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Political “Math”

By JLP | February 17, 2011

Last week I was part of a rather heated discussion on facebook about Texas’ budget woes and proposed cuts to its education budget. One of the people involved in the discussion was a school adminstrator. I asked him how he would solve the supposed education cuts. He wrote this:

“A .01% increase in taxes would prevent all this. That’s $150 a year on a $150,000 house.”

.01% increase in taxes…

Seems really low, doesn’t it? It’s not. Here is how it translates into taxes:

My house is worth roughly $150,000 on the tax rolls. We paid $3,500 in property taxes last year. If they were to increase another $150, it would represent a 4.3% increase as I show in my math:

150 ÷ 3,500 = .0428 or 4.3%

The reason for the difference is that the .01% increase is PER $100 of value.

Politicians framed this issue in such a way to make it seem like the tax increase isn’t that much when in fact it’s MUCH more than they make it seem.

The guy got rather testy with me when I told him that I would not be willing to fork over another $150 per year. My reasoning is that although it’s “only” $150, it’s a tax increase. Once taxes go up (especially property taxes), they seldom if ever come back down again. Once this particular budget shortfall is cured by a tax increase, they’ll find another place to use the tax increase. Not only that, the $150 is based on property value, which will most likely increase in the future.

Topics: Financial Math Basics, Politics | 41 Comments »


41 Responses to “Political “Math””

  1. Evan Says:
    February 17th, 2011 at 2:22 pm

    I think the fight is because teachers and school admins don’t actually live in the real economic world:

    http://www.myjourneytomillions.com/articles/teachers-anger/

    65 comments and mostly angry ones aimed at me!

  2. Jon Says:
    February 17th, 2011 at 2:57 pm

    It would be interesting to see how this would roll out in a free market. When it’s your paycheck/livelihood you have a very strong incentive to plead for the government to increase what other people pay into the system. Those that only lose $150 per year don’t have as strong of an incentive to fight against a rise in taxes. This makes it extremely difficult to keep taxes down. Hence the reason the gunvernment school system needs to be abolished. We don’t trust the gunverment to run our churches neither should we trust them to raise our children.

    AZ had a 1% sales tax increase recently “for the children”. Now I pay 10% taxes if I go to a local store. Crazy high.

  3. Bill Says:
    February 17th, 2011 at 3:33 pm

    Hey JLP,

    I think it’s time for you and me and all your readers to put up or just shut about our taxes.

    I think you and your readers should come up with just one solution each on how to LOWER NOT RAISE TAXES.

    We will compile the best ideas and bring those to our congressman or newspaper and demand we be heard.

    My federal idea is to stop these fly-overs at all major sporting and entertainment events. On the Dan Patrick Show he said the fly-over from West Virginia to Dallas for the Super Bowl that involved 4 F-18’s cost $400,000! The Air Force denied this and said it cost $100,000. Think of all the money we will save by elimating these fly-overs. They last only a second and you can just video-tape one fly-over and then use it on the big-screen where it will look better anyway.

    On the state level, we can save my tax dollars by not wasting water by watering the free-ways. The state of CA just built a new freeway by me and instead of using a mixture of rocks (which we have billions)and drought resistent plants, they keep planting ice plant which needs tons of water and maintenance.

    JLP, just give me one good idea from you on how to lower our taxes. I’ve given you mine.

  4. Leland Says:
    February 17th, 2011 at 4:09 pm

    I’m so conflicted on this issue. I see your point about taxes staying on the books. However, in my state there is no surplus for us to draw on in the case of a recession. After they shave off all the extra curricular activities and library aides, it only leaves teacher layoffs.
    Unfortunately, in my opinion,it is the good teachers they layoff first. The younger ones are the product of better education programs in college. I hate to see them go.
    I also have to ask myself how many children per class am I willing to accept before I accept the necessity of a tax increase. It’s nice to spread out the tax burden when employment and home ownership levels are high. But 30+ students per class is not what I want for my child. (or anyone else’s)
    I think I would pay the extra $13 a month.

  5. hal p Says:
    February 17th, 2011 at 4:17 pm

    Completely right JLP. I don’t trust the Republicans in Austin to do anything right.

