Deficit/Debt Discussion Thread

[Drake Tungsten]

Read the report.

[Kidlicious]

Read the report.

We love to read this kind of thing.

[Drake Tungsten]

There's a good article on the U.S. budget deficit/national debt in the Spring 2010 issue of National Affairs...

America in the Red

[Drake Tungsten]

3. Higher taxes could eliminate the federal deficit.

Washington spends more than it takes in through tax revenues, resulting in a projected budget deficit of almost $1.35 trillion in 2010, or 9 percent of GDP, according to the Congressional Budget Office. Couldn't we get rid of the deficit by raising taxes?

No. A study we conducted at the Tax Policy Center found that Washington would have to raise taxes by almost 40 percent to reduce -- not eliminate, just reduce -- the deficit to 3 percent of our GDP, the 2015 goal the Obama administration set in its 2011 budget. That tax boost would mean the lowest income tax rate would jump from 10 to nearly 14 percent, and the top rate from 35 to 48 percent.

What if we raised taxes only on families with couples making more than $250,000 a year and on individuals making more than $200,000? The top two income tax rates would have to more than double, with the top rate hitting almost 77 percent, to get the deficit down to 3 percent of GDP. Such dramatic tax increases are politically untenable and still wouldn't come close to eliminating the deficit.

5 Myths about your taxes

[Jon Miller]

I know that US already pays a large share of taxes, but you do know that before Reagan we payed far higher percentage. Saying that it is impossible or that the economy can't work at high tax rates is wrong.

Politically untenable it might be.

JM

[Jon Miller]

As an example, from WW2 until Reagan, the tax rate at the top was never below 70%.

JM

[Kuciwalker]

At 70% the deadweight loss has got to be pretty huge.

[Drake Tungsten]

http://www.cbo.gov/budget/budget.cfm

[Hauldren Collider]

Why cut defense when you can cut actively harmful programs? Medicaid . Medicare . Phasing out social security .

[Kuciwalker]

That's an interesting definition of "actively harmful".

[Hauldren Collider]

Sorry I should have been more clear.

First, actively harmful=actively harmful to the US. Second, I've read a lot of evidence suggesting that a lot of social welfare programs actually make problems worse, like subsidies for single mothers and farm subsidies. And FICA certainly doesn't help the economy.

[KrazyHorse]

That's a lot of assertions for a single post.

[Hauldren Collider]

Perhaps. It's not like I wouldn't change my mind given a good counterargument.

[Kuciwalker]

First, actively harmful=actively harmful to the US.

That was obvious.

[MikeH]

So your definition of harmful to the US is not the same as harmful to US citizens. Interesting.