The New New Math: Government Revenues are taken in by Magic.

[theDoctorisIn]

Those aren't all the taxes you pay. If you rent or own, you pay property taxes. You also pay sales taxes.

Good, moving the goalposts, I see.

I own a 3-family house. My property taxes are paid by rental income. And sales tax is around 8%. Even if I spent ALL of the money I make each year on sales taxable items in NY state, my total tax burden is still only at 43%.

The typical wage earner does not have their property taxes paid for by renters.

The "typical wage earner" doesn't have a 2 million dollar brownstone to pay the taxes on either. But that's not the point either, because the "typical wage earner" pays much lower rates than I pay as well.

 

[Rozman]

I don't get the disconnect between government revenues and taxes. That..is how government funds itself..mainly through taxation. Cut taxes and there were be less money to spend. And we've been spending money like crazy lately; two wars, a brand new agency, a brand new entitlement, bailing out corporate fuck ups and saving our banking, financial and insurance institutions. And this year..more butter. An extention of the Bush taxs cuts..yay!

Drying up the government, as Grover Norquist suggests, is going to make this country look like Guatemala..without the charm.

Krugman's take:

Op-Ed Columnist
The New Voodoo
By PAUL KRUGMAN
Published: December 30, 2010

Hypocrisy never goes out of style, but, even so, 2010 was something special. For it was the year of budget doubletalk — the year of arsonists posing as firemen, of people railing against deficits while doing everything they could to make those deficits bigger.

And I don’t just mean politicians. Did you notice the U-turn many political commentators and other Serious People made when the Obama-McConnell tax-cut deal was announced? One day deficits were the great evil and we needed fiscal austerity now now now, never mind the state of the economy. The next day $800 billion in debt-financed tax cuts, with the prospect of more to come, was the greatest thing since sliced bread, a triumph of bipartisanship

<-snip-<

How will this all end? I have seen the future, and it&#8217;s on Long Island, where I grew up.

Nassau County &#8212; the part of Long Island that directly abuts New York City &#8212; is one of the wealthiest counties in America and has an unemployment rate well below the national average. So it should be weathering the economic storm better than most places.

But a year ago, in one of the first major Tea Party victories, the county elected a new executive who railed against budget deficits and promised both to cut taxes and to balance the budget. The tax cuts happened; the promised spending cuts didn&#8217;t. And now the county is in fiscal crisis.

http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

As the Center on Budget and Policy Priorities points out, the incoming House majority plans to make changes in the &#8220;pay-as-you-go&#8221; rules &#8212; rules that are supposed to enforce responsible budgeting &#8212; that effectively implement Mr. Kyl&#8217;s principle. Spending increases will have to be offset, but revenue losses from tax cuts won&#8217;t. Oh, and revenue increases, even if they come from the elimination of tax loopholes, won&#8217;t count either: any spending increase must be offset by spending cuts elsewhere; it can&#8217;t be paid for with additional taxes.

http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

As this last Snowstorm in NYC proved..the people that complain the loudest are people that have that tax/finance the goverment disconnect.

Less revenue = Less Services.

Everytime.

Anybody and everybody knows that Nassau County has for the past ten years or so been taxed to the point of insanity.I have worked in a good number of areas along Sunrise Highway and have heard local Radio callers talk about the extreme taxes that are imposed on the people.Nassau County is one of the highest taxed areas in the State.When are the Lefties in this country going to stop pointing the blame on the already overtaxed populace.Why can't we start pointing the finger at government and try to get them to cut the spending.

 

[Revere]

Good, moving the goalposts, I see.

I own a 3-family house. My property taxes are paid by rental income. And sales tax is around 8%. Even if I spent ALL of the money I make each year on sales taxable items in NY state, my total tax burden is still only at 43%.

The typical wage earner does not have their property taxes paid for by renters.

The "typical wage earner" doesn't have a 2 million dollar brownstone to pay the taxes on either. But that's not the point either, because the "typical wage earner" pays much lower rates than I pay as well.

With the property tax rates in New York City, it DOES matter whether someone else is paying them or not, whether you have a $2M brownstone or not.