  6. Sid Says:
    February 17th, 2011 at 4:30 pm

    I think, in the end, tax payers need to decide how much they are willing to pay to get good schools. I would like to point out an op-ed piece by Barbara Bush

    http://www.chron.com/disp/story.mpl/editorial/outlook/7414727.html

  7. BG Says:
    February 17th, 2011 at 4:57 pm

    Tax me and spend the money efficiently, or don’t tax me at all — that is my opinion.

    I see a TON!!! of waste in my Texas school district. Let me count the ways.

    First off, Texas is plain retarded, when it comes to schools (much less building codes, etc). There are hundreds of “independent” school districts in the state of Texas — each with their own Administrative BLOAT (Wiki search: “List of school districts in Texas”).

    Secondly, they are (or were) building new schools at a crazy rate, and then not filling them. For example, if a new high-school is built, the first year it is open it only has 9th graders in it. The second year it only has 9th and 10th graders in it, etc, etc.

    We have TWO high-school in our district that were ‘under-filled’ for the past 3 years in this fashion.

    Thirdly: Football Stadiums. High school football stadiums in Texas are at the same level (or better) than College football stadiums. I’m talking about $60 million dollar high-school football stadiums folks.

    Forth: my daughter takes a bus 10 miles to her school — she passes two closer schools to get to hers which is further away. Complete waste of Diesel fuel. Idiotic.

    Fifth: I’m tired of going on, but the list is endless.

    However, Teachers (the grunts) should not be getting fired/laid off. Take out the administrative bloat before laying into the teachers.

  8. Beeg Says:
    February 17th, 2011 at 4:57 pm

    Hey Bill,
    I’ve got lots of ideas. Here are a few…
    +Cut Medicare & Medicaid Benefits – Raise requirement ages
    +Cut Social Security Benefits – Raise ages, cap funding
    +Don’t index entitlements with the CPI
    +Elminate public schools
    +Reduce “defense” spending
    +Elminate tax funding for colleges

    I could keep going would you like me to?

    I am not a big believer in the Tea Party movement either. Until we start reducing entitlement programs, we are not getting serious about the debt problems in this country.

    We just put in all of these change agents in Congress. And the best the two sides can come up with so far is a $100 billion reduction in spending. That’s like telling you, your company is reducing your paycheck by 40% and you need to cut your internal spending to stay whole by the same amount. You then propose to your family that you will this year cut spending by the equivalent of your cable bill (less than 3%).

    This is a joke. The system is bankrupt. We are going to cut spending either by force or voluntarily. The Federal Reserve will at some point (before hyper inflation hits) quit bailing out the US treasury. At that point Congress will have two options #1 take over the monetary policy and create hyperinflation – think Zimbabwe #2 leave the Federal Reserve, cut spending and force the US economy into Great Depression #2.

    This may take a little while to percolate, but it is coming.

  9. Jon Says:
    February 17th, 2011 at 7:07 pm

    Bill,

    Here’s my solution (and others too), eliminate “the state”. Problem solved.

    Read mises.org if you want all the details and theory. If you don’t wish to eliminate “the state” then Cato Institute has a ton of ideas too for minarchial government. Here in AZ we have the Goldwater Institute.

  10. Yana Says:
    February 17th, 2011 at 9:18 pm

    Just checking in to say I completely agree with you, JLP.

  11. RA Says:
    February 17th, 2011 at 11:12 pm

    If you want to straighten out the Texas school budget, start cutting funds for the high school football team. It will get straightened out real quick.

  12. JLP Says:
    February 17th, 2011 at 11:19 pm

    Hal,

    Cute. I’m sure you know that’s not what I’m talking about.

  13. BG Says:
    February 18th, 2011 at 12:42 am

    #8 Beeg) I’ll give up my social security ‘entitlements’, as long as all the government employees give up their pensions: deal?

  14. Ketan Says:
    February 18th, 2011 at 3:47 am

    That’s .1%, not 0.01%. It seems small either way, but just to be correct.

  15. hal p Says:
    February 18th, 2011 at 10:27 am

    JLP,

    You’re talking to a proud Texan going on 40 years. I’m with you. They take your money and never give it back. The moment Rick Perry and the goons in Austin stop spending millions of dollars for a “security detail” and “abstinence education”, I will consider the POSSIBILITY that they are worthy of my tax money. The tax situation is really untenable here. The franchise tax is an incredibly awful burden on my business (which is one that operates in multiple states). Lying scumbags.

    I’m not willing to give up my hard earned money so that Governor Perry can feel “cool” with his own secret service.

