For most of you, you’re safe (Tax on Rich)

[Coronita]

http://finance.yahoo.com/news/hopes-rise-fiscal-cliff-deal-030313876.html

Looks like “rich” is going to be redefined somewhere between 400k-1million/year…..

Finally, at least the definition is closer to reality now. Still hate the tax though, still think it’s not gonna do didly but allow the government to spend more…

BUT… It’s not my concern anyway too… So, like I said in other areas…No longer my problem…. Heh heh..

Cool, time to start moving things back into dividends in a post-tax account again.

[SK in CV]

I doubt those spending increases you expect are going to happen. You know, federal government growth over the last 3 years has been the smallest it’s been in decades.

[Coronita]

[quote=SK in CV]I doubt those spending increases you expect are going to happen. You know, federal government growth over the last 3 years has been the smallest it’s been in decades.[/quote]

I hope you are right. I hope now that we have a slightly more balanced government with both sides having to compromise to get stuff done, government will have a slightly harder time to spend. I am pretty happy both Boner(sic) and NoObama starting to compromise

[livinincali]

[quote=SK in CV]I doubt those spending increases you expect are going to happen. You know, federal government growth over the last 3 years has been the smallest it’s been in decades.[/quote]

Great use of picking a good starting point to base your argument. Government spending went up over 15%(3.168 trillion to 3.696 trillion) in one year between 2008 and 2009 so lets use 2009 as our starting point. How about we use 2000 or 2002 as our starting points. From 2002 government spending went up 41% (2515 to 3563) yet government revenue went up 5% (2318 to 2435). Entitlement spending went from 1383 in 2002 to 2053 in 2012 which is an increase of almost 50%. US GDP grew from 11.59 trillion in 2002 to 13.62 trillion in 2012 for an increase of 17.5%.

So where is the big problem in government, it’s right there in entitlement spending. It’s increasing much faster that any of the other categories. GDP growth won’t fix it, tax revenues which are based on GDP won’t fix it. The only way to fix it is to stop growth in entitlement spending or perhaps shrink it.

Guess what the affordable care act (aka Obamacare) does to entitlement spending in the future?

[SK in CV]

[quote=livinincali][quote=SK in CV]I doubt those spending increases you expect are going to happen. You know, federal government growth over the last 3 years has been the smallest it’s been in decades.[/quote]

Great use of picking a good starting point to base your argument. Government spending went up over 15%(3.168 trillion to 3.696 trillion) in one year between 2008 and 2009 so lets use 2009 as our starting point. How about we use 2000 or 2002 as our starting points. From 2002 government spending went up 41% (2515 to 3563) yet government revenue went up 5% (2318 to 2435). Entitlement spending went from 1383 in 2002 to 2053 in 2012 which is an increase of almost 50%. US GDP grew from 11.59 trillion in 2002 to 13.62 trillion in 2012 for an increase of 17.5%.

So where is the big problem in government, it’s right there in entitlement spending. It’s increasing much faster that any of the other categories. GDP growth won’t fix it, tax revenues which are based on GDP won’t fix it. The only way to fix it is to stop growth in entitlement spending or perhaps shrink it.

Guess what the affordable care act (aka Obamacare) does to entitlement spending in the future?[/quote]

Defense spending over the same period went from about $400B to $800B, an increase of 100%.

The biggest portion of entitlement spending is SS. Yet SS collections over those same years exceeded SS spending. That increase in spending is purely a function of more people reaching retirement age. Much of the additional entitlement increases were purely a function of economic decline. Those expenditures will (and already have) decline as the economy improves. There has been no major permanent statutory entitlement expansion in the last 10 years with the exception of the drug coverage for medicare recipients (save for those that have not yet fully gone into effect).

[Hobie]

Back in the day, 1984, an independent council was formed to identify waste in Government. The Grace commission came up with 2,478 ways to reduce federal waste, to the tune of $424 billion over a three-year period.

Nothing substantal ever became of it because in the words of Peter Grace, ” I didn’t realize what a bunch of shits Congressmen are. I thought all we’d have to do was point to where savings could be made, and then they would be glad to do something to stop the waste.” He thinks they won’t change until voters demand it.

Seems like not much changes and the tumor keeps growing.

[no_such_reality]

Here, I’ll balance the budget.

Step one, expire the Obama extended Bush tax cuts.
Step two: let the FICA tax reduction expire.
Step three: reduce military budget by 40% bring the war troops home. (Psst, we’ll still be spending a half trillion on the military.)
Step four: reduce discretionary spending by 20%.

There. budget balanced.

IT is the f-ing simple.

[livinincali]

[quote=SK in CV]
Defense spending over the same period went from about $400B to $800B, an increase of 100%.

The biggest portion of entitlement spending is SS. Yet SS collections over those same years exceeded SS spending. That increase in spending is purely a function of more people reaching retirement age. Much of the additional entitlement increases were purely a function of economic decline. Those expenditures will (and already have) decline as the economy improves. There has been no major permanent statutory entitlement expansion in the last 10 years with the exception of the drug coverage for medicare recipients (save for those that have not yet fully gone into effect).[/quote]

Here’s a complete break down of each government category in spending between 2002 and 2012. Social security is currently the biggest, but it’s Medicare that’s probably the biggest problem.

[livinincali]

[quote=no_such_reality]Here, I’ll balance the budget.

Step one, expire the Obama extended Bush tax cuts.
Step two: let the FICA tax reduction expire.
Step three: reduce military budget by 40% bring the war troops home. (Psst, we’ll still be spending a half trillion on the military.)
Step four: reduce discretionary spending by 20%.

