"Paying" for tax cuts

[Quantum Windbag]

A genuine fiscal conservative would say,

we're not cutting taxes without simultaneous spending cuts. A genuine fiscal conservative would not let the tax cut zealots play the old con game of promising that spending cuts are coming, someday, sometime,

but in the meantime let's cut taxes.

What the **** have I posted that makes you think I am a anything other than a genuine windbag? Not being restricted by anyone else's definitions of me or my beliefs I can honestly point out that the only thing, repeat the only thing, that increases the deficit is spending money that does not exist.

And cutting taxes decreases the amount of money that exists, so if that formerly existent money was paying for something, and you cut it, then that something is no longer paid for.

Therefore anyone advocating for cutting taxes without cutting spending is advocating an action that is, mathematically,

no different than someone who is advocating increased spending without increasing taxes.

How does cutting taxes reduce the money that exists? Does that mean that raising taxes increases the money supply? If it does, why does the fed have to print more money to make QEII work? all that would be necessary to stabilize the economy would be to allow the Busch tax cuts expire for everyone, and this would, somehow, magically increase the supply of money.

By the way, I will bet that you cannot find anywhere where I either advocated tax cuts, or not cutting spending to meet the reduced revenue.

 

[Ravi]

Deficits can be caused by spending more than you have.

They can also be caused by a reduction of income needed to pay for basics that keep one alive. Sure, you can just choose to die but that is unrealistic and against human nature.

This argument is silly, though. We already have a huge deficit. Cutting spending to nothing will not make it go away and cutting taxes will only add to it as we struggle to pay off the interest.

 

[editec]

Deficits can be caused by spending more than you have.

They can also be caused by a reduction of income needed to pay for basics that keep one alive. Sure, you can just choose to die but that is unrealistic and against human nature.

This argument is silly, though. We already have a huge deficit. Cutting spending to nothing will not make it go away and cutting taxes will only add to it as we struggle to pay off the interest.

Yup.

Both parties have been spending more than the government has been taking in and borrowing to pay for their largess (that mostly went to their campaign funding corporate buddies, but that's another rant),

Our choices are simple.

1. Cut spending, or
2. increase taxes, or
3. some combination of both, or
4. Sit back and watch what happens as the Federal government, and the State governments and your local governments go broke.

 

[Greenbeard]

If taxes are cut and spending is not the problem is that the government is spending too much money. This in no way, shape, or form, means that a lack of revenue contributes to the deficit. If the government did not spend more money than it had there would not be a deficit.

I'm curious: how much would you say the stimulus package (ARRA) cost, i.e. what was its deficit impact?

I'd like to know whether you'd given the accepted price tag or simply the value of the spending component (which, is apparently, the only thing that could impact the deficit), which is about a third smaller than the standard number. Did the stimulus, in fact, cost about $500 billion?

 

[icculus]

You do know that some of these people want to change the law so that pi is equal to 3, don't you? Because a bunch of people make a law that says tax cuts add to the deficit, and then create ways to get around that law, does not make it work that way in the real world.[/QUOTE]

And I assume you know that when you cut taxes without reducing spending (the bush tax cuts) that it creates a deficit? I understand your semantic point of view relating to the tax and spend methods of Washington, but let's be honest here. Without cutting spending, the decision to cut tax rates helped raise our deficit.

Let's say we somehow are able to balance the budget next year through a ridiculous amount of budget cuts. Even if we are running a slight surplus, this country still has 12 trillion dollars in debt to pay off as well, right? How do we plan on paying that down? It cannot be realistically paid off simply by slashing spending. Real fiscal conservatives realize that taxes for all brackets are going to have to be permanently raised, especially with the skyrocketing healthcare costs which are directly related to federal spending on Medicare/Medicaid.

This issue is precisely why I quit the republican party long ago. Only in rhetoric does the GOP care about fiscal sanity. Republicans would rather engage in semantic arguments which state the tax cuts can never add to our deficit, rather than simply admit that they ended up being reckless longterm policy.

