Why We Should Increase Taxes?

Discussion in 'Politics' started by Flopper, May 5, 2010.

  1. Flopper
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    Flopper Gold Member

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    If the deficit continues to rise, the government will have to pay higher rates of interest which will add to the deficit problem and will bring on inflation. Since neither political party has been successful at controlling spending, we should increase taxes, however Conservative argue that:

    1. Government Spending is out of control . Look at the following graph, which clearly shows that government spending as a percent of GDP peaked in the early 1990’s and has been trending downward ever since. Although spending in absolute dollars has risen, GDP has risen faster. Our deficits are not the result of wild government spending, but rather extraordinarily low taxes.

    http://upload.wikimedia.org/wikipedia/en/d/d9/Us_gov_spending_history_1902_2010.png

    2. Raising Taxes will reduce economic growth. If this were true then we should see significantly higher GNP growth as a result of low tax rates and lower GNP growth as result of high taxes. Look at the following chart, which shows the effect of tax rates on GNP.
    Sorry Republicans, Higher Taxes Will NOT Kill The Economy

    So, why shouldn't we reduce the deficit by increasing taxes?
     
    Last edited: May 5, 2010
  2. txlonghorn
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    txlonghorn Senior Member

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    exactly how would you go about it without damaging the precious veneer-covered reputation of our current leader?

    Why not do away with the BILLIONS of stimulus dollars that have yet to be spent instead?

    Oooor...we could continue to limit how much money the rich can make and turn all the additional income over to the government. You know if we took all the fortunes that will be made this year and figured out exactly how much each millionaire HAD to have in order to exist for...oh...let's say 2 years...and took the rest of their income and donated it to some creative and catchy little fund...let's call it the DEFICIT CORRECTION FUND...we'd probably be out of the hole pretty quickly. It's just 2 years...even the rich can live off of only what they have to have to exist for 24 months...don't you think?

    Then after that, we can go back to business as usual and everybody can have their lives back.

    *****************The preceeding idea isn't intended to be taken seriously, however, it probably will be taken as a logical plan by someone*****************
     
    Last edited: May 5, 2010
  3. Oddball
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    Oddball BANNED Supporting Member

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    Why shouldn't we reduce the deficit by drastically reducing spending?
     
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  4. txlonghorn
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    txlonghorn Senior Member

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    DUDE!!! How very un-American of you!
     
  5. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    Here's why we shouldn't try to get rid of the deficit by increasing taxes:

    1. The objective is to benefit the economy by eliminating the deficit; iow, to encourage growth instead of contraction.

    2. Government taxes things like alcohol and cigarettes to discourage consumption, an acknowledgment that taxing something causes less of it.

    3. Therefore, increasing taxes on activities necessary for economic growth will result in less of such economically beneficial activities, and at some point, cause an economic contraction.

    4. More Taxes = Worse Economy
     
  6. Big Fitz
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    1. You grasp the fundamental problem. Government is spending money with little to no return. It's investing our tax dollars in deadbeats, union bailouts, corporate bail outs, unemployment benefits and other low value but very visible projects. We need a 4 to 1 spending cut for every dollar of taxes raised, IF we allow taxes TO be raised.

    2. No, tax increases have never... EVER increased economic activity. The depression of 1920, yes, the Wilson caused depression was solved not with increasing taxes, but by cutting all government spending by 50% and then letting the market do it's job. The result? One of the biggest economic booms in history, till bad ethics and business models caused it to go bust again. Classic free market system in action. But thanks to Keynsian economic theory and socialist programs based on 'we gotta do SOMETHING', that stretched out the crash into the Great Depression, because the market wasn't allowed to function normally.

