Why both Obama and McCain will raise taxes

Don · Oct 14, 2008

Adventures in Fiscal Fairyland points out that both Obama and McCain plan to increase government spending by hundreds of billions; McCain to buy mortgages, Obama for a long list of entitlement programs.

Yet, they both claim zero or very limited tax increases, and decreases to the vast majority of Americans. Obama's tax plan would increase revenue only $60 billion, a fraction of the proposed additional spending. The article interjects a cold dose of reality:

Reality stipulates that every government outlay has to be paid for. When the government enlarges spending by $300 billion, it can do one of three things. It can cut $300 billion in other spending. It can raise taxes by $300 billion. Or it can borrow money at interest, which adds yet more spending.

Both claim that they'll be able to shave that $300 billion or so from existing programs. With a collapsing economy and wars in Iraq, Afghanistan, and soon Pakistan or Iran, how's that going to happen? And what about the trillions in unfunded liabilities that we face, and have barely been mentioned in this campaign. What about the national infrastructure, which currently receives a grade of D from the American Society of Civil Engineers, and also has not been addressed?

Each family's share of the existing national debt is over $78,000... read that again. Every family in America owes $78,000 the politicians have pissed away in one form or another, and both candidates are going to increase that debt. Is this what passes for responsible leadership today?

The article sums up the situation nicely.

For all their differences, Obama and McCain agree on one central policy: to go on living in Fiscal Fairyland. It will be nice while it lasts.

dmytryp · Oct 14, 2008

I think these three posts belong here
http://www.absolutewrite.com/forums/showpost.php?p=2845103&postcount=38
http://www.absolutewrite.com/forums/showpost.php?p=2845138&postcount=41
http://www.absolutewrite.com/forums/showpost.php?p=2845165&postcount=42

Don · Oct 14, 2008

Very pertinent posts, dmytryp. Thanks.

dmytryp · Oct 14, 2008

Don said:
Very pertinent posts, dmytryp. Thanks.

If the analysis in the first link is correct (and I don't see why it wouldn't be), in three years more than 50% of taxpayers would pay no income taxes and most of them would get checks from the IRS. How is that for wealth redistribution. Truly scary. And the numbers in ten years.... Just wow

MoonWriter · Oct 14, 2008

dmytryp said:
I think these three posts belong here
http://www.absolutewrite.com/forums/showpost.php?p=2845103&postcount=38
http://www.absolutewrite.com/forums/showpost.php?p=2845138&postcount=41
http://www.absolutewrite.com/forums/showpost.php?p=2845165&postcount=42

I've been wondering for a while how long people are going to stand for having more and more of their income taken away by taxes. That first link says that people who don't pay taxes get a credit? As in free cash? Wow!

Tax freedom day for 2008 is April 23rd. That's how long we have to work to pay federal taxes. Then, there's state and local taxes. Then, there's sales taxes.

I'm wondering how many people may say, *uck it, I'm barely making it now. Why not get free food and housing, etc., etc. and get a little cash kickback to boot. That would lead to more people sharing the tax burden until only Bill Gates is carrying the load.

Don · Oct 14, 2008

MoonWriter said:
I'm wondering how many people may say, *uck it, I'm barely making it now. Why not get free food and housing, etc., etc. and get a little cash kickback to boot. That would lead to more people sharing the tax burden until only Bill Gates is carrying the load.

I can't answer that, but I'm not the only person I know who was making an excellent living and decided to retire at 55, instead of working half the year to feed FedGov and it's little vote-buying schemes. Shrug, baby, Shrug!

James81 · Oct 14, 2008

There is a way they can start making MOUNTAINS of money and not raise taxes on current taxpayers one dime:

The 40% of Americans who get their money refunded (and THEN SOME in a lot of cases of people who have kids), let's stop doing that.

Ok, so you say, that will put an unnecessary burden on those people and hurt our economy. To which I vehemently disagree. These people are missing that money all year round and then get it all back in one big chunk once a year. Are these people REALLY going to hurt THAT much if they don't get that refund? Not on a day to day basis, they aren't. They just aren't going to be able to buy that big screen TV they want come tax time anymore.

Let's stop pretending like it's the government's responsibility to give us hand outs, and let's start making everybody pay SOMETHING in each year.

Hey, even if they only refunded HALF of what people paid in (instead of the full amount that they are getting back) you would probably net quite a bit of coin right there.

If the government wasn't so focused on giving handouts to everybody, it would have the money to do the things it needs to do. I believe that the job of giving handouts should be for CHARITIES. Encourage charities to spring up in place of these refunds to help those on the lower end of the pay scale and reward these charities for doing so.

My $0.02.

dmytryp · Oct 14, 2008

James81 said:
There is a way they can start making MOUNTAINS of money and not raise taxes on current taxpayers one dime:

The 40% of Americans who get their money refunded (and THEN SOME in a lot of cases of people who have kids), let's stop doing that.