There. budget balanced.

IT is the f-ing simple.[/quote]

Ok, let’s see.

Revenue 2.435 trillion.

Expire tax cuts let’s be generous and add $200 billion. Revenue = 2.635 trillion.

Expire payroll tax for another $120 billion or so. Revenue = 2.755 trillion.

Now for spending $3.563 trillion.

Reduce military by 40% so 676*.4 = $270 billion so spending is now $3.293.

Reduce discretionary by 20% so 1.289*.2 = 257.8 billion so spending is now 3.035.

So we got closer but we need another 3.035-2.755 = $280 billion in cuts or revenue.

It gets pretty hard when you don’t touch entitlements, doesn’t it.

[no_such_reality]

CBO says expiring tax cuts is $4 Trillion over decade.

Let’s keep it simple and say it’s $400 billion. http://www.cbo.gov/sites/default/files/cbofiles/attachments/08-22-2012-Update_to_Outlook.pdf

Or let’s just look at CBO baseline revenue projection: $2.913T.

So $3.035T – $2.913T. So I’m short $120 Billion.

Fine increase cuts by 5%.

45% defense. 25%discretionary. Or would you like to quiblle over the $20Billion?

Of 40% defense and 30% discretionary. net $129 Billion gain to close the gap.

Or let’s really have fun, 50% defense, 30% discretionary, expire the tax cuts, payroll cuts and have enough to pay off the debt in 183 Years!

[SK in CV]

[quote=livinincali]
Ok, let’s see.

Revenue 2.435 trillion.

Expire tax cuts let’s be generous and add $200 billion. Revenue = 2.635 trillion.

Expire payroll tax for another $120 billion or so. Revenue = 2.755 trillion.

Now for spending $3.563 trillion.

Reduce military by 40% so 676*.4 = $270 billion so spending is now $3.293.

Reduce discretionary by 20% so 1.289*.2 = 257.8 billion so spending is now 3.035.

So we got closer but we need another 3.035-2.755 = $280 billion in cuts or revenue.

It gets pretty hard when you don’t touch entitlements, doesn’t it.[/quote]

Projected revenues for the current fiscal year are over $2.9 trillion. With those cuts, we’ll have a surplus. No entitlement cuts required.

[UCGal]

[quote=no_such_reality]CBO says expiring tax cuts is $4 Trillion over decade.

Let’s keep it simple and say it’s $400 billion. http://www.cbo.gov/sites/default/files/cbofiles/attachments/08-22-2012-Update_to_Outlook.pdf

Or let’s just look at CBO baseline revenue projection: $2.913T.

So $3.035T – $2.913T. So I’m short $120 Billion.

Fine increase cuts by 5%.

45% defense. 25%discretionary. Or would you like to quiblle over the $20Billion?

Of 40% defense and 30% discretionary. net $129 Billion gain to close the gap.

Or let’s really have fun, 50% defense, 30% discretionary, expire the tax cuts, payroll cuts and have enough to pay off the debt in 183 Years![/quote]
If I’m not mistaken – CBO projections are based on current law – including the expiration of the Obama extended Bush tax cuts AND the expiration of the SS tax cut.

So two of the fixes proposed are already “baked in” to the CBO projections.

[no_such_reality]

That’s the $2.913 Trillion.

And the $3.035 Trillion is the spending post cuts.

[livinincali]

[quote=no_such_reality]CBO says expiring tax cuts is $4 Trillion over decade.

Let’s keep it simple and say it’s $400 billion. http://www.cbo.gov/sites/default/files/cbofiles/attachments/08-22-2012-Update_to_Outlook.pdf

Or let’s just look at CBO baseline revenue projection: $2.913T.

So $3.035T – $2.913T. So I’m short $120 Billion.

Fine increase cuts by 5%.

45% defense. 25%discretionary. Or would you like to quiblle over the $20Billion?

Of 40% defense and 30% discretionary. net $129 Billion gain to close the gap.

Or let’s really have fun, 50% defense, 30% discretionary, expire the tax cuts, payroll cuts and have enough to pay off the debt in 183 Years![/quote]

It’s really about $300 for 2013 and then projections of 4.3 GDP growth and an increase in the percentage of taxes paid relative to GDP. They assume 4.3 GDP growth starting in 2014 and along with revenues going from 15.7% of GDP to 21.4% GDP. Frankly it’s very optimistic. In nominal terms with higher than average inflation they might get the revenue side right this time, but in that case the spending side will be massively understated.

If you look at their 2003 projection for 2012 it was completely wrong. http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/32xx/doc3277/entirereport.pdf

Actually if their projection for 2012 in 2003 was right we would have 3.549 trillion in annual revenues right now. They we’re only off by $1 trillion or so. They did get the mandatory spending right.

[Aecetia]

We definitely need to make many changes in spending. I think maintaining the military in Germany and Japan is too costly. I am sure AFF will chime in here and tell me why I am wrong. I feel that something has to give and I would prefer the troops be used elsewhere. Here is a link to a very long essay on US “Global Leadership: “There are several alternatives to global leadership, including greater reliance on regional security organizations and the creation of spheres of influence or regional balance-of-power arrangements. The United States would then act as a balancer of last resort. Such a strategy would preserve U.S. security without the costs and risks of an unrealistic crusade to lead the world.”

http://www.cato.org/pubs/pas/pa-267.html

[Author]

Posts