 

[Toro]

I do not keep insisting this. If this is what you think I am arguing, that is your problem, not mine. What I keep insisting is that tax cuts by themselves are detrimental to the fiscal balance. You keep insisting that the fiscal balance is always a function of spending, no matter what the level of tax revenues.

Tax cuts are not detrimental unless the government spends more than it makes. Tax increases are not helpful unless the government spends less than it gets. The politicians in charge of our government only pay lip service to balancing the budget, they always spend more money than the government has. That happens because they believe that all money belongs to the government, and that any tax cuts they give are gifts to us. I refuse to believe this, and you apparently want me to think you believe this also, yet you insist that tax cuts is equivalent to the taxpayers refusing to pay for something we have money for.

The money does not belong to the government and tax cuts is not us refusing to pay, nor is it the government giving us our money back.

Ideologues really strive to make simple things a lot more complex than they are. They attempt to make the fact that the government spends more money than it has is the fault of the people who insist that the money that people earn does not belong to the government. They insist that cutting revenue is refusing to pay for something. They attempt to make people think up is down and that black is white. Then they try to pretend they are actually moderates and sensible by claiming that anyone who points out that the situation is actually simple, and thus easily defined, are the real ideologues.

That's not an ideologue. An ideologue is someone who looks at the world through the prism of ideology. You are looking at the world through the prism of right-wing ideology. Your whole argument is premised on ideology.

I completely agree with your bolded statement. The money doesn't belong to the government. It belongs to the people. But that doesn't revenue foregone doesn't "cost" the government.

You are framing this argument based on ideology and the premise that something can only "cost" if it is owned. Your ideology presumes that "cost" can only occur if something is owned. That is simply wrong, and it is how you and other right-wing ideologues try to frame the debate.

"Cost" is also defined as something foregone. You ever study economics? If you have, you understand the term "opportunity cost." Opportunity cost occurs when you choose something over another. Yet, by definition, you have never owned what you have chosen to forego. If you choose to go to the football game over the concert, the opportunity "cost" is missing the concert. If you choose not to go to University, it "costs" you future income from an education missed. Yet, you have never owned that future income. If the kicker misses the game-winning field goal, it "costs" his team the game. Yet, his team never "owned" the win. This is why your argument is about philosophy and semantics.

So yes, tax cuts "cost" the government and cause deficits, even if the wealth is owned by the people.

If taxes are cut and spending is not the problem is that the government is spending too much money. This in no way, shape, or form, means that a lack of revenue contributes to the deficit. If the government did not spend more money than it had there would not be a deficit.

And the left-wing ideologue would say if the government didn't have such low taxes, there would never be a deficit. This is what I mean by how you are framing your argument through ideology. Your ideology looks at the world as individuals being the driving force behind society well-being. The left-wing ideologue looks a the world as the collective being the driving force behind society well-being. So the left-wing ideologue believes taxes are never too high and spending is never the problem.

I happen to agree with you and not the collectivists. Individuals are the driving force behind society well-being. But that doesn't mean that tax cuts do not "cost" the government. It is the actions (tax cuts) which cause the outcome (deficit), not the lack of actions (no change in spending).

 

[Quantum Windbag]

Deficits can be caused by spending more than you have.

They can also be caused by a reduction of income needed to pay for basics that keep one alive. Sure, you can just choose to die but that is unrealistic and against human nature.

This argument is silly, though. We already have a huge deficit. Cutting spending to nothing will not make it go away and cutting taxes will only add to it as we struggle to pay off the interest.

What are the basic needs of the government? Will it die if it does not get food and water? If so, how much does it need?

As I have repeatedly posted, a reduction in planned increases in spending of about 4% per year will balance the budget in about 10 years. Continue that policy and we will eventually pay off the deficit. You are acting like the current deficit is insurmountable, when it is only the projected deficit is insurmountable.