Property Tax Rates and Charges

 

[Revere]

I don't get the disconnect between government revenues and taxes. That..is how government funds itself..mainly through taxation. Cut taxes and there were be less money to spend. And we've been spending money like crazy lately; two wars, a brand new agency, a brand new entitlement, bailing out corporate fuck ups and saving our banking, financial and insurance institutions. And this year..more butter. An extention of the Bush taxs cuts..yay!

Drying up the government, as Grover Norquist suggests, is going to make this country look like Guatemala..without the charm.

Krugman's take:

Op-Ed Columnist
The New Voodoo
By PAUL KRUGMAN
Published: December 30, 2010

Hypocrisy never goes out of style, but, even so, 2010 was something special. For it was the year of budget doubletalk — the year of arsonists posing as firemen, of people railing against deficits while doing everything they could to make those deficits bigger.

And I don’t just mean politicians. Did you notice the U-turn many political commentators and other Serious People made when the Obama-McConnell tax-cut deal was announced? One day deficits were the great evil and we needed fiscal austerity now now now, never mind the state of the economy. The next day $800 billion in debt-financed tax cuts, with the prospect of more to come, was the greatest thing since sliced bread, a triumph of bipartisanship

<-snip-<

How will this all end? I have seen the future, and it’s on Long Island, where I grew up.

Nassau County — the part of Long Island that directly abuts New York City — is one of the wealthiest counties in America and has an unemployment rate well below the national average. So it should be weathering the economic storm better than most places.

But a year ago, in one of the first major Tea Party victories, the county elected a new executive who railed against budget deficits and promised both to cut taxes and to balance the budget. The tax cuts happened; the promised spending cuts didn’t. And now the county is in fiscal crisis.

http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

As the Center on Budget and Policy Priorities points out, the incoming House majority plans to make changes in the “pay-as-you-go” rules — rules that are supposed to enforce responsible budgeting — that effectively implement Mr. Kyl’s principle. Spending increases will have to be offset, but revenue losses from tax cuts won’t. Oh, and revenue increases, even if they come from the elimination of tax loopholes, won’t count either: any spending increase must be offset by spending cuts elsewhere; it can’t be paid for with additional taxes.

http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

As this last Snowstorm in NYC proved..the people that complain the loudest are people that have that tax/finance the goverment disconnect.

Less revenue = Less Services.

Everytime.

Anybody and everybody knows that Nassau County has for the past ten years or so been taxed to the point of insanity.I have worked in a good number of areas along Sunrise Highway and have heard local Radio callers talk about the extreme taxes that are imposed on the people.Nassau County is one of the highest taxed areas in the State.When are the Lefties in this country going to stop pointing the blame on the already overtaxed populace.Why can't we start pointing the finger at government and try to get them to cut the spending.

Ka-ching. The statist will always tell you that you are not paying enough. The statist is never satisfied with what they take from you.

 

[Zander]

Simple minds love simple concepts. Simpletons like Sallow believe that if we raise taxes we'll raise revenue. But it doesn't work that way in the real world.

Since World War II, federal revenue as a percentage of GDP hasn't budged much from a bit shy of 19 percent. Regardless of tax rates and what have you, that's the amount the feds have been able to collect. There have been more than 30 major changes in the tax code including personal income tax rates, corporate tax rates, capital gains taxes, dividend taxes, investment tax credits, depreciation schedules, Social Security taxes, etc... Yet during this period, federal government tax collections as a share of GDP have moved within a narrow band of just under 19% of GDP.

Why? When tax rates are raised, taxpayers are encouraged to shift, hide and under report income. Taxpayers divert their effort from pro-growth productive investments to seeking tax shelters, tax havens and tax exempt investments. This behavior tends to dampen economic growth and job creation. Lower taxes increase the incentives to work, produce, save and invest, thereby encouraging capital formation and jobs. Taxpayers have less incentive to shelter and shift income.

 

[Ernie S.]

So, after defense, police, and trash collection, the justification for government taking 60% of what you earn gets kind of shaky?

That's such a bullshit number it's not even funny. I'm in a high tax bracket in NY, and I pay about 35% of my income in tax - city, state, federal (including SS and Medicare).

Those aren't all the taxes you pay. If you rent or own, you pay property taxes. You also pay sales taxes.