  16. Courtney Says:
    February 18th, 2011 at 10:40 am

    They’re talking about the difference between the actual increase in the tax rate percentage and the proportional increase in the tax, and this often gets spun one way or another for political purposes. I remember seeing a news bit on a certain TV channel about a “52% increase in medicare taxes OMG BIG GOVERNMENT!!!11!” There was a proposal to make medicare solvent by increasing the rate from 1.45% to 2.2% – while it’s mathematically correct to say that the tax rate is going up (proportionally) by 52%, it’s clearly done so with the intent of making the increase sound much larger than it actually is (an increase of 0.75% in the actual rate). Same thing here, but in reverse – they are talking about the ‘minuscule’ increase in the tax rate and you point out that the actual tax paid is nearly 5% more than you’re currently paying.

    They’re both mathematically correct statements, but you can always pick which one casts your opinion in a better light.

  17. BG Says:
    February 18th, 2011 at 11:58 am

    Courtney said: “They’re both mathematically correct statements, but you can always pick which one casts your opinion in a better light.”

    absolutely agree — and this happens all the time. Once people start to _think_ for themselves, and stop rattling off ‘talking-points’ we will stay highly politicized and divided.

    BTW: I can’t wait until January 2012, when people start complaining about the 48% increase in social security taxes once the payroll tax holiday expires and goes back to 2010 levels, which was only a 2% decrease in 2011 from 2010 — lol.

  18. Manny Says:
    February 18th, 2011 at 12:44 pm

    I’m tired of the all the smoke & non-sense.

    We have to reduce our debt not just balance the budget. Actually SS is not that hard a fix, just raise the cap on taxable earnings. Leave the retirement age alone, it’s hard enough to get a job after 50, let alone later.

    Medicia/ Medicare is much tougher & will require some sort of cap on COL.

    Military spending has to be reduced period. This is a major expense that can not be sustained.

    Since govt. officials let it happen to industry, they should receive the same treatment. Convert all fed/ state/ town pensions (including senators/ congressmen/etc.) to cash value plans. Plenty of us got screwed late in our careers, time to spread the pain. They can pay for 50% of their medical too. If they want to strike, go ahead & let them. There are plenty of unemployed managers & executives ready & able to do their jobs. I mean senators/ congressman (& white house) have had 38 years to come up with an energy policy to reduce our dependence in oil from countries intent on our destruction. Their failure in this regard alone is inexcusable.

    Enforce the laws, close the borders & crack down on illegal immigration & the companies/ people who hire them.

    Impose taxes on firms that hire H1B visa folks.
    Give tax credits for firms that hire permanent employees in the USA & impose special taxes on firms that hire offshore/ outsource.

    Full campaign reform. No political contributions are to be allowed & would be illegal. No lobbying period – also illegal. No tax deductions for illegal contributions.

    Reintroduce the Glass-Stegall act.

    The list goes on…

    From my experience once a tax is put in place it will never be repealed & will only go up in the future. Politicians are not in office to serve us,they are in office to become wealthier than they already are.

  19. JLP Says:
    February 18th, 2011 at 12:56 pm

    Manny,

    I’m going to take a wild guess and say that you don’t currently max out your social security contribution each year. Am I right?

  20. BG Says:
    February 18th, 2011 at 3:05 pm

    JLP) What difference does it make? You want to tax the ‘little-man’ even more to make up for the shortfall?

    The budget _WAS_ balanced in 2000 — it doesn’t take a rocket scientist to figure out why it is no longer balanced:

    1) massive tax breaks for the rich. Sure the ‘little’ guy got a tiny piece, but the vast majority of cuts went to the top 1%

    2) unfunded wars. Fighting two wars for 10 ten years and not a single penny in new taxes to fund them.

    3) medicare-part D — it was the death nail for medicare.

    4) and brand new for 2011, the ‘payroll tax holiday’ — finally making Social Security under-funded. First time in history SS was underfunded and going to run a yearly deficit of itself — it had always generated surpluses.

    My guess is that 90-95% of the debt since 2000 is related to those causes. The fix? Revert all four of those changes back to year 2000 levels. for the wars, this wold require an immediate withdrawal, or a new tax to fund the wars.

  21. JLP Says:
    February 18th, 2011 at 4:09 pm

    BG,

    Explain to me how not lifting the cap on wages subject to social security withholding makes the “little man” make up more of the shortfall?