 

[Quantum Windbag]

If taxes are cut and spending is not the problem is that the government is spending too much money. This in no way, shape, or form, means that a lack of revenue contributes to the deficit. If the government did not spend more money than it had there would not be a deficit.

I'm curious: how much would you say the stimulus package (ARRA) cost, i.e. what was its deficit impact?

I'd like to know whether you'd given the accepted price tag or simply the value of the spending component (which, is apparently, the only thing that could impact the deficit), which is about a third smaller than the standard number. Did the stimulus, in fact, cost about $500 billion?

Since all of the money is not yet spent, I have no idea how much it has impacted the deficit. I will admit upfront that only the spending impacted the deficit though, since that is really what you want to know. Like I said, both sides of the issue in Congress argue that tax cuts impact the deficit, and the CBO is constrained by law to assume they do. That is the problem in DC, they think the money belongs to them, not us.

 

[Quantum Windbag]

And I assume you know that when you cut taxes without reducing spending (the bush tax cuts) that it creates a deficit? I understand your semantic point of view relating to the tax and spend methods of Washington, but let's be honest here. Without cutting spending, the decision to cut tax rates helped raise our deficit.

Isn't that what I have been saying all this time? If you spend more than you have you increase the deficit.

Nonetheless, it is not the cuts that increase the deficit, it is continuing to spend like the cuts did not happen, and like you had money that would not be there even without the cuts. This is very simple and I have no idea why people insist that it does not work that way.

Let's say we somehow are able to balance the budget next year through a ridiculous amount of budget cuts. Even if we are running a slight surplus, this country still has 12 trillion dollars in debt to pay off as well, right? How do we plan on paying that down? It cannot be realistically paid off simply by slashing spending. Real fiscal conservatives realize that taxes for all brackets are going to have to be permanently raised, especially with the skyrocketing healthcare costs which are directly related to federal spending on Medicare/Medicaid.

We don't have to introduce ridiculous cuts in order to balance the budget. We can introduce slight cuts in projected increases in spending, and even some modest tax increases, mostly through eliminating most of the loop holes and exemptions in the tax code. Balancing the budget is really easy, but the politicians will never do it because they are more concerned about getting elected than doing their job.

Paying down the debt would be a simple matter of a more substantial cuts and tax increases, and not using that money for anything else.

This issue is precisely why I quit the republican party long ago. Only in rhetoric does the GOP care about fiscal sanity. Republicans would rather engage in semantic arguments which state the tax cuts can never add to our deficit, rather than simply admit that they ended up being reckless longterm policy.

AS long as you are not going to argue that the Democrats do better I have no problem with anything you said there.

 

[Quantum Windbag]

That's not an ideologue. An ideologue is someone who looks at the world through the prism of ideology. You are looking at the world through the prism of right-wing ideology. Your whole argument is premised on ideology.

No. you are looking at me through a prism because I insist that things are simple when you want to make them complicated. Your prism, ideology, is different than mine, yet you insist that it does not exist, and, that because you disagree with it, it must be right wing.

I completely agree with your bolded statement. The money doesn't belong to the government. It belongs to the people. But that doesn't revenue foregone doesn't "cost" the government.

You are framing this argument based on ideology and the premise that something can only "cost" if it is owned. Your ideology presumes that "cost" can only occur if something is owned. That is simply wrong, and it is how you and other right-wing ideologues try to frame the debate.

No, you are attempting to frame my argument that way. I am stating that revenues reductions are not payed for, they are something that exist. If you refuse to accept that the money is not there, and continue to spend like it is, you will eventually be forced to pay for the extra spending. However, if you accept that the money is not there, and live within your means, you will not have to pay for anything.

Accepting that reality is not paying for tax cuts, it is accepting reality. Claiming that you have to pay for that is bipartisan political ideology.

