GOP Congressman Warns U.S. Insolvency Could 'Cost Millions of American Lives'

[KingsX]

 Considering most pay nothing now and in fact get more in tax credits than they pay in taxes, that is a GOOD THING. More people need to pay their fair share if we are going to dig ourselves out of the debt mess we have made ourselves.

Let me get this straight ... you think it's wonderful what the GOP has proposed... to raise taxes on low and middle incomes... to help raise the almost 2 TRILLION dollars required to give a windfall tax cut for the rich ??

If so, the GOP should give you an officer's appointment in their class warfare army.

[jmyrlefuller]

Let me get this straight ... you think it's wonderful what the GOP has proposed... to raise taxes on low and middle incomes... to help raise the almost 2 TRILLION dollars required to give a windfall tax cut for the rich ??

If so, the GOP should give you an officer's appointment in their class warfare army.

I think tax rates on the rich should stay where they are,* but everything you said up to that point, yes, I agree entirely. Low and middle incomes, in the grand scheme of things, pay almost nothing. The middle-class effective tax rate is only 2.5% (see: http://www.gopbriefingroom.com/index.php/topic,283322.msg1465910.html ); in the lowest tax brackets, tax rates are effectively negative! We cannot run a country with so many people paying so little into the system, especially if people expect the size of government and military we have now; even so, there will probably be cuts needed.

I'll also note that only targeting the rich for tax increases will only make the system less stable, prone to huge deficits when the economy is in recession. By spreading out the tax burden, it is like diversifying a portfolio: risk is minimized and revenue becomes more stable.

* I say this believing that the current tax rate in that bracket is close to the apex of the Laffer curve.

[KingsX]

 I think tax rates on the rich should stay where they are,* but everything you said up to that point, yes, I agree entirely. Low and middle incomes, in the grand scheme of things, pay almost nothing. The middle-class effective tax rate is only 2.5% (see: http://www.gopbriefingroom.com/index.php/topic,283322.msg1465910.html ); in the lowest tax brackets, tax rates are effectively negative!  We cannot run a country with so many people paying so little into the system, especially if people expect the size of government and military we have now; even so, there will probably be cuts needed.

Many people don't want to support an evil draconian "system" that uses their tax money for nefarious ends.

[IsailedawayfromFR]

We have any serious bout of inflation or dollar trouble, a few percentage points rise in bonds will start taking a huge chunk out of our tax revenue. Imagine the military and social programs taking even a 20% cut.

That makes no sense.  How can taxes be that much impacted by inflation?

Are you confusing expenses(Federal Expenditures) with revenue(taxes) perhaps?

@Free Vulcan

[IsailedawayfromFR]

I assume Rep. Mo Brooks (R-Ala.) will NOT be voting in favor of the GOP's $1.5 trillion tax cut for the rich.

Can you please relay the source that backs up that statement? @KingsX

What I read was that there was a budget proposal passed that included tax cuts that would increase the deficit by $1.5 trillion over ten years.

[IsailedawayfromFR]

Can you please relay the source that backs up that statement? @KingsX

What I read was that there was a budget proposal passed that included tax cuts that would increase the deficit by $1.5 trillion over ten years.

@KingsX - Do you remain on this forum or are you asleep?

[Free Vulcan]

That makes no sense.  How can taxes be that much impacted by inflation?

Are you confusing expenses(Federal Expenditures) with revenue(taxes) perhaps?

@Free Vulcan

We gotta pay interest on that debt. We pay about $400B at an average of 2% a year now on revenues of just under $4T. Multiply that by 3 if we got to 6% and you are talking $1.2T in interest a year, just under a third of tax revenues.

Sure we can try to float debt to pay interest, but that game won't last long.

[KingsX]

 @KingsX - Do you remain on this forum or are you asleep?

You asked me to give a source for the 1.5 trillion figure,
then in your same post, you turned around and verified it yourself.

[IsailedawayfromFR]

You asked me to give a source for the 1.5 trillion figure,
then in your same post, you turned around and verified it yourself.

Nope, you misquoted.  The amount does not represent what you call 'a tax cut for the rich'.  It is an increase in debt. 

Are you saying they are synonymous? @KingsX

Since the proposed tax cut will lower taxes on all tax brackets by $5.5 trillion over 10 years, who do you call 'rich' anyway?