    I seriously doubt the budget was balanced in 2000. Even if it was, it was balanced on a bubble.

    “Massive tax breaks for the rich” Give me a break. You clearly do not understand percentages. We’ve been over this so many times that I don’t have the energy to talk about it today.

    Medicare – Part D…you’re right about that.

  22. BG Says:
    February 18th, 2011 at 5:26 pm

    “Explain to me how not lifting the cap on wages subject to social security withholding makes the “little man” make up more of the shortfall?”

    If you don’t lift the cap, then where is the money going to come from? Increasing the tax rate on the money below the cap is the alternative, and I view that as a highly regressive tax move (taxing the little man).

    “I seriously doubt the budget was balanced in 2000. Even if it was, it was balanced on a bubble.”

    Anyone who wants to argue that 2000’s budget wasn’t balanced (compared to today’s budget) obviously has an issue with percentages.

    ““Massive tax breaks for the rich” Give me a break. You clearly do not understand percentages.”

    Are you claiming that $5million tax-free estate transfers, and other such schemes affect all earners equally? — I would call that a tax-break created for the rich, by the rich. How about where in 2000, dividend-income was taxed just like ordinary income, but now it is flat-taxed at 15%. And you have multi-billionaire CEOs ensuring ALL of their income is in the form of dividends instead of wages to take full advantage of this tax-break. Hell, I pay a higher tax-rate on my last dollar than CEOs pay on their last dollar!

    Yes, the rich received MASSIVE tax breaks — tax breaks tailored specifically for them, and breaks that people with less means can’t even fathom taking advantage of.

    Anyhow, you don’t think a tax-decrease is “spending” according to the accounting books for the federal government.

    Decreasing taxes (without decreasing spending) leads to the exact same deficits that increasing spending (without increasing taxes) leads to. Mathematically they are ONE IN THE SAME. Bush passed massive tax cuts, and didn’t decrease the spending to “pay” for them. That is the point I was trying to make in my list of 4 reasons why we have a huge deficit today.

    Trying to decrease spending is a very noble idea, and I am all for it. But first, tax rates need to go back to 2000 levels because they were never paid for in the first place. Balance the budget first by raising taxes to sustain current spending levels. Then, and only then, if you want to lower taxes: cut the spending FIRST.

    “Medicare – Part D…you’re right about that.” — what about the wars? Defense spending went from $300b/yr in 2000 to $700b/yr in 2010 — where is the tax to pay for that?

    We just need to be adults, admit that the past 10 years was a sham, and undo all of the things that negatively affected the budget. It is mathematically impossible to cut spending _enough_ to justify the low level of taxation we have today.

  23. BG Says:
    February 18th, 2011 at 5:57 pm

    JLP) also there is a pretty comprehensive study of these tax cuts at:

    http://www.cbpp.org/cms/index.cfm?fa=view&id=1811

    The result of the tax cuts had these affects (in 2004 when the study was done):

    Middle 20% saw a 2.3% increase in after-tax income
    Top 1% saw a 5.3% increase in after-tax income
    “Over $1m earners” saw a 6.4% increase in after-tax income

    If the tax-cuts were equal, all income groups should’ve seen the exact same increase in after-tax income.

  24. Courtney Says:
    February 18th, 2011 at 9:54 pm

    “Trying to decrease spending is a very noble idea, and I am all for it. But first, tax rates need to go back to 2000 levels because they were never paid for in the first place. Balance the budget first by raising taxes to sustain current spending levels. Then, and only then, if you want to lower taxes: cut the spending FIRST.” Sounds good to me! When are you running for office? :-)

    Also, in regards to the math abilities of the general public, I’m not holding my breath. I went to my meal preparation service tonight and the woman next to me couldn’t figure out that if the recipe says 1/2 cup of cheese and there is a 1/4 cup scoop in the cheese bin, you need to add two scoops.

  25. Harm Says:
    February 19th, 2011 at 3:44 am

    One large reason for the ‘balanced budget’
    in 2000 was that the 9/11 attacks had not yet
    happened. Talk about a Black Swan….

  26. Courtney Says:
    February 19th, 2011 at 8:05 am

    Harm – given that we then spent billions upon billions of dollars attacking the wrong country and creating a worthless new government department that has done nothing to keep us safe and continually takes away our freedoms, don’t you think it’s about time we said ‘enough’ and started rolling those things back?

