Obama calls for increase in Federal Gas Tax

[Dr.Who]

There are several ways it could be done. We could simply keep the same brackets we have now, not adjusted for inflation,

Then the revenue would not be higher than now.

we could have a surtax

How would that not just be a raise in rates? Which we have already agreed does not result in higher revenue.

, we could include all income as taxable at the same rates,

So the first dollar a person earns is taxed at the same rate as the last dollar. Would that be a flat tax? Would it be the highest rate or the lowest or somewhere in the middle? And do you know what effect that would have on productivity?

eliminate some of the deductions,

That has been tried and it did not result in higher revenues.

or we could simply go back to the pre "Bush tax cuts" rates.

That also did not result in higher revenues.

The bottom line is that thinking we can balance the budget simply by spending cuts alone is wishful thinking. We are going to have to either impose both tax increases and spending cuts, or see the dollar be devalued. Either way, the debt will decrease.

I have yet to see a solid proposal to increase revenues so the only option yet is to reduce spending.

But I would add that if I did see a solid proposal to increase revenues I think that the level of taxation is already too high and burdensome - I would not support it except perhaps as temporary. Just as I would not support devaluing the dollar.

 

[Dr.Who]

Eliminate a few govt agencies like the EPA and the Dept of Education would be a good start. Drill our own oil. Freeze got wages and order govt cuts in pensions and budgets. That's a good start. No tax increases.

Drill our own oil? If we did that we would have to hire lots of people, probably a million over a few years and what would that do to the unemployment rate? And we would reduce our dependence on oil from countries that hate us and are using that money against us. And we would have less of a need to intervene in world affairs. And gas prices would drop by leaps and bounds. And think about what that would do to the whole economy. No, I don't think we could do that

 

[Alias]

Drill our own oil? If we did that we would have to hire lots of people, probably a million over a few years and what would that do to the unemployment rate? And we would reduce our dependence on oil from countries that hate us and are using that money against us. And we would have less of a need to intervene in world affairs. And gas prices would drop by leaps and bounds. And think about what that would do to the whole economy. No, I don't think we could do that

Of course not. Then we wouldn't have any use for liberals and they know that.

 

[GenSeneca]

Then we wouldn't have any use for liberals and they know that.

What use do you have for them now?

 

[Alias]

What use do you have for them now?

LOL......come to think of it......none. I think they should have to get real jobs and pay taxes like eveyone else on what they EARN. They're parasites as far as I can see.

 

[PLC1]

Then clearly we can dispense now and forever with any discussion of raising just the top marginal tax rates and instead focus on raising taxes in general.

How would you raise taxes in a way that would raise revenue?

The top marginal tax rate is simply one of many factors. No, raising them doesn't necessarily result in more revenues.

but if you raise taxes, the government has a greater percentage of the GDP. If you collect a greater percentage of the GDP, then you have a greater percentage of the GDP.

We could go back to the tax rates that prevailed before the "Bush cuts". Unless something else has changed, that should result in greater revenues. We could tax all income at the same rate, regardless of source. There are several ways revenue could be increased.

What we can't do is balance the budget by tax increases alone, just as we can't do it by spending cuts alone. It will take both.

 

[GenSeneca]

We could go back to the tax rates that prevailed before the "Bush cuts". Unless something else has changed, that should result in greater revenues.

According to what? Need I remind you that revenue remained at 17.5% AFTER the tax rate increase under Clinton and that revenue as a % of GDP didn't begin to rise until AFTER the tech bubble began to inflate the economy?

Do you really think it's purely coincidence that our highest revenue as a % of GDP happens during times of economic booms and are at their lowest levels during economic slumps?

What we can't do is balance the budget by tax increases alone, just as we can't do it by spending cuts alone. It will take both.

Why can't we balance the budget on spending cuts alone? Since raising tax rates isn't shown to increase revenue as a % of GDP, it's wishful thinking to believe we can simply raise tax rates to increase revenue as a share of GDP.

 

[Dr.Who]

The top marginal tax rate is simply one of many factors. No, raising them doesn't necessarily result in more revenues.

but if you raise taxes, the government has a greater percentage of the GDP. If you collect a greater percentage of the GDP, then you have a greater percentage of the GDP.

(I think you just missed something when making this post but I will answer it again. This look largely to be a cut and paste of a post I already responded to. I know I have a lot of trouble with the site keeping track of where I am in the conversation.)


Raising taxes by raising the top marginal rate has not proven to result in a greater percentage of GDP. so just which tax would you raise to get a greater percentage of GDP?

We could go back to the tax rates that prevailed before the "Bush cuts". Unless something else has changed, that should result in greater revenues. We could tax all income at the same rate, regardless of source. There are several ways revenue could be increased.

It did not result in much greater revenues then so why should we expect them to result in greater revenues now (as a percent of GDP)?

What we can't do is balance the budget by tax increases alone, just as we can't do it by spending cuts alone. It will take both.

I agree that it will require both cuts and increased revenue. I have yet to see a plan for increased taxes that will result in increased revenue. I take it back: Gensenica's plan of waiting for the booms will result in greater revenues on average.

 

[PLC1]

Fact: Federal revenues was nearly 21% of the GDP before the "Bush tax cuts" took effect.

Fact: Now, federal revenue is about 16% of the GDP.

Opinion: Cutting taxes has resulted in less federal revenue as a percent of GDP.

Opinion: Cutting taxes without cutting spending results in deficits.

Fact: Taxes were cut under President Reagan.
Fact: Spending did not go down during that time, but increased.
Fact: Despite economic boom times, and despite an increase in federal revenues due to that increase in economy, the government borrowed money to survive.

Opinion: cutting taxes without cutting spending results in deficits.