"Cost" is also defined as something foregone. You ever study economics? If you have, you understand the term "opportunity cost." Opportunity cost occurs when you choose something over another. Yet, by definition, you have never owned what you have chosen to forego. If you choose to go to the football game over the concert, the opportunity "cost" is missing the concert. If you choose not to go to University, it "costs" you future income from an education missed. Yet, you have never owned that future income. If the kicker misses the game-winning field goal, it "costs" his team the game. Yet, his team never "owned" the win. This is why your argument is about philosophy and semantics.

I have been having to factor that into my tech business, and am reconsidering the way I supply myself with parts. I have been making cables rather than buying them ready made because it seemed less expensive to do it that way, but it appears that, if I factor in the lost time making the part compared to the time I could be doing something else that earns me revenue I might be wrong. Still a little iffy on the numbers, and if I factor in the fact that I enjoy the drudge work of making cables, and other parts, it might not be worth it, but the truth is it is probably as cost effective to buy even the smaller cables ready made.

Choosing between luxuries, and claiming that as an opportunity cost, is more problematic, in my opinion.

So yes, tax cuts "cost" the government and cause deficits, even if the wealth is owned by the people.

I still do not see it. Just because the government is unable to continue to pay $800 for a toilet seat instead of the $30 or so the rest of us pay does not mean it costs the government anything not to get that $800 toilet seat.

And the left-wing ideologue would say if the government didn't have such low taxes, there would never be a deficit. This is what I mean by how you are framing your argument through ideology. Your ideology looks at the world as individuals being the driving force behind society well-being. The left-wing ideologue looks a the world as the collective being the driving force behind society well-being. So the left-wing ideologue believes taxes are never too high and spending is never the problem.

I happen to agree with you and not the collectivists. Individuals are the driving force behind society well-being. But that doesn't mean that tax cuts do not "cost" the government. It is the actions (tax cuts) which cause the outcome (deficit), not the lack of actions (no change in spending).

Individuals are the driving force. That, however, is not a right wing ideology, because I believe the individual always takes precedence over the government, even if it involves national security.

By the way, choosing not to reduce spending is an action, not a non action. What you are trying to do is frame a difference in voice as something else. Spending is what the government does, tax cuts are what happen to the government.

Looking at it this way, the choice is what type of government do we want. One that controls spending, or one that is controlled by taxes.

 

[NYcarbineer]

What the **** have I posted that makes you think I am a anything other than a genuine windbag? Not being restricted by anyone else's definitions of me or my beliefs I can honestly point out that the only thing, repeat the only thing, that increases the deficit is spending money that does not exist.

And cutting taxes decreases the amount of money that exists, so if that formerly existent money was paying for something, and you cut it, then that something is no longer paid for.

Therefore anyone advocating for cutting taxes without cutting spending is advocating an action that is, mathematically,

no different than someone who is advocating increased spending without increasing taxes.

How does cutting taxes reduce the money that exists? Does that mean that raising taxes increases the money supply? If it does, why does the fed have to print more money to make QEII work? all that would be necessary to stabilize the economy would be to allow the Busch tax cuts expire for everyone, and this would, somehow, magically increase the supply of money.

By the way, I will bet that you cannot find anywhere where I either advocated tax cuts, or not cutting spending to meet the reduced revenue.

1. You're collecting a billion dollars in annual revenue from a certain tax.

2. You lower the tax by 10%.

3. You're now collecting 900,000 from that tax, in other words, that tax now produces less revenue.

4. Whatever that tax was paying for is now short of money, thus, a deficit has been created by lowering that tax.

 

[Quantum Windbag]

And cutting taxes decreases the amount of money that exists, so if that formerly existent money was paying for something, and you cut it, then that something is no longer paid for.

Therefore anyone advocating for cutting taxes without cutting spending is advocating an action that is, mathematically,

no different than someone who is advocating increased spending without increasing taxes.

How does cutting taxes reduce the money that exists? Does that mean that raising taxes increases the money supply? If it does, why does the fed have to print more money to make QEII work? all that would be necessary to stabilize the economy would be to allow the Busch tax cuts expire for everyone, and this would, somehow, magically increase the supply of money.