  27. BG Says:
    February 19th, 2011 at 11:41 am

    I don’t want to get into whether we attacked the wrong countries or not — regardless, after 911, we massively increased spending on defense. When you increase spending, you should increase taxes by the _exact_same_amount_. Instead, our government decreased taxation — doubling the deficit effects.

    All of these deficits were predicted over ten years ago. When Clinton left office, and the rumor was that Bush was going to win and pass massive tax cuts (before 911) — it was predicted even then, that we’d have massive deficits today because of those tax cuts alone.

    911 just made the deficits that much larger. Then add a couple of recessions, some more tax cuts (in 2002, 2003, 2008, 2009, 2011), and a bunch more spending (medicare part-D) and here we are today.

    None of this should be a surprise to anyone.

    To solve the budget issues, instead of nickle and diming cuts to ‘discretionary spending’ (which is an insignificant part of the budget) — we need to roll back all tax cuts in the past ten years, and then increase taxes even more to properly fund the defense spending. Which is what should have been done in 2001.

  28. BG Says:
    February 19th, 2011 at 11:54 am

    Courtney said: “Sounds good to me! When are you running for office? ”

    Hey, fat chance anyone is going to get elected with campaign promises to raise taxes. We had a chance, but when Republicans took control of the house, everything came apart.

    So, what do you do instead: tax everyone with inflation — it’s the only way out. Fire up the printing presses, and print funny-money to pay off our debts to other nations.

    The future really does not look good for us.

  29. Aka Says:
    February 19th, 2011 at 1:19 pm

    Since the issue is a state one, I’ll focus on state taxes rather than entitlement programs. Texas’ budget mess, and it is that, was caused by a historic drop in tax revenues during the economic downturn and a structural deficit that was created when they put in the margins tax and cut property taxes.

    Texas relies heavily on the sales tax. During the economic downturn the state’s collections dropped dramatically.

    Texas instituted the margins tax a few years back. The plan was essentially to raise money form this tax to fund a property tax reduction. Unfortunately, the margins tax has collected far less that was projected- about $2 billion per year short- and the property tax cut has cost more than expected- about $1 billion a year over. Taken together that leaves the state $6 billion short over the biennium. This will go on in perpetuity unless they either raise property taxes or adjust the tax to collect what it was projected to collect.

    The other option is to cut spending. This does not address the long-term issue but it can assist with short term budget woes. Texas runs an extremely lean state government already- we’re 50th in per capita state spending, 43rd when you factor in local taxes.

  30. Jack Says:
    February 20th, 2011 at 10:45 pm

    “unfunded wars. Fighting two wars for 10 ten years and not a single penny in new taxes to fund them.”

    Just to put that in perspective, those two wars for ten years cost less that THIS years deficit. Furthermore, the ENTIRE DEFENSE BUDGET could be eliminated, and we would still have a deficit.

    The solution is simple — stop paying people to not work. No-one, NO-ONE, should be entitled to someone else’s earnings.

  31. BG Says:
    February 21st, 2011 at 2:19 pm

    Jack) The _extra_ defense spending from 2000 levels has cost us about $2.6 trillion so far (not including interest payments on the debt).

    Compare $2.6 trillion to Bush’s estimate that the war would cost $50b to $60b. So it has already cost more than 47 times the original estimates.

    As for ‘stop paying people not to work’ — eliminating unemployment insurance (and the taxes) would save about $22billion from the federal budget. That would reduce the current deficit by 1.6% — noble, but really just peanuts. Unemployment insurance outlays is estimated to be $82b — UI taxes/receipts is estimated to be $60b. Again, the problem was spending was increased (increasing the benefits), but the taxes weren’t raised at the same-time.

    We could cut ALL of the social programs / safety nets (along with their corresponding taxes) — and still have deficits. People keep complaining that Social Security is a massive part of the spending, but those people don’t realize that the SS-taxes more than funded the program and generated over $4 trillion in surpluses. If you are going to cut the safety-nets (like SS), then you need to cut the taxes that funded those safety nets — otherwise we’d have a revolution.

    When it comes to the federal debt/deficits, the big elephant in the room are the unfunded-wars, and the “unfunded” tax cuts of the past 10 years.

  32. Beeg Says:
    February 22nd, 2011 at 11:37 am

    The elephant in the room entitlements! Soc Sec, Medicare, Medicaid and Education (all levels).

    It’s going to get cut, one way or another.