Opinion: the idea tax increases have no effect is false, and based on wishful thinking.

Fact: We currently have a debt that is beginning to surpass the entire GDP.

Opinion: In order to address that mountain of debt, we will have to both cut spending and increase taxes, at least in the short term.

Fact: The most the current Congress has suggested cutting in spending is $4 trillion over 10 years, or $400 billion.

Fact: Cutting 400 billion when the deficit is 1,500 billion is not going to balance the budget.

Opinion: We have to cut further, and we have to raise revenues.

Unless, that is, we can actually cut more than 1.5 teradollars out of the federal budget.

 

[Dr.Who]

Fact: Federal revenues was nearly 21% of the GDP before the "Bush tax cuts" took effect.

Fact: Now, federal revenue is about 16% of the GDP.

Opinion: Cutting taxes has resulted in less federal revenue as a percent of GDP.

Opinion: Cutting taxes without cutting spending results in deficits.

Fact: Taxes were cut under President Reagan.
Fact: Spending did not go down during that time, but increased.
Fact: Despite economic boom times, and despite an increase in federal revenues due to that increase in economy, the government borrowed money to survive.

Opinion: cutting taxes without cutting spending results in deficits.

Opinion: the idea tax increases have no effect is false, and based on wishful thinking.

Fact: We currently have a debt that is beginning to surpass the entire GDP.

Opinion: In order to address that mountain of debt, we will have to both cut spending and increase taxes, at least in the short term.

Fact: The most the current Congress has suggested cutting in spending is $4 trillion over 10 years, or $400 billion.

Fact: Cutting 400 billion when the deficit is 1,500 billion is not going to balance the budget.

Opinion: We have to cut further, and we have to raise revenues.

Unless, that is, we can actually cut more than 1.5 teradollars out of the federal budget.

That was bravely honest and correct to label most of that as opinion.

An alternative opinion is that for each of those examples there exist a counter -example.

Therefore:

Fact:: revenue always fluctuates between about 16% and 21%
Fact: there is not a demonstrated correlation between these levels and any tax plan
Opinion: no matter what past plan we try the taxes will always very between 16 and 21%.

 

[GenSeneca]

Fact: PLC has cherry picked facts that support his opinion.
Fact: The facts PLC has ignored directly contradict his opinion.
Opinion: It simply isn't possible to generate the 1.1 trillion dollars in additional revenue that's necessary to balance the budget.

 

[PLC1]

Fact: PLC has cherry picked facts that support his opinion.
Fact: The facts PLC has ignored directly contradict his opinion.
Opinion: It simply isn't possible to generate the 1.1 trillion dollars in additional revenue that's necessary to balance the budget.

All three are opinions.

I agree with the last opinion, as there are facts to back it up. The so called "supercongress" is going to have to come up with more than 400 B in cuts.

But, again IMO, they aren't going to be able to come up with the entire 1.5 trillion however hard they try. Let's see if they prove that opinion wrong.

 

[GenSeneca]

All three are opinions.

That statement is an opinion.

Fact: Federal revenues was nearly 21% of the GDP before the "Bush tax cuts" took effect.

Fact: Now, federal revenue is about 16% of the GDP.

Opinion: Cutting taxes has resulted in less federal revenue as a percent of GDP.

You cherry picked those two facts because they support your opinion... Allow me to demonstrate by cherry picking two data points that support the inverse of your opinion...

Fact: The first year of Clinton's higher tax rates revenue was 17.5% of GDP.

Fact: The first year of Bush's lower tax rates revenue was 19.5% of GDP.

Opinion: Lowering tax rates resulted in revenue being a higher % of GDP.

That opinion, like yours, is only supportable when you ignore all the other facts.

Here are a couple more facts that don't support your opinion...

Fact: The year before the higher tax rates into effect revenue was 17.5% of GDP.

Fact: The year higher tax rates went into effect revenue was still 17.5% of GDP.

Why didn't higher rates result in revenue being a larger % of GDP?

 

[GenSeneca]

The so called "supercongress" is going to have to come up with more than 400 B in cuts.

There haven't been any real cuts. That $400 billion in "cuts" is actually a reduction of proposed spending from 12% to 11%. That means for each % point we reduce proposed spending increases, we save $400 billion. Therefore, if we limit the increase in spending to just 9%, we save $1.6 trillion. That would not only eliminate the deficit, it would also create a surplus.

I understand your point that it's not politically realistic to believe the growth of our federal budget could be limited to a mere 9% a year. But it's also not realistic to believe hiking tax rates will result in revenue being a larger % of GDP.

 

[PLC1]

That statement is an opinion.

It was an observation.

You cherry picked those two facts because they support your opinion... Allow me to demonstrate by cherry picking two data points that support the inverse of your opinion...

Fact: The first year of Clinton's higher tax rates revenue was 17.5% of GDP.

Fact: The first year of Bush's lower tax rates revenue was 19.5% of GDP.

Opinion: Lowering tax rates resulted in revenue being a higher % of GDP.

That opinion, like yours, is only supportable when you ignore all the other facts.

Here are a couple more facts that don't support your opinion...

Fact: The year before the higher tax rates into effect revenue was 17.5% of GDP.

Fact: The year higher tax rates went into effect revenue was still 17.5% of GDP.

Why didn't higher rates result in revenue being a larger % of GDP?

At least now, you're posting facts that support your opinion, just as I did.

You've also posted an opinion that there has to be a 100% correlation in order to show causation. The obvious conclusion is that you think that a less than 100% correlation is just a coincidence.

However, there is a lag time between raising taxes and increasing the percentage that goes to the government. Moreover, raising tax rates does not necessarily raise taxes, as there are many factors that determine just what the actual percentage of income that has to be paid in taxes.