And every thing you buy costs more because the company that makes it pays the second highest corporate tax rate in the world. It pays tax on the energy is uses to make your product, it pays tax on every nut. bolt. desk and computer in their factory and they pay tax on the fuel they burn to take their product to market

 

[Annie]

I don't get the disconnect between government revenues and taxes. That..is how government funds itself..mainly through taxation. Cut taxes and there were be less money to spend. And we've been spending money like crazy lately; two wars, a brand new agency, a brand new entitlement, bailing out corporate fuck ups and saving our banking, financial and insurance institutions. And this year..more butter. An extention of the Bush taxs cuts..yay!

Drying up the government, as Grover Norquist suggests, is going to make this country look like Guatemala..without the charm.

Krugman's take:

Op-Ed Columnist
The New Voodoo
By PAUL KRUGMAN
Published: December 30, 2010

Hypocrisy never goes out of style, but, even so, 2010 was something special. For it was the year of budget doubletalk — the year of arsonists posing as firemen, of people railing against deficits while doing everything they could to make those deficits bigger.

And I don’t just mean politicians. Did you notice the U-turn many political commentators and other Serious People made when the Obama-McConnell tax-cut deal was announced? One day deficits were the great evil and we needed fiscal austerity now now now, never mind the state of the economy. The next day $800 billion in debt-financed tax cuts, with the prospect of more to come, was the greatest thing since sliced bread, a triumph of bipartisanship

<-snip-<

How will this all end? I have seen the future, and it’s on Long Island, where I grew up.

Nassau County — the part of Long Island that directly abuts New York City — is one of the wealthiest counties in America and has an unemployment rate well below the national average. So it should be weathering the economic storm better than most places.

But a year ago, in one of the first major Tea Party victories, the county elected a new executive who railed against budget deficits and promised both to cut taxes and to balance the budget. The tax cuts happened; the promised spending cuts didn’t. And now the county is in fiscal crisis.

http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

As the Center on Budget and Policy Priorities points out, the incoming House majority plans to make changes in the “pay-as-you-go” rules — rules that are supposed to enforce responsible budgeting — that effectively implement Mr. Kyl’s principle. Spending increases will have to be offset, but revenue losses from tax cuts won’t. Oh, and revenue increases, even if they come from the elimination of tax loopholes, won’t count either: any spending increase must be offset by spending cuts elsewhere; it can’t be paid for with additional taxes.

http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

As this last Snowstorm in NYC proved..the people that complain the loudest are people that have that tax/finance the goverment disconnect.

Less revenue = Less Services.

Everytime.

Assuming you are correct, where did NYC cut taxes or financing related to snow removal? Let's start there.

 

[NYcarbineer]

Simple minds love simple concepts. Simpletons like Sallow believe that if we raise taxes we'll raise revenue. But it doesn't work that way in the real world.

Since World War II, federal revenue as a percentage of GDP hasn't budged much from a bit shy of 19 percent. Regardless of tax rates and what have you, that's the amount the feds have been able to collect. There have been more than 30 major changes in the tax code including personal income tax rates, corporate tax rates, capital gains taxes, dividend taxes, investment tax credits, depreciation schedules, Social Security taxes, etc... Yet during this period, federal government tax collections as a share of GDP have moved within a narrow band of just under 19% of GDP.

Why? When tax rates are raised, taxpayers are encouraged to shift, hide and under report income. Taxpayers divert their effort from pro-growth productive investments to seeking tax shelters, tax havens and tax exempt investments. This behavior tends to dampen economic growth and job creation. Lower taxes increase the incentives to work, produce, save and invest, thereby encouraging capital formation and jobs. Taxpayers have less incentive to shelter and shift income.

That's all horseshit. Tax revenue as a % of GDP are currently at 14%, the lowest they've been since 1950.

 

[NYcarbineer]

If lowering taxes increased tax revenue,

why not lower taxes to ZERO, and get infinite tax revenue?

lol

 

[Annie]

If lowering taxes increased tax revenue,

why not lower taxes to ZERO, and get infinite tax revenue?

lol

Other countries are getting it, businesses that is. You know, helping their economies:

Canada Slashes Business Taxes to Lure Investment - WSJ.com

Canada Slashes Business Levies

BY PHRED DVORAK

Canada is poised to cut its corporate-tax rate to 16.5% on Jan. 1, part of a decade-long campaign that some experts say is making the country one of the most cost-effective places to do business in the developed world.