    Agreed on defense spending.

    Disagree on more taxes. If you give politicians more money, they will spend it. Cut first. Prove responsibility – they won’t.

    This decade is going to be an interesting one.

  33. Jack Says:
    February 22nd, 2011 at 1:45 pm

    Don’t know where you’re getting $2.1T, but the Congressional Research Service says,

    “With the July 27, 2010 enactment of the FY2010 Supplemental Appropriations Act (H.R. 4899/P.L.
    111-201) Congress has approved a total of $1.121 trillion for military operations, base security,
    reconstruction, foreign aid, embassy costs, and veterans’ health care for the three operations initiated since the 9/11 attacks: Operation Enduring Freedom (OEF) Afghanistan and other counter terror operations; Operation Noble Eagle (ONE), providing enhanced security at military bases; and Operation Iraqi Freedom (OIF).”
    http://www.fas.org/sgp/crs/natsec/RL33110.pdf

    The FY2010 deficit was $1.293 trillion.

    In FY2010, the feral government spent $1.316 trillion on Welfare — including direct payments and health care. That does NOT include Social Security.
    http://www.usgovernmentspending.com/us_welfare_spending_40.html

    Total defense spending for FY2010 was $847.2B.

  34. BG Says:
    February 22nd, 2011 at 2:01 pm

    Beeg) taxes and spending were responsible in 2000. The changes were reducing taxes (without reducing spending), and starting two wars (without increasing taxes). Two very irresponsible things.

    Can you name for me the exact dollar amount that Social Security has contributed to the $14 trillion federal debt?

    Answer: not a single penny

  35. Jack Says:
    February 22nd, 2011 at 2:14 pm

    So please explain, BG, how the deficit was going DOWN between FY2004 (3.48% of GDP) and FY2007 (1.14% of GDP)?

    Then, the DEMOCRATS took over Congress and, surprise, surprise, surprise, the deficit went to 3.18%, then 9.91% of GDP! And somehow, that’s the REPUBICANS’ fault?

  36. BG Says:
    February 22nd, 2011 at 6:51 pm

    Jack) I’m not sure where to even begin with your comment, but let me try:

    “So please explain, BG, how the deficit was going DOWN between FY2004 (3.48% of GDP) and FY2007 (1.14% of GDP)?”

    Deficits are the difference between spending and taxation (think of it as spending and income in your personal budget). If you have a yearly deficit, then you add that amount to the total federal debt (and pay future interest on that amount as well). You also are making the mistake of comparing the yearly deficit to GDP — which makes no sense at all.

    If the yearly deficit goes up 10%, and the economy (GDP) goes up 11% — you are claiming that the deficit was reduced?!?! I’m not sure you have a handle on the definitions of the terms you are throwing around. In that example, regardless of GDP, the deficit increased 10% (from the previous year), and the total federal debt is getting much larger (not smaller).

    “Then, the DEMOCRATS took over Congress and, surprise, surprise, surprise, the deficit went to 3.18%, then 9.91% of GDP! And somehow, that’s the REPUBICANS’ fault?”

    Again, you are clouding the picture by comparing the yearly deficit to GDP — I don’t understand why you would want to do that. Having a recession will cause the numbers that you are throwing around: GDP is lowered (due to recession), spending can stay the same (as well as taxation/income) but your “deficit/GDP” ratio is going to increase.

    Anyhow, BOTH parties are to blame for all of the yearly deficits and the huge federal debt. For example:

    1) republicans are to blame for the unfunded ‘Bush-tax cuts’
    2) democrats are to blame for allowing #1.

    The only mention of ‘republicans’ in my comments was due to their recent winning of the house of representatives — had that _not_ happened, the bush-tax cuts would’ve expired (at least for couple earning over $250k AGI) — so the yearly deficit would be much smaller (because taxes would’ve gone up).

    “In FY2010, the feral government spent $1.316 trillion on Welfare — including direct payments and health care. That does NOT include Social Security.” I love that site you link to. They lump the “Making Work Pay” tax credit that everyone got the past few years as “welfare” — I guess I’m on welfare then (and you too likely)!