By the way, I will bet that you cannot find anywhere where I either advocated tax cuts, or not cutting spending to meet the reduced revenue.

1. You're collecting a billion dollars in annual revenue from a certain tax.

2. You lower the tax by 10%.

3. You're now collecting 900,000 from that tax, in other words, that tax now produces less revenue.

4. Whatever that tax was paying for is now short of money, thus, a deficit has been created by lowering that tax.

The deficit is created if, and only if, you keep spending $1,000,000,000.00, which is $100,000,000.00 more than you have. That is how it works in the real world, unlike your fantasy world where the tax cut results in a loss of $999,100,000.00. If you work for the government I can understand why the budget never gets balanced.

 

[NYcarbineer]

How does cutting taxes reduce the money that exists? Does that mean that raising taxes increases the money supply? If it does, why does the fed have to print more money to make QEII work? all that would be necessary to stabilize the economy would be to allow the Busch tax cuts expire for everyone, and this would, somehow, magically increase the supply of money.

By the way, I will bet that you cannot find anywhere where I either advocated tax cuts, or not cutting spending to meet the reduced revenue.

1. You're collecting a billion dollars in annual revenue from a certain tax.

2. You lower the tax by 10%.

3. You're now collecting 900,000 from that tax, in other words, that tax now produces less revenue.

4. Whatever that tax was paying for is now short of money, thus, a deficit has been created by lowering that tax.

The deficit is created if, and only if, you keep spending $1,000,000,000.00, which is $100,000,000.00 more than you have. That is how it works in the real world, unlike your fantasy world where the tax cut results in a loss of $999,100,000.00. If you work for the government I can understand why the budget never gets balanced.

No kidding, which means, if these tax cuts and tax cut extension are not PAID FOR by simultaneously cutting spending

THEY WILL ADD TO THE DEFICT.

 

[8537]

Who's getting a tax cut? I just see no one is getting a tax increase.

as currently proposed in the compromise, anybody who works is getting a tax cut - specifically, a reduction of two percentage points off of their FICA contribution (applied to income up to about 102,000 annually). That equals a tax cut of a $1,000 for someone making 50K and $2,000 for a person making 100K.

Total booby trap.

When this "tax holiday" runs out, dems will whine and cry about how republicans will be then raising taxes on the much ballyhooed "working families".

Of course, republicans are stupid and will fall for it.

well of course! Just like Republicans whining and crying about how Democrats are raising taxes on the top 2%, the much ballyhooed "job creators".

And of course, Dems are stupid and they cave on it.

 

[Quantum Windbag]

1. You're collecting a billion dollars in annual revenue from a certain tax.

2. You lower the tax by 10%.

3. You're now collecting 900,000 from that tax, in other words, that tax now produces less revenue.

4. Whatever that tax was paying for is now short of money, thus, a deficit has been created by lowering that tax.

The deficit is created if, and only if, you keep spending $1,000,000,000.00, which is $100,000,000.00 more than you have. That is how it works in the real world, unlike your fantasy world where the tax cut results in a loss of $999,100,000.00. If you work for the government I can understand why the budget never gets balanced.

No kidding, which means, if these tax cuts and tax cut extension are not PAID FOR by simultaneously cutting spending

THEY WILL ADD TO THE DEFICT.

Tax cuts cannot be paid for. You do have to cut spending to match revenue, but that is not paying for anything, that is common sense.

 

[8537]

Right, but his company increases both the goods and services sold and the productive capacity of the economy. Everything else being equal, that would make money more valuable relative to goods - the same number of dollars chasing more goods. No new money required. Gate's share of that productive capacity increases (and in this example, his share of its representative, money)

Whose money supply went down as a result? Overall the average American lives better than the Vanderbilts did in their heyday. Who is paying for that vast concentration of resources? Who can you point to and say that, if not for Gates having all that money, this guy would have more?