Canada's government says the cuts and other business-attracting measures should bring more investment to the country. Economists say it's tough to figure out what the actual effects of such moves are, though some companies say Canada's relatively low taxes and stable financial and regulatory environment swayed their decisions to move operations and capital north...

Oh Canada! Neighbors to the North Slash Corporate Tax Rate - Fox News Video - FoxNews.com

 

[RetiredGySgt]

I don't get the disconnect between government revenues and taxes. That..is how government funds itself..mainly through taxation. Cut taxes and there were be less money to spend. And we've been spending money like crazy lately; two wars, a brand new agency, a brand new entitlement, bailing out corporate fuck ups and saving our banking, financial and insurance institutions. And this year..more butter. An extention of the Bush taxs cuts..yay!

Drying up the government, as Grover Norquist suggests, is going to make this country look like Guatemala..without the charm.

Krugman's take:

Op-Ed Columnist
The New Voodoo
By PAUL KRUGMAN
Published: December 30, 2010

Hypocrisy never goes out of style, but, even so, 2010 was something special. For it was the year of budget doubletalk — the year of arsonists posing as firemen, of people railing against deficits while doing everything they could to make those deficits bigger.

And I don’t just mean politicians. Did you notice the U-turn many political commentators and other Serious People made when the Obama-McConnell tax-cut deal was announced? One day deficits were the great evil and we needed fiscal austerity now now now, never mind the state of the economy. The next day $800 billion in debt-financed tax cuts, with the prospect of more to come, was the greatest thing since sliced bread, a triumph of bipartisanship

<-snip-<

How will this all end? I have seen the future, and it’s on Long Island, where I grew up.

Nassau County — the part of Long Island that directly abuts New York City — is one of the wealthiest counties in America and has an unemployment rate well below the national average. So it should be weathering the economic storm better than most places.

But a year ago, in one of the first major Tea Party victories, the county elected a new executive who railed against budget deficits and promised both to cut taxes and to balance the budget. The tax cuts happened; the promised spending cuts didn’t. And now the county is in fiscal crisis.

http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

As the Center on Budget and Policy Priorities points out, the incoming House majority plans to make changes in the “pay-as-you-go” rules — rules that are supposed to enforce responsible budgeting — that effectively implement Mr. Kyl’s principle. Spending increases will have to be offset, but revenue losses from tax cuts won’t. Oh, and revenue increases, even if they come from the elimination of tax loopholes, won’t count either: any spending increase must be offset by spending cuts elsewhere; it can’t be paid for with additional taxes.

http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

As this last Snowstorm in NYC proved..the people that complain the loudest are people that have that tax/finance the goverment disconnect.

Less revenue = Less Services.

Everytime.

Actually it is a proven fact that to a certain point lowering taxes brings in MORE taxes as people that hide money and seek loop holes quit doing so.

It is a matter of cost. If taxes are lowered and loop holes eliminated reasonably then more people actually pay their taxes. As the cost not to do so goes up past the point they are saving by doing so. And the Government collects MORE money.

 

[Poli_Sigh]

Has anyone ever noticed that no matter how dire things get, the government can always pull a few hundred million from somewhere to cover some incidental? I've always found that fascinating. Talk about sleight of hand? Now don't you wish you had the magic top hat at your house? Me first!

 

[Midnight Marauder]

I don't get the disconnect between government revenues and taxes. That..is how government funds itself..mainly through taxation. Cut taxes and there were be less money to spend.

Taxation's purpose is to raise revenue, not enforce "social justice." Not to punish success. Not to grow government.

The only reason there's a revenue problem is 20 MILLION FOLKS OUT OF WORK AND THEREFORE NOT PAYING MUCH INCOME TAX! There's no "magic" related to that, only reality.

Put them back to work! Follow Canada's lead, and drop the corporate tax rate, for starters.

On the other side of the pancake -- the more money the government gets, the more it spends. The more it increases its power and becomes more intrusive. The more WASTEFUL it becomes.

Get a version of Gramm-Rudmann back and re-install a version of line-item veto, if you want a balanced budget. Get a Paygo with some actual TEETH. It worked for Billy Clinton, it will work for Barack.

 

[hipeter924]

[ame]http://www.youtube.com/watch?v=otCpCn0l4Wo&feature=related[/ame]

Divert most of your money to the caymans or a hidden swiss bank account, and you do that to the govt.