    But, in the world of taxation, the economy IS a zero sum game, while the economy is not. For every dollar you take out of private hands, is money that cannot go towards paying wages or investing, or upgrading a business. The government then spends it on a project that may or may not have any reciprocal economic value, because they aren't held to the same 'profit or die' standard as the rest of the free market. That is why money in government hand is more wasteful AND harms the private sector. So, if you strip money out of the private sector, there can be no growth, or rather the growth if it occurs will be of lesser size and quality than if the private sector did it.

    3. If we increase revenues, somehow, to the federal government, what are they going to do with it? since they've been living essentially consequence free for the last 50 years on this ever increasing taxation attitude congress seems to have marinated in, they'll keep doing the same damn things. What's that? Spend it on NEW social programs and votes, like they always do. This process will continue and grow until it has no choice BUT to collapse. That result will happen no matter what we do. It's only a question of how big it will be. And right now, it's astronomically big and bad.

    So, although I can see why you'd think you'd want increased taxes, are you the one willing to pay them? You willing to pony up double, triple the dough when you have no idea how it's being spent or a very good idea it's being spent poorly or on things you are against?

    Just things to consider while you tout higher taxes for irresponsible governance.
     
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  7. Big Fitz
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    1. You grasp the fundamental problem. Government is spending money with little to no return. It's investing our tax dollars in deadbeats, union bailouts, corporate bail outs, unemployment benefits and other low value but very visible projects. We need a 4 to 1 spending cut for every dollar of taxes raised, IF we allow taxes TO be raised.

    2. No, tax increases have never... EVER increased economic activity. The depression of 1920, yes, the Wilson caused depression was solved not with increasing taxes, but by cutting all government spending by 50% and then letting the market do it's job. The result? One of the biggest economic booms in history, till bad ethics and business models caused it to go bust again. Classic free market system in action. But thanks to Keynsian economic theory and socialist programs based on 'we gotta do SOMETHING', that stretched out the crash into the Great Depression, because the market wasn't allowed to function normally.

    But, in the world of taxation, the economy IS a zero sum game, while the economy is not. For every dollar you take out of private hands, is money that cannot go towards paying wages or investing, or upgrading a business. The government then spends it on a project that may or may not have any reciprocal economic value, because they aren't held to the same 'profit or die' standard as the rest of the free market. That is why money in government hand is more wasteful AND harms the private sector. So, if you strip money out of the private sector, there can be no growth, or rather the growth if it occurs will be of lesser size and quality than if the private sector did it.

    3. If we increase revenues, somehow, to the federal government, what are they going to do with it? since they've been living essentially consequence free for the last 50 years on this ever increasing taxation attitude congress seems to have marinated in, they'll keep doing the same damn things. What's that? Spend it on NEW social programs and votes, like they always do. This process will continue and grow until it has no choice BUT to collapse. That result will happen no matter what we do. It's only a question of how big it will be. And right now, it's astronomically big and bad.

    So, although I can see why you'd think you'd want increased taxes, are you the one willing to pay them? You willing to pony up double, triple the dough when you have no idea how it's being spent or a very good idea it's being spent poorly or on things you are against?

    Just things to consider while you tout higher taxes for irresponsible governance.
     
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  8. Gadawg73
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    Gadawg73 Gold Member

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    Who better knows how to spend $?
    You or the government?
    Lower capital gains taxes, eliminate the IRS and go to a flat tax and the economy will take off.
     
  9. Flopper
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    Flopper Gold Member

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    Both parties have tried and failed.
     
  10. Flopper
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    Flopper Gold Member

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    Sounds reasonable, however there is no basis to your claim that an increase in taxes will necessary slow economic growth. If what you say is correct, then we should be able to see a reduced rate of growth when taxes are increased but we don't. I don't deny that tax increases may have some effect on growth but there are many other factors that effect growth other than taxes.

    The conservative's approach is to reduce spending so taxes can be reduced. Reduction in taxes make money available for consumption and investment, thereby increasing economic activities and thus increasing government revenue. But, this is really just a theory that has never been proved but has been preached so long and hard that millions accept it as fact.
     

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