Remember that Blue Ribbon panel on debt reduction that the president created earlier in the year. Well, they've made their recommendations and I must admit, they've come up with some darn good ideas.
Reducing Taxes significantly to 8 percent, 14 percent and 23 percent and getting rid of deductions
Cutting Medicare
Raising Retirement Age
Medical Tort Reform
15% cut in Congressional budget cuts
I could care less what side of the isle these ideas originally came from. They are a very good start.
I wonder what the chances of these recommendations going any further is? :D
Quote from: Gaspar on November 10, 2010, 02:38:07 PM
Remember that Blue Ribbon panel on debt reduction that the president created earlier in the year. Well, they've made their recommendations and I must admit, they've come up with some darn good ideas.
Reducing Taxes significantly to 8 percent, 14 percent and 23 percent and getting rid of deductions
Cutting Medicare
Raising Retirement Age
Medical Tort Reform
15% cut in Congressional budget cuts
I could care less what side of the isle these ideas originally came from. They are a very good start.
I wonder what the chances of these recommendations going any further is? :D
I like the list.
Cutting Medicare and medical tort reform are pretty sacred cows with the Democrats so I'm impressed they show up on the list. Certainly on raising retirement age they only intend to do that to non-union members. 8)
This panel had to employ reason and logic, therefore they must brace themselves for ridicule and repudiation. Much of this will become an anchor for the new Republican House. The administration will have to find a way to nip this in the bud quickly.
I suppose they could leak a report about Erskine smoking crack or something.
I'm trying to wrap my head around how it is that further tax cuts will reduce the deficit. Last time we tried it, it didn't work. The time before that the signals were very mixed..economic growth didn't actually happen until taxes were raised, and even then, it took savage cuts to welfare, science funding, and the military to get the deficit under control.
Edited to add: Or to put it another way, what tax increases were passed prior to January 2008 that caused us to see the first negative year-on-year GDP growth since the Great Depression?
Quote from: nathanm on November 10, 2010, 03:43:07 PM
I'm trying to wrap my head around how it is that further tax cuts will reduce the deficit. Last time we tried it, it didn't work. The time before that the signals were very mixed..economic growth didn't actually happen until taxes were raised, and even then, it took savage cuts to welfare, science funding, and the military to get the deficit under control.
I think the inference is that with a simplified tax code, more people wind up paying more in taxes even at lower rates. With higher taxes, people simply find ways to legally avoid paying them or deferring them. Get rid of loopholes and favored deductions.
That is, unless it's going back to the proven theory that when taxes were cut before, net reciepts to the treasury increased.
Quote from: Conan71 on November 10, 2010, 03:54:35 PM
I think the inference is that with a simplified tax code, more people wind up paying more in taxes even at lower rates. With higher taxes, people simply find ways to legally avoid paying them or deferring them. Get rid of loopholes and favored deductions.
That is, unless it's going back to the proven theory that when taxes were cut before, net reciepts to the treasury increased.
As I mentioned, that's not really proven at all, except in the sense that per capita income and population were both increasing, so of course tax receipts rose. The Reagan cuts didn't really do anything to the GDP growth rate or the tax receipt growth rate, but they did help balloon the deficit. I'm not saying there was no effect whatsoever, just that it's such a small effect that it's masked by the natural variations in the economic cycle.
I can understand how perhaps cutting the marginal rate and eliminating all deductions might actually increase collections.
Quote from: nathanm on November 10, 2010, 04:25:49 PM
As I mentioned, that's not really proven at all, except in the sense that per capita income and population were both increasing, so of course tax receipts rose. The Reagan cuts didn't really do anything to the GDP growth rate or the tax receipt growth rate, but they did help balloon the deficit. I'm not saying there was no effect whatsoever, just that it's such a small effect that it's masked by the natural variations in the economic cycle.
I can understand how perhaps cutting the marginal rate and eliminating all deductions might actually increase collections.