Your confusing money supply with material wealth. My point is that the supply of money doesn't determine the productive capacity of the economy - it responds to that productive capacity.

The real-value of money is in its representation of that productive capacity and the goods and services it provides. No matter how many dollars one distributes, the fact remains that the resources acquirable with those dollars are finite, and rival. If I have the resource, you can not have the resource.

His actions increased the money supply, even if, as you argue, we accept that it is not in his direct control.

Then how did we manage to get the industrial revolution on a fixed money supply?

News flash, it doesn't have any value. It is a concept that exist only on paper and in our minds. Some stores do not even accept it, that alone proves it has no value.

news flash: it positively DOES have value - and one of its most important purposes is in storing that value. If you don't feel yours has value, I can PM you with a place to send that useless stuff. Just because some random store doesn't accept doesn't mean it's without value. By that definition, one would determine that an American Express card with a million dollar credit limit is useless because some stores don't take American Express.

 

[8537]

The deficit is created if, and only if, you keep spending $1,000,000,000.00, which is $100,000,000.00 more than you have. That is how it works in the real world, unlike your fantasy world where the tax cut results in a loss of $999,100,000.00. If you work for the government I can understand why the budget never gets balanced.

No kidding, which means, if these tax cuts and tax cut extension are not PAID FOR by simultaneously cutting spending

THEY WILL ADD TO THE DEFICT.

Tax cuts cannot be paid for. You do have to cut spending to match revenue, but that is not paying for anything, that is common sense.

How much do you think the stimulus bill cost?

 

[Quantum Windbag]

No kidding, which means, if these tax cuts and tax cut extension are not PAID FOR by simultaneously cutting spending

THEY WILL ADD TO THE DEFICT.

Tax cuts cannot be paid for. You do have to cut spending to match revenue, but that is not paying for anything, that is common sense.

How much do you think the stimulus bill cost?

If you go back through and read something besides the last post in this thread you will see I already answered that question.

 

[NYcarbineer]

The deficit is created if, and only if, you keep spending $1,000,000,000.00, which is $100,000,000.00 more than you have. That is how it works in the real world, unlike your fantasy world where the tax cut results in a loss of $999,100,000.00. If you work for the government I can understand why the budget never gets balanced.

No kidding, which means, if these tax cuts and tax cut extension are not PAID FOR by simultaneously cutting spending

THEY WILL ADD TO THE DEFICT.

Tax cuts cannot be paid for. You do have to cut spending to match revenue, but that is not paying for anything, that is common sense.

That is nonsense topped with gibberish. A tasty holiday treat for the profoundly inarticulate.

 

[Toro]

No. you are looking at me through a prism because I insist that things are simple when you want to make them complicated. Your prism, ideology, is different than mine, yet you insist that it does not exist, and, that because you disagree with it, it must be right wing.

Ideology has simple answers to complex questions. Ideology requires the adherent to look at the world through the prism of the ideology.

No, you are attempting to frame my argument that way. I am stating that revenues reductions are not payed for, they are something that exist. If you refuse to accept that the money is not there, and continue to spend like it is, you will eventually be forced to pay for the extra spending. However, if you accept that the money is not there, and live within your means, you will not have to pay for anything.

The money is there but we choose not to pay for it by choosing not to tax ourselves. We can afford it but choose not to pay for it. We choose to put it on our credit card rather than pay it out of cash flow.

I have been having to factor that into my tech business, and am reconsidering the way I supply myself with parts. I have been making cables rather than buying them ready made because it seemed less expensive to do it that way, but it appears that, if I factor in the lost time making the part compared to the time I could be doing something else that earns me revenue I might be wrong. Still a little iffy on the numbers, and if I factor in the fact that I enjoy the drudge work of making cables, and other parts, it might not be worth it, but the truth is it is probably as cost effective to buy even the smaller cables ready made.

Choosing