New Revenue Sources

Discussion in 'Clean Debate Zone' started by Sactowndog, Nov 10, 2012.

  1. Sactowndog
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    Sactowndog Active Member

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    Now that Obama is President it is clear we won't be relying on dynamic scoring to address the deficit and real revenue will be included in the plan. So the question is what revenue is best and worst for the economy.

    My thoughts:

    Taxes on the 90%:
    In real income terms this segment of the population has seen income fall. Most save very little and spend trying to keep up with real income. Taxes here will come directly out of the economy. Conclusion: Horrible for the economy

    Taxes on the 10%:
    In real income terms, this segment has seen its income grow substantially. Given their income growth they are able to absorb increased taxes without affecting spending and the economy. Given most of them have geographically diverse portfolios any impact on US investment will be muted. The exception to this would be those investing in small businesses where the impact would be severe. Conclusion: slightly negative to the extent small business owners make up that 10% (does anyone have the data)

    Corporate Taxes:
    These taxes are already among the highest in the world and dissuade Corporations from bringing money back into the US where it could be invested for US jobs. For local companies it makes it very hard to invest in hiring new workers and be competitive with firms in China. Conclusion: Severely negative and in fact should be reduced.

    Capital Gains Taxes:
    These taxes historically have been reduced on the assumption investment will generate local jobs. Today that is no longer true as most wealthy investors diversify globally and the US only gets at best a third of the investment. In addition the low capital gains rate lowers the hurdle for hedge funds who want to buy US companies and drive profits by outsourcing employees. Conclusion: Nuetral to Positive for the US economy.

    Capital Exportation Taxes:
    Not known in the US but heavily used in Asia these taxes penalize corporations from extracting cash from the local economy. The goal is to insure money made from the local market gets invested back into the local market rather than repatriated to another country to grow that market. Conclusion: Positive for the US economy at moderate levels.
     
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  2. Grandma
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    Grandma Geezer Chick Supporting Member

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    Works for me!
     
  3. Sactowndog
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    Sactowndog Active Member

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    Hmmm from the lack of debate you might assume that the board consensus would be to raise Capital Gains taxes and institute a capital export tax. I would also slightly raise the 10% personal income tax in exchange for dramatically reducing the corporate income tax. Those small businesses who would be affected could incorporate and lower their tax burden.
     
  4. Mr. H.
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    Mr. H. Diamond Member

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    $40 billion from oil and gas industries alone- by denying them operating under the same tax code as every other industry.
     
  5. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    When are you going to talk about spending cuts?
     
  6. Sactowndog
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    Sactowndog Active Member

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    Nobody doesn't believe we need spending cuts. Spending as a percent of GDP is over 20% when it needs to be 17-18%. But as long as we want to keep our current global military posture we will spend in the 17-18 range and revenue is currently in the 15% of GDP range which means if you are honest about the deficit you have to increase revenue. That means what revenue can I increase with the least negative effect on the economy. Those areas would be, I believe, a capital gains tax increase, a capital exportation tax, and an estate tax.

    The cold truth is neither side wants to pay for what we spend.
     
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  7. LoneLaugher
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    LoneLaugher Diamond Member

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    Why do you expect people to buy the BS about corporate taxes being too high? You seem like a thoughtful person. Why assume that your readers are not?
     
  8. Sactowndog
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    Sactowndog Active Member

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    Because it is not BS. People have to consider that wealth and geography are no longer linked. That fact has huge implications for Corporate Income taxes and Capital Gains taxes. Historically we have lowered capital gains taxes as incentive to invest. But now countries are in global competition to attract investment. What attracts that investment is not lower capital gains as the investor may or may not reside here. Instead lower corporate income taxes rewards investment and job creation. It pulls investment from investors all over the globe and that means jobs.

    We need to understand what is creating jobs and provide incentives for those. Remember competitive countries like China and Singapore not only don't tax at the same corporate tax rate but may provide subsidies. We have it backward in that we reward the wealthy regardless if their return results in US jobs and we penalize Global US investors with the highest corporate income tax rate.

    Lastly, logically why force a foreign investor who is putting money into our economy to pay for our domestic government? That burden should fall on local residents who receive the services. Now the company should not be able to invest and withdraw capital like some modern day version of colonialism. That reason is why some capital exportation tax is a must in addition to prohibitions on exporting the jobs associated with IP generated with local government funds.
     
    Last edited: Nov 14, 2012
  9. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    Blaming the increase in spending on defense is, to coin a phrase, malarkey. You don't think the rise in entitlement spending has more to do with it? Democrats have always been unwilling to address that issue; you cannot possibly raise taxes enough to cover the increase in entitlement program spending; not even close. AND, if Obama gets his 1.6 trill tax hike on the rich on top of all the other tax increases coming Jan 1, the economy WILL suffer. I cannot imagine how any sane person can possibly think that soaking the rich that much will not have serious negative consequences.
     
  10. Polk
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    Polk Classic

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    Democrats have unwilling to address entitlement spending? Obama put Social Security and Medicare on the table during the debt ceiling negotiations. Also, far from being unwilling to touch entitlement, one law did (Affordable Care Act), which the Republicans then turned and bashed the Democrats for.
     

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