20%. Gee golly, I wonder who it is that benefits the most from that?

There's a reason the rich didn't like Clinton, and sponsored an endless investigation and eventual impeachment to try to get rid of him. He raised taxes on them. Yes, that was partly offset by decreasing the maximum long terms capital gains rate. But only partly.

 

[Oneuli]

So status quo on spending and just increase taxes. Sure, why not

No. I proposed a large decrease in the largest area of discretionary spending.

 

[Oneuli]

It would also cut federal subsidies to farmers, add a user fee on e-cigarettes and end a tax credit for electric car purchases.

People are gonna love these budget proposals!

Hes also includes $20 million for a Jack Nicklaus project after they paid to played a round of golf. Wonder if Jack let Trump win. Does Nicklaus have to register as a lobbyist now?

The problem is most of that stuff is small potatoes. For example, how much do you think we spend on tax credits for electric car purchases. The White House proposed killing that credit and said it would save $2.5 billion over the course of a decade. Even if they're right, that's $250 million per year. It's chump change in the big picture. To put it in perspective, if you shaved even 1% off the military budget, for just a single year, you could finance that EV credit for a quarter century.

 

[Oneuli]

Says the young lady who works and lives in one of the heavy tax state/city's in the US. I guess misery loves company. LOL

There's a reason people are willing to shell out big bucks as the "admission price" for the privilege of living in NYC. It's a wonderful place. In this case, it isn't misery that loves company. It's joy. I'd like to share the joy I have in life.

 

[Oneuli]

How would I balance the budget?

OK. I will play along

I hope you will. As you'll recall, though, I was looking for numbers. What savings do you project from the changes you're calling for.

Also, in the absence of those agencies, who will do that work? For example, when the FDA is gone, are you looking for us to return to something like the 19th century situation, where quacks could sell poisonous patent medicines based on false claims? Without the EPA, will we return to the point where people can dump whatever the hell they want into the nearest water supply? Without the Labor department, will we go back to having death trap factories with child workers and no overtime? If not, who will enforce?

Socialist Insecirity

What is "Socialist Insecirity"?

End all pensions for Congress and Presidents abt their staff

I couldn't parse this sentence.

Cut congressional pay by 25%

The problem is is Congressional pay gets too low, you'll mostly just get independently wealthy people taking those jobs, and Congress will do even less to look out for the little people. If you want upper-middle-class professionals with student loans, you need to pay enough to cover those costs, and the costs of maintaining homes in DC and their districts.

Make it illegal for gobblement workers to unionize

What's a "gobblement"?

 

[Oneuli]

They should impose a huge tax (90%) on Movie Stars and Movie Makers.

Just a few examples
Captain Marvel $153,433,423
How to Train Your Dragon: The Hidden World $14,685,005
Tyler Perry's A Madea Family Funeral $12,465,383

How much do you think that would bring in?

Anyway, the problem there is that the big-money productions are highly mobile. If you make it expensive to produce them in the US, they'll just hop the border and do it in Canada, etc. It's not like trying to move a factory and large workforce.

 

[USFREEDOM911]

How much do you think that would bring in?

Anyway, the problem there is that the big-money productions are highly mobile. If you make it expensive to produce them in the US, they'll just hop the border and do it in Canada, etc. It's not like trying to move a factory and large workforce.

More then it's bringing in now or do you disagree that it would bring in more money.

But shouldn't they be willing to pay the tax or do you just disagree with Hollywood and condemn businesses and "the rich" that do what you've just said, about "hop the border"??

 

[Superfreak]

If you judge in the context of wealthy nations generally, we definitely do. Our tax revenues are lower as a share of GDP than any other large, wealthy nation's. There are small "boutique" economies with even lower taxes as a share of GDP, but that's largely because of GDP being inflated by way of accounting quirks (basically, banking/finance hubs where companies account for gains actually produced elsewhere, creating a misleading ratio). Yet, even some of those have higher tax revenues as a share of GDP than us, like Switzerland. No big wealthy nation has taxes anywhere near as low as ours.

I am talking in context to other wealthy nations. Provide an example of someone who you are referring to if you would. https://tradingeconomics.com/country-list/government-spending-to-gdp

That would be awesome news for the super-rich, who would experience it as a windfall. The most recent data I saw says the top 1% paid an effective rate of 33.3%. If you made it so it could never rise above 30%, they'd be much better off. So, if you think our problem in this country is that the rich haven't been pulling away from the rest of the nation fast enough: problem solved.

First, please show me where you see the 1% have an effective rate of 33.3%. Because that is not believable at all. Second, the 30% is much higher than the top rate of 20% on long term cap gains and much higher than the actual effective tax rate of about 24% the top 1% pay. Third, as I stated, the numbers were an example. So even if your numbers were correct, then put it at 35%.

Meanwhile, your 20% tax, even with the $30k standard deduction, would be a tax hike for the middle class.



https://www.taxpolicycenter.org/statistics/historical-average-federal-tax-rates-all-households

No, it wouldn't be. Not even close. Do the math. Middle income is about $45k-125k. The first $60k for the couple would be tax free (federal income tax wise). The max of $125k would see a total tax of $13k giving them an effective tax rate of 10.4%. Which is far lower than they would currently pay.

Now, what do you think that new income tax structure would bring in, in terms of revenues? Keep in mind the existing tax, according to that link I provided, averages 21.1% for the population as a whole. Throw in a $30k deduction for everyone, and you're going to be coming in with much lower revenues than currently collected, right? So doesn't this move you in the exact opposite direction -- towards larger deficits?

Again, the numbers are examples, but no, if you raise the taxation on those that earn more, which you would be, then the revenues should be the same if not higher. Again, the percentages used are examples of how it would work. If the numbers need to be tweaked, then fine.

We have plenty of models to work with, in terms of systems that achieve better public health results for half the per-capita cost that we pay. I'd start there. What would we need to emulate those systems?

Who?

Even just taking out the SS tax cap would do it, for the foreseeable future. So would including unearned income (dividends, capital gains, interest) in the SS tax base. I agree with you that Medicare is the bigger issue.

First, no, you don't just take out the cap. Do it as I suggested and it hits higher income earners. Why tax those under $500k more? Second, no, you don't tax other income sources. SS is based on earned income.

I do, too. But you don't need a flat tax for that. The brackets aren't what take up so many pages. You could fit a highly progressive tax into a single line of text, if you used a polynomial equation, or into a half-page of text, if you used a bracketing system. The complexity comes from sweetheart deals.... for example, special treatment for farms as opposed to other businesses. Once you start creating those sweetheart deals, you then end up growing hundreds of pages of text to keep those deals from having unintended consequences. For example, if debt on farms gets treated better than debt on other businesses, for tax purposes, then you need all sorts of rules to make sure people aren't calling things "farms" that aren't really farms.

First, mine is a two tier bracket, not completely flat. Second, the high standard deduction makes the entire thing progressive. Third, as I stated, it is the elimination of the deductions, loopholes and subsidies that we need. Which is why I stated to eliminate them all. I think on this we agree, other than perhaps the number of brackets.