Interesting to note that the 23% top rate is the same rate as mentioned in the Fair Tax plan which is a consumption-based plan not to be confused with the "flat tax".
Here's the thing: raising or lowering taxes by the percents we've been quibbling over the last two years is little more than sound bite material, IMO. If taxes go up, there will be ways to avoid paying them. Lower them, simplify the tax code, lower compliance costs, and trim down the size of the IRS. One of the things I dislike most about Obamacare is the additional IRS employees required for compliance issues.
People like Warren Buffet can complain all they want about the tax rate they pay in public, but he's got a team of accountants who ensure he pays as little in taxes as possible when he's off the microphone.
Quote from: Conan71 on November 10, 2010, 04:36:29 PM
People like Warren Buffet can complain all they want about the tax rate they pay in public, but he's got a team of accountants who ensure he pays as little in taxes as possible when he's off the microphone.
A few people are lucky enough that the gov could take almost everything they make and they would still have more than most of us.
If I was making $100,000,000 per year and the government took 90% of it, I would still have $10,000,000. per year. I think I could learn to live on that. I would have to cut back on my lifestyle though.
;D
Quote from: Conan71 on November 10, 2010, 03:54:35 PM
I think the inference is that with a simplified tax code, more people wind up paying more in taxes even at lower rates. With higher taxes, people simply find ways to legally avoid paying them or deferring them. Get rid of loopholes and favored deductions.
That is, unless it's going back to the proven theory that when taxes were cut before, net reciepts to the treasury increased.
Bingo!
Conan, stop now. If they figure it out, they will start throwing around the word "Irresponsible" and attack their own for embracing it. They need to think it's their idea.
Let them have it.
Quote from: Red Arrow on November 10, 2010, 09:59:14 PM
A few people are lucky enough that the gov could take almost everything they make and they would still have more than most of us.
If I was making $100,000,000 per year and the government took 90% of it, I would still have $10,000,000. per year. I think I could learn to live on that. I would have to cut back on my lifestyle though.
;D
I always talk about what a pain in the donkey it must be to be that rich. I'd like to see first hand though.
Just think about it Red, you could buy a new Citation every year and have plenty of fuel money to fly it anywhere you liked. ;)
Quote from: Conan71 on November 11, 2010, 09:24:46 AM
I always talk about what a pain in the donkey it must be to be that rich. I'd like to see first hand though.
Just think about it Red, you could buy a new Citation every year and have plenty of fuel money to fly it anywhere you liked. ;)
best.biz.jet.ever.made
Especially the X. Fastest biz jet ever. At least it was a couple of years ago (0.92m at cruise).
Quote from: Hoss on November 11, 2010, 09:35:40 AM
best.biz.jet.ever.made
Especially the X. Fastest biz jet ever. At least it was a couple of years ago (0.92m at cruise).
Quit it.
(http://cdn.davesdaily.com/pictures/461-morningwood.jpg)
Back on topic, they were saying on the radio on the way in this morning that the Obama Admin is willing to consider extending the controversial Bush tax cuts. Between this and QE2, I'm seriously beginning to question if there's an intentional effort afloat to tank the dollar.
If you make 30k a year and have 11k in standard deductions and 6k in mortage deduction you can you have 43% of your income taxable. THey could cut your tax rate in half and cut the deductions and you would still get more money. The deductions at the top are even higher, but not as much of a percentage of total income.
Quote from: Conan71 on November 10, 2010, 02:40:42 PM
I like the list.
Cutting Medicare and medical tort reform are pretty sacred cows with the Democrats so I'm impressed they show up on the list. Certainly on raising retirement age they only intend to do that to non-union members. 8)
Are you serious?