    If we are going to count that, then the number is actually MUCH larger for welfare: think of all the corporate welfare that goes on, bank bail-outs, Feddie/Frannie buying toxic mortgages to save banks, huge corporations like exxon paying $0 in federal taxes, farm-crop subsidies — all government spending is just ‘welfare’ — depending on whether you are the one getting the check or not…

  37. Jack Says:
    February 22nd, 2011 at 8:10 pm

    Last I checked, BG, the extension of the tax rates was passed by a DEMOCRAT Congress. You’re blaming Republicans that were not even in office yet!

    As for the “corporate welfare,” go find out how much they are, and we’ll talk about it. I favor ending ALL of it — the corporate bailouts, the bank bailouts, Fannie and Freddie, Welfare, Medicaid, Medicare, Social Security, whatever — ALL OF IT.

    Do you?

  38. BG Says:
    February 22nd, 2011 at 9:53 pm

    Jack) I guess you missed it two months ago when the entire Republican senate signed a letter stating they were going to filibuster every piece of legislation unless ALL the tax cuts where extended. Of course, Obama (and democrats in congress being wusses) caved and gave into the republican demands. So, again, I blame democrats for being sissies and letting the republicans continue their ‘spend-and-pretend’ campaign of the past decade.

    Corporate welfare example: 35% corporate income tax, Exxon had 2009 profits of $19.4b (yet paid $0 in income taxes to the federal government) — total welfare cost for just this one company: $6.8 Billion.

    “I favor ending ALL of it…” <– me too, as long as you eliminate the special taxes for those programs as well. If you eliminate social-security, you must eliminate the social security tax: and no self-respecting "conservative" would dare eliminate the SS-tax (because the SS-tax alone represents 49% of all taxes collected from individuals by the fed-government).

  39. Jack Says:
    February 23rd, 2011 at 11:54 am

    Two months ago (a bit more, really), the Republicans could not even hold together a filibuster — not with Snow and Collins, and even Brown, willing to side with Democrats.

    49%??!! Where DO you get your numbers?

    For FY11, AOSDI (Social Security) revenue will total $478.6B. Our total federal revenues for FY11 are projected to be $2,173.7B. That’s 22%, not 49%.
    http://www.usgovernmentrevenue.com/piechart_2011_US_total#usgs30230

    Now, you want to create jobs? Eliminate corporate income taxes. If the profits go to the stockholders (in dividends), THEN they should be taxed as any other income. If the profits are retained or re-invested by the company, they should not be taxed. Companies are just groups of individuals. When the individuals see the money, tax it at that level.

    Just think how much money would be saved if companies did not need tax attorneys! Just think how much the government could save not having to audit the corporate returns!

  40. Jack Says:
    February 25th, 2011 at 5:31 pm

    Well, it’s been two days now waiting for “moderation,” so I am reposting without the link to the budget data. I’ve replaced the keys in the link so you can go get the data if you want.

    ———————————————-

    Two months ago (a bit more, really), the Republicans could not even hold together a filibuster — not with Snow and Collins, and even Brown, willing to side with Democrats.

    49%??!! Where DO you get your numbers?

    For FY11, AOSDI (Social Security) revenue will total $478.6B. Our total federal revenues for FY11 are projected to be $2,173.7B. That’s 22%, not 49%.
    {wwwDOTusgovernmentrevenueDOTcomSLASHpiechart_2011_US_total#usgs30230}

    Now, you want to create jobs? Eliminate corporate income taxes. If the profits go to the stockholders (in dividends), THEN they should be taxed as any other income. If the profits are retained or re-invested by the company, they should not be taxed. Companies are just groups of individuals. When the individuals see the money, tax it at that level.

    Just think how much money would be saved if companies did not need tax attorneys! Just think how much the government could save not having to audit the corporate returns!

  41. BG Says:
    March 11th, 2011 at 7:28 pm

    BG said: “the SS-tax alone represents 49% of all taxes collected from individuals by the fed-government”

    Jack said: “49%??!! Where DO you get your numbers?”

    Jack) Using your link:

    2009 SS-tax receipts: $806.8 billion
    2009 Income tax receipts (individuals): $956 billion

    So, you get ~46% — you caught me, I inflated my number a bit.

    SS-tax receipts are 3 times the amount of corporation income taxes — and you want to cut corporation taxes further? Makes no sense.

    “When the individuals see the money, tax it at that level.” <– what about company paid for houses, jets, cars, health-insurance, golf trips, dinners, and everything else paid-for by a corporation but CONSUMED by an individual (think CEOs). These things aren't aren't included in the individuals "wages", but definitely contribute to lavish lifestyles.

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