zraver

because the states failed to provide equitable education.

dalem

And why is that the Federal govt's business?

-dale

kmchugh

I agree with most, our government must cut spending. The government must go back to it's primary purpose, which is the provision of the common defense. That clearly means we cannot cut defense spending. To do so is to commit a constitutional violation of the first order.

I suggest that another area we could look at would be foreign spending, particularly foreign aid. Certain rules should be strictly applied, as follows:

1. If your government is hostile to the US, no bucks.
2. If your government provides safe haven for those who would seek to harm the US, no aid.
3. If your government provides any type of aid or funding for persons, groups, or people who seek to harm us, the money faucet is off.
4. If your government does not support the sovereignty of the US, or worse actively encourages violations of US sovereignty, look elsewhere for money.

These are just off the top of my head, and I’m sure others can add to the list. At first, it might be difficult, but in the end, we have to stop supporting those who seek to undermine our nation. #1 is obvious. #2 might piss off some of our erstwhile “allies,” but would in the end provide for greater US security (which, as I pointed out above, is the primary purpose of the federal government). #4 would certainly get Mexico’s attention, don’t your think?

KM

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If you didn't pay any taxes, it's not a rebate. It's welfare.

gunnut

Not sure if and when the states failed in education. But the federal government started expanding after personal income tax was levied in the early 20th century. Government CANNOT run a surplus. If it did, that means tax rates are too high and people will demand the money be returned. Therefore politicians think of schemes to spend every single last cent, and then some, to justify the tax rate.

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"Only Nixon can go to China." -- Old Vulcan proverb.

Wraith601

Actually we could halve our military budget and still be pretty much immune from conventional attack the rest of th world combined could htrow at us. What we would lose is out ability to project power to protect our allies and interests overseas. I'm by no means isolationist (I don't think for a second that if we pull all our troops out of the Middle East Osama and his ilk will simple move and ignore us, they will come after us here, after they destroy Israel andthing reembling a moderate in the region), but I'm sure we have troops in plenty places we could afford to pull them out of. Plus kill a few programs like the Osprey and FCS, close a lot of out redundant bases, and start holding defense contractors more accountable for cost control, if they tried plyed their shoddy crap to private sector customers they'd all be belly up by now.

I see no reason why the US couldn't cut the military budget to $375 billion or so withour hampering our effectiveness too much.

Back on topic I support lower taxes and spending at all levels of government.

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"We always have been, we are, and I hope that we always shall be, detested in France."
-Sir Arthur Wellesley

Shek

Tax revenues always decrease in the short run after tax cuts.

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"So little pains do the vulgar take in the investigation of truth, accepting readily the first story that comes to hand." Thucydides 1.20.3

dalem

Yeah, but whose limiting us to short-term?

-dale

Shek

Sorry, forgot to add that they don't pay for themselves in the long-run, either.

dalem

I thought tax cuts (of a certain kind and to a certain point) lead to economic growth, which makes the pie being taxed bigger.

-dale

Bluesman

I must be reading you wrong, here. Because almost every single time taxes have been cut, following a VERY modest decrease in revenue, economic activity has increased and the tax cut not only covers itself in short order, but revenues INCREASE.

You have really got me concerned that everything I thought was accepted by even the class-warrior types that seek to soak the wealthy agree that tax-cutting leads to more robust economic activity, and therefore an increase in revenue.

Are you making an arcane point that's getting past us, or do I read you as saying that there is a straight correllation of increases in taxation and increases in revenue?

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"The quickest way of ending a war is to lose it, and if one finds the prospect of a long war intolerable, it is natural to disbelieve in the possibility of victory."
- George Orwell

Shek

Tax cuts have increased growth. However, the problem with simply looking at tax revenues is that you conflate what's going on behind the scenes. Let's look at tax revenues from 2000 and beyond as an example.

2000 2,025.5
2001 1,991.4
2002 1,853.4
2003 1,782.5
2004 1,880.3
2005 2,153.9
2006 2,407.3
2007 2,567.7

As the argument goes, tax revenues create incentives for additional growth (agreed, and it also reduces the incentive to shelter income), which increases the pie (agreed), increases tax revenues compared to prior to the tax cut after people fully respond to the new incentives (agreed), and so they pay for themselves (disagree).

The "pay for themselves" argument requires that every single percentage point of growth HAS to be attributed to the change in behavior due to the tax cut. In other words, the counterfactual would be that if there weren't a tax cut, then there would have been no growth in the economy. In other words, to figure out the impact of the tax cut, you have to isolate growth that is due to the incentives change of the tax cut from growth that would have occured otherwise.

Only once you have done that can you answer the question "do tax cuts pay for themselves?". Here's a paper description by former Chairman of the Council of Economic Advisors for Bush 43, Greg Mankiw, who supported the tax cuts but not because they would pay for themselves. His conclusion was that in the long-run, capital gains tax cuts in the long-run would reduce revenue only by 50%, while tax revenues would increase by only $0.17 for every dollar cut on income taxes in the long-run.

Ironduke

Shek, how did tax revenues increase $700 billion from 2004-2007?

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The Buck Stops Here

Bluesman

I followed that, but is it NOT a positive correllation when each and every single time taxes are cut (and in particular, excessively-high marginal rates), that you get an effect that is almost NEVER seen pre-cut? in other words, a moribund and sluggish revenue growth ALWAYS shows a significant expansion post-cut, BUT growth due to other factors can be seen and accounted for and remain uncorrellated for the period during which no tax cut occurred?

I dunno, you're the doctor, here, but I was under the distinct impression that Sorry, forgot to add that they don't pay for themselves in the long-run, either was 180-out from the way lower tax rates were supposed to work, even allowing for other factors.

Bluesman

Also, would it not be the correllary that deccrease in rates DECREASE revenue? I mean, that's almost explicitly stated, right, when you say that tax cuts do NOT 'pay for themselves'.

So, if we increase tax rates, we'll see that same percentage increase in revenue? I'm not sure if there are many examples of that, but I admit I could be wrong. If I am wrong, there ya go: solve the deficit by figuring out how much revenue we'll be under expenditure, jack up the rate to cover it, and bingo!, deficit disappears, with no bad effects on the economy.

Gonna have to sell me on that one.

kmchugh

Me too. Jack the rate up and the effect on the economy is chilling. People with less discretionary income, less spending, possibly a rise in loan defaults... can't see that being good for the economy.