"Don't cut Medicare. The reform bills passed by the House and Senate cut Medicare by approximately $500 billion. This is wrong." Newt Gingrich
You might want to rethink your medicare stance. See they just cut it, so therefore the Republican's are for medicare spending. (Actually, really they are, look at Bush's increase in Medicare spending with his "reform". It is right up there with stupid things to do EVER)
Quote from: Trogdor on November 11, 2010, 10:04:47 AM
If you make 30k a year and have 11k in standard deductions and 6k in mortage deduction you can you have 43% of your income taxable. THey could cut your tax rate in half and cut the deductions and you would still get more money. The deductions at the top are even higher, but not as much of a percentage of total income.
Not sure where you are going with that Trog. You can't take the standard deduction and take MID since you have to itemize to get the MID. You pretty much need to be making payments on about a $150,000+ mortgage or have financed at an insanely high rate to out-run the standard deduction with enough MID to make it worth itemizing.
The days of someone earning $30K per year being able to finance $150 to $200K in housing ended a couple of years ago anyhow ;D
Quote from: Trogdor on November 11, 2010, 10:08:37 AM
Are you serious?
"Don't cut Medicare. The reform bills passed by the House and Senate cut Medicare by approximately $500 billion. This is wrong." Newt Gingrich
You might want to rethink your medicare stance. See they just cut it, so therefore the Republican's are for medicare spending. (Actually, really they are, look at Bush's increase in Medicare spending with his "reform". It is right up there with stupid things to do EVER)
Let's see, Democrats wanted to gut Medicare of $500 bln to more than double-down with Obamacare. They raised the ante by $700 bln Trog. And that's the more conservative of CBO estimates.
Quote from: Conan71 on November 11, 2010, 10:13:05 AM
Not sure where you are going with that Trog. You can't take the standard deduction and take MID since you have to itemize to get the MID. You pretty much need to be making payments on about a $150,000+ mortgage or have financed at an insanely high rate to out-run the standard deduction with enough MID to make it worth itemizing.
The days of someone earning $30K per year being able to finance $150 to $200K in housing ended a couple of years ago anyhow ;D
You are right, I was adding wrong. Anyway, so 30k with 11k standard deduction so you can cut taxes by 1/3 and still be even.
Quote from: Conan71 on November 11, 2010, 10:17:02 AM
Let's see, Democrats wanted to gut Medicare of $500 bln to more than double-down with Obamacare. They raised the ante by $700 bln Trog. And that's the more conservative of CBO estimates.
Actually there are no "Cuts" to Medicare proposed. Only limitations on growth. Combined with tort reform this is a very logical move.
The proposal would cap the growth on federal spending on healthcare to a rate of economic growth plus 1%. Healthcare spending would continue to grow, but only by a factor linked to economic growth. This is paramount in avoiding the economic disaster represented by a poorly performing economy and a growing entitlement class. It's obvious that Obama's committee took some lessons from the mistakes other countries have made recently.
I am still absolutely blown away that logic and reason have taken a front seat to pander and emotion.
Quote from: Conan71 on November 11, 2010, 10:17:02 AM
Let's see, Democrats wanted to gut Medicare of $500 bln to more than double-down with Obamacare. They raised the ante by $700 bln Trog. And that's the more conservative of CBO estimates.
http://danieljmitchell.wordpress.com/2010/10/28/boehner-endorses-more-medicare-spending-meet-the-new-boss-same-as-the-old-boss/
http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=28061
Bush drug benefit 720 billion first 10 years.
Quote from: Gaspar on November 11, 2010, 10:29:41 AM
Actually there are no "Cuts" to Medicare proposed. Only limitations on growth. Combined with tort reform this is a very logical move.
The proposal would cap the growth on federal spending on healthcare to a rate of economic growth plus 1%. Healthcare spending would continue to grow, but only by a factor linked to economic growth. This is paramount in avoiding the economic disaster represented by a poorly performing economy and a growing entitlement class. It's obvious that Obama's committee took some lessons from the mistakes other countries have made recently.
I am still absolutely blown away that logic and reason have taken a front seat to pander and emotion.