[IsailedawayfromFR]

We gotta pay interest on that debt. We pay about $400B at an average of 2% a year now on revenues of just under $4T. Multiply that by 3 if we got to 6% and you are talking $1.2T in interest a year, just under a third of tax revenues.

Sure we can try to float debt to pay interest, but that game won't last long.

Ok, I see you are confusing revenues with expenses, and actually are talking about the net after taxes is collected and interest is paid.

I agree that the net will be lowered, but it has nothing to do with taxes as you imply.  It is due to an increase in expenses.

[Free Vulcan]

Ok, I see you are confusing revenues with expenses, and actually are talking about the net after taxes is collected and interest is paid.

I agree that the net will be lowered, but it has nothing to do with taxes as you imply.  It is due to an increase in expenses.

More thinking along the lines that particularly foreign govts are not going to let the USA use debt to cover interest payments in order to keep military and social spending the same (those are around 80% of the budget).

In other words, we will have to go on a cash basis, and operate our budget out of the revenues we have. Our debt has an average 6 year maturity, so anything that causes rates to tick up and stay there means something else will have to be reduced to pay for that increased interest payment to avoid default.

Being military and social programs are the biggest chunk of the budget, that is where the cuts will be. Not only will that weaken our defense, but imagine the chaos if social programs get a deep cut of 20% or more.

[IsailedawayfromFR]

More thinking along the lines that particularly foreign govts are not going to let the USA use debt to cover interest payments in order to keep military and social spending the same (those are around 80% of the budget).

In other words, we will have to go on a cash basis, and operate our budget out of the revenues we have. Our debt has an average 6 year maturity, so anything that causes rates to tick up and stay there means something else will have to be reduced to pay for that increased interest payment to avoid default.

Being military and social programs are the biggest chunk of the budget, that is where the cuts will be. Not only will that weaken our defense, but imagine the chaos if social programs get a deep cut of 20% or more.

If our economy continues to strengthen (and higher interest rates is indicative of that), we will need less social welfare, so that will make up a portion of that. 

Are you suggesting that a haircut of 20% in social programs is unwarranted or just relaying the social unrest that will result if otherwise employable people are forced to work?  If the latter, then let's get the social unrest begin as I for one am tired of lazy Americans with their hands out robbing the productive of their money. 

These two graphs are indicative of the need to cut, and cut bigtime.

[Free Vulcan]

Are you suggesting that a haircut of 20% in social programs is unwarranted or just relaying the social unrest that will result if otherwise employable people are forced to work?  If the latter, then let's get the social unrest begin as I for one am tired of lazy Americans with their hands out robbing the productive of their money. 

The latter. That and it could kick us into a very negative economic spiral that will hurt those that do work.

[IsailedawayfromFR]

The latter. That and it could kick us into a very negative economic spiral that will hurt those that do work.

I presume the 'negative spiral' you are talking about is increased interest payments which increase our debt that much more?

It is not a negative spiral to take people off welfare and force them to work in order to eat.

[Free Vulcan]

I presume the 'negative spiral' you are talking about is increased interest payments which increase our debt that much more?

It is not a negative spiral to take people off welfare and force them to work in order to eat.

More the civil unrest caused by DC not being able to spend like a drunken sailor anymore would create disruptions in the real economy due to the resulting vandalism, looting and such.

With the money that the FedGov pumps into the cities and states, not sure if they would have the capacity to keep things under control were that spending drastically reduced.

[jmyrlefuller]

It is not a negative spiral to take people off welfare and force them to work in order to eat.

You assume they have something to offer the workforce, when a good chunk of American industry can't even use the able-bodied ones they have now.

[KingsX]

.

The GOP had better get off its tax fiasco high horse before it falls down...
or pulled down by low income singles over 65 who will get a tax INCREASE
under the GOP's proposed plan.

[IsailedawayfromFR]

You assume they have something to offer the workforce, when a good chunk of American industry can't even use the able-bodied ones they have now.

If that is true, why import non-American workers?

[IsailedawayfromFR]

.

The GOP had better get off its tax fiasco high horse before it falls down...
or pulled down by low income singles over 65 who will get a tax INCREASE
under the GOP's proposed plan.

Pure hyperbole.  You refuse to show where the source for your $1.5 trillion tax cut for the rich came from.