 

[code1211]

I should have include this..was the crux of the OpEd:

As the Center on Budget and Policy Priorities points out, the incoming House majority plans to make changes in the “pay-as-you-go” rules — rules that are supposed to enforce responsible budgeting — that effectively implement Mr. Kyl’s principle. Spending increases will have to be offset, but revenue losses from tax cuts won’t. Oh, and revenue increases, even if they come from the elimination of tax loopholes, won’t count either: any spending increase must be offset by spending cuts elsewhere; it can’t be paid for with additional taxes.
http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

Amazing.

It would seem then that a wise manager of any enterprise which was spending more than it was collecting might want to reduce the spending.

 

[mudwhistle]

I don't get the disconnect between government revenues and taxes. That..is how government funds itself..mainly through taxation. Cut taxes and there were be less money to spend. And we've been spending money like crazy lately; two wars, a brand new agency, a brand new entitlement, bailing out corporate fuck ups and saving our banking, financial and insurance institutions. And this year..more butter. An extention of the Bush taxs cuts..yay!

Drying up the government, as Grover Norquist suggests, is going to make this country look like Guatemala..without the charm.

Krugman's take:

Op-Ed Columnist
The New Voodoo
By PAUL KRUGMAN
Published: December 30, 2010

Hypocrisy never goes out of style, but, even so, 2010 was something special. For it was the year of budget doubletalk — the year of arsonists posing as firemen, of people railing against deficits while doing everything they could to make those deficits bigger.

And I don’t just mean politicians. Did you notice the U-turn many political commentators and other Serious People made when the Obama-McConnell tax-cut deal was announced? One day deficits were the great evil and we needed fiscal austerity now now now, never mind the state of the economy. The next day $800 billion in debt-financed tax cuts, with the prospect of more to come, was the greatest thing since sliced bread, a triumph of bipartisanship

<-snip-<

How will this all end? I have seen the future, and it’s on Long Island, where I grew up.

Nassau County — the part of Long Island that directly abuts New York City — is one of the wealthiest counties in America and has an unemployment rate well below the national average. So it should be weathering the economic storm better than most places.

But a year ago, in one of the first major Tea Party victories, the county elected a new executive who railed against budget deficits and promised both to cut taxes and to balance the budget. The tax cuts happened; the promised spending cuts didn’t. And now the county is in fiscal crisis.

http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

As the Center on Budget and Policy Priorities points out, the incoming House majority plans to make changes in the “pay-as-you-go” rules — rules that are supposed to enforce responsible budgeting — that effectively implement Mr. Kyl’s principle. Spending increases will have to be offset, but revenue losses from tax cuts won’t. Oh, and revenue increases, even if they come from the elimination of tax loopholes, won’t count either: any spending increase must be offset by spending cuts elsewhere; it can’t be paid for with additional taxes.

http://www.nytimes.com/2010/12/31/opinion/31krugman.html?_r=1&hp

As this last Snowstorm in NYC proved..the people that complain the loudest are people that have that tax/finance the goverment disconnect.

Less revenue = Less Services.

Everytime.

I don't get the disconnect between deficits and spending ether.

 

[code1211]

Good Lord.... what the hell is wrong with this person?

What the fuck is wrong with you?

How EXACTLY do you think government is funded?

Really? Where do you think they get their liquidity from?

Bake sales? A magic pot of gold?

What?

When you think about 11 carrier fleets...do you think they are doing those for free?

Do you think your local cops are patrol streets out of the goodness of their hearts?

Do you think the guys picking up your trash daily think it's a fun sport?

I don't get where you get these extremely stupid ideas from.

So, after defense, police, and trash collection, the justification for government taking 60% of what you earn gets kind of shaky?

Well, there is a crical need for more tunnels for the salamanders.

 

[mudwhistle]

In case you don't know NYC is one the highest taxed cities in the world and what kind of services do they get for it.

 

[editec]

Heard recently that the FED borrows 42 cents out of every dollar it spends.

Somethings gonna give sooner or later.

And THAT was the plan all along.

 

[code1211]

I own a 3-family house. My property taxes are paid by rental income. And sales tax is around 8%. Even if I spent ALL of the money I make each year on sales taxable items in NY state, my total tax burden is still only at 43%.

Apparently we use of that word diferently.