Ok, so you say, that will put an unnecessary burden on those people and hurt our economy. To which I vehemently disagree. These people are missing that money all year round and then get it all back in one big chunk once a year. Are these people REALLY going to hurt THAT much if they don't get that refund? Not on a day to day basis, they aren't. They just aren't going to be able to buy that big screen TV they want come tax time anymore.

Let's stop pretending like it's the government's responsibility to give us hand outs, and let's start making everybody pay SOMETHING in each year.

Hey, even if they only refunded HALF of what people paid in (instead of the full amount that they are getting back) you would probably net quite a bit of coin right there.

If the government wasn't so focused on giving handouts to everybody, it would have the money to do the things it needs to do. I believe that the job of giving handouts should be for CHARITIES. Encourage charities to spring up in place of these refunds to help those on the lower end of the pay scale and reward these charities for doing so.

My $0.02.

So, give with one hand, take with another. That's a neat approach

MoonWriter · Oct 14, 2008

James - Amen to what you say below.

Let's stop pretending like it's the government's responsibility to give us hand outs, and let's start making everybody pay SOMETHING in each year.

Your statement below - I'm not sure 40% get their money refunded, but I'm pretty sure 40% don't pay any taxes to begin with. Those that do pay taxes get a refund because their estimated payments exceeded what they were required to pay. If you didn't refund that money, you would essentially be increasing the tax rate of whoever was due a refund. I know of a few people who invest their refund checks for their retirement, after all, how many big screen TV's does a person need.
The 40% of Americans who get their money refunded (and THEN SOME in a lot of cases of people who have kids), let's stop doing that.

James81 · Oct 14, 2008

dmytryp said:
So, give with one hand, take with another. That's a neat approach

No, it's more like "take with both hands". But hey, it's not taking anything that they aren't used to having them take anyway (everybody who works has taxes deducted from their paycheck and has to live for 11 months of the year without that money anyway.

Like I said, these people use our roads, schools, and other government programs just like the rest of us (if not moreso). Why do THEY get a refund just because they make less? Not the government's job to be a charity.

MoonWriter said:
I know of a few people who invest their refund checks for their retirement,

I'd love to know how many of the lower class are actually doing that (the lower class--for lack of a better phrase--are probably way more likely to spend that money on big things than to even have a retirement account in the first place).

And let's be realistic...the government isn't TAKING anything away from these people. They would just stop GIVING these handouts to them. And you know, there's nothing stopping people to put together a charity/program on a private level to help offset this. And the government could ENCOURAGE those charities to start up for much cheaper than they could just handing everybody a refund on April 15th (or whenever they get their checks).

James81 · Oct 14, 2008

And by the way, this is the first year ever that I haven't gotten a refund of some sort. So I'm stepping on my own toes with these posts.

dmytryp · Oct 16, 2008

Another relevant and more recent link

ricetalks · Oct 16, 2008

So you work and your employer deducts too much taxes off you and sends it to the federal government. Sorry, no refund.

Phoebe H · Oct 16, 2008

MoonWriter said:
I've been wondering for a while how long people are going to stand for having more and more of their income taken away by taxes. That first link says that people who don't pay taxes get a credit? As in free cash? Wow!

My understanding is that these credits are still no more than the FICA that is paid. So it is wrong to say that these people aren't paying taxes. They just aren't paying Federal Income Tax. Net net, they are still paying some federal, payroll-related taxes. Especially if you *also* figure in the Employer share which is being paid on their behalf.

dmytryp · Oct 17, 2008

ricetalks said:
So you work and your employer deducts too much taxes off you and sends it to the federal government. Sorry, no refund.

????

James81 · Oct 17, 2008

dmytryp said:
????

I think he was talking about my replies.

I didn't grace it with a reply because I thought it was just common sense that that is not what I was talking about at all.

James81 · Oct 17, 2008

But if we're talking about refunds, I'll just say that if you receive a rather large refund, I consider it poor financial planning on your part. You are essentially giving the government an interest free loan.

AncientEagle · Oct 17, 2008

James81 said:
But if we're talking about refunds, I'll just say that if you receive a rather large refund, I consider it poor financial planning on your part. You are essentially giving the government an interest free loan.

I thought that's what you were talking about all along.
Which is my business and nobody else's.

James81 · Oct 17, 2008

AncientEagle said:
Which is my business and nobody else's.

You are right. If you want to give the government free money, that is most definately your perogative.

Why both Obama and McCain will raise taxes

Don

All Living is Local

dmytryp

Don

All Living is Local

dmytryp

MoonWriter

practical experience, FTW

Don

All Living is Local

James81

Great Scott Member

dmytryp

MoonWriter

practical experience, FTW

James81

Great Scott Member

James81

Great Scott Member

dmytryp

ricetalks

Phoebe H

dmytryp

James81

Great Scott Member

James81

Great Scott Member

AncientEagle

Old kid, no need to be gentle.

James81

Great Scott Member