Yes, it is pretty crazy. But the house and senate won't go for it. The Republican's will overwelmingly vote for these bills (up until they will actually get passed). Such is the game they play. They want as many people to look like they are for lower spending. Until it means it actually lowers spending. Then they point to democrats. (And vice versa)
Quote from: Trogdor on November 11, 2010, 10:32:29 AM
http://danieljmitchell.wordpress.com/2010/10/28/boehner-endorses-more-medicare-spending-meet-the-new-boss-same-as-the-old-boss/
http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=28061
Bush drug benefit 720 billion first 10 years.
Don't care to argue the point so you bring up a completely different issue. Makes sense to me, my ex wife did that all the time.
Quote from: Conan71 on November 11, 2010, 11:02:39 AM
Don't care to argue the point so you bring up a completely different issue. Makes sense to me, my ex wife did that all the time.
I said the Republicans were against decreasing Medicare. You bring up Obama. So I continue with Republicans not wanting to and actually increasing spending. You are te one that changed the subject to Obama. You were implying that Obama is the reason the republicans want to spend on Medicare. Just showing you it's not just this year.
Quote from: Trogdor on November 11, 2010, 11:22:51 AM
I said the Republicans were against decreasing Medicare. You bring up Obama. So I continue with Republicans not wanting to and actually increasing spending. You are te one that changed the subject to Obama. You were implying that Obama is the reason the republicans want to spend on Medicare. Just showing you it's not just this year.
[Insert favorite facepalm image here]
Let's see, this subject
IS about President Obama.
Try again, Trog and pay closer attention to what the ongoing conversation was before you jumped in with mangled figures on tax deductions and trying to use reach-around logic to steer it to Republican increases.
I pointed out I was amazed to see the committee was recommending Medicare cuts and malpractice tort reform in a topic principally about President Obama's Blue Ribbon committee. Healthcare cuts and tort reform are sacred cows to Democrats. You changed the topic around to Republicans being for spending more on Medicare.
"You might want to rethink your medicare stance.
See they just cut it, so therefore the Republican's are for medicare spending. (reach around logic alert!!!) (Actually, really they are, look at Bush's increase in Medicare spending with his "reform". It is right up there with stupid things to do EVER)"
I correctly pointed out the Democrat Medicare "cuts" are part of an overall increase in government healthcare spending.
Soo -500 + 700 for a net of +200? Or is it -500 + 1.2 trillion? I seriously think healthcare cuts are sacred cows to politicians and whoever does it will get the words healthcare and cuts regardless.
You said Medicare, I commented on Medicare. But you didn't mean medicare, you meant the entire government spending on any health program. It isn't the same thing.
And yes, Republican's just added a trillion in spending over 10 years. Of course it was just a payoff for insurance and drug companies. But yet, it is still a medicare spending increase.
Quote from: Trogdor on November 11, 2010, 12:34:40 PM
Soo -500 + 700 for a net of +200? Or is it -500 + 1.2 trillion? I seriously think healthcare cuts are sacred cows to politicians and whoever does it will get the words healthcare and cuts regardless.
You said Medicare, I commented on Medicare. But you didn't mean medicare, you meant the entire government spending on any health program. It isn't the same thing.
And yes, Republican's just added a trillion in spending over 10 years. Of course it was just a payoff for insurance and drug companies. But yet, it is still a medicare spending increase.
::)
There is a lot going on with this proposal. Overall it looks like a step in the right direction, although it really is just another typical "reduction in the rate of increase" when you look at the debt itself. This reduces the yearly deficit, so we would be adding to the overall debt at a slower rate than currently.
Source: http://finance.yahoo.com/news/Debt-commission-puts-out-cnnm-2160229896.html
"Three quarters of the $4 trillion would be achieved through spending cuts -- including defense -- and the rest from more tax revenue."
So they do plan to collect more tax revenues, doing so at lower rates, but eliminating all of the deductions for everything.
I find this pretty funny that we have built so many deductions and loopholes into this bloated tax code that we are now in a position where they can potentially raise more revenue and sell it as lowered tax rates. However silly that sounds, I really like the idea of simplified tax code. Giving breaks and deductions for specific things allows politicians to engage in social engineering and sweetheart deals for political allies and lobbyists. Get rid of that, and you've eliminated an opportunity for corruption. Bring it.
"Change Social Security: The report aims to make Social Security solvent over 75 years through a number of measures, including smaller benefits for wealthier recipients, a less generous cost-of-living adjustment for benefits, and a very slow rise in the retirement age (from 67 to 68 by 2050; rising to 69 by 2075). It also would expand over 40 years the amount of workers' income subject to the payroll tax."
Payroll tax is going up. What really gets my attention though, is the "less generous COLA". Think about what the Federal Reserve's current monetary policy is. They call it "Quantitative Easing", what they are doing is inflating the currency. What happens if they cap the COLA while pushing inflation as the method to pay off our debt? Does Social Security essentially get wiped out of relevancy without being overtly eliminated?
So, what about defense cuts?
"Among the proposed defense cuts: Freeze noncombat military pay at 2011 levels for three years to save $9.2 billion and reduce overseas bases by one-third to save $8.5 billion. It would also direct $28 billion in cuts already proposed by Defense Secretary Robert Gates toward deficit reduction."
I'm not sure which of those numbers amount to cuts at a yearly rate, 3-year savings, or savings for the entire decade plan, but keep in mind we are spending around $1 trillion a year on defense. I am completely unimpressed by those cuts.
This is where I think the line is drawn between real fiscal conservatives and phony conservatives. Who is willing to make significant cuts to our trillion dollar world empire? What is conservative about spending a trillion dollars? We're broke. Maybe think about reigning that in a bit?
QuoteI find this pretty funny that we have built so many deductions and loopholes into this bloated tax code that we are now in a position where they can potentially raise more revenue and sell it as lowered tax rates. However silly that sounds, I really like the idea of simplified tax code. Giving breaks and deductions for specific things allows politicians to engage in social engineering and sweetheart deals for political allies and lobbyists. Get rid of that, and you've eliminated an opportunity for corruption. Bring it.
+1
QuoteWe're broke. Maybe think about reigning that in a bit?
+1
I love it when everyone starts making sense. Now we just need to wait and see if our President is willing to embrace the recommendations of the experts he appointed, or dismiss them.
The timing of the release of these recommendations was remarkable.
Quote from: YoungTulsan on November 11, 2010, 03:03:20 PM
"Among the proposed defense cuts: Freeze noncombat military pay at 2011 levels for three years to save $9.2 billion and reduce overseas bases by one-third to save $8.5 billion. It would also direct $28 billion in cuts already proposed by Defense Secretary Robert Gates toward deficit reduction."
Yeah, that's one of those items I'd
almost join the chorus in saying: "But it's
only $8.5 bln!"
Great post, BTW.
Quote from: Gaspar on November 11, 2010, 03:52:33 PM
+1
+1
I love it when everyone starts making sense. Now we just need to wait and see if our President is willing to embrace the recommendations of the experts he appointed, or dismiss them.
The timing of the release of these recommendations was remarkable.
I'm just anxious to see how serious everyone really is about cutting spending in D.C. All this chatter from Sens. Inhofe and McConnell has me a bit skeptical. Have they forgotten the reason they were knocked out of power in 2006 already?
Quote from: Gaspar on November 11, 2010, 03:52:33 PM
+1
+1
I love it when everyone starts making sense. Now we just need to wait and see if our President is willing to embrace the recommendations of the experts he appointed, or dismiss them.
The timing of the release of these recommendations was remarkable.
They're actually not the actual recommendations of the panel. They're draft suggestions by Bowles and Simpson only, which is what makes this even more newsworthy. They're unofficial negotiation points "leaked" directly to reporters by the heads of the panel. Nothing's been finalized at this point and some of the members of the panel have actually come out strongly against some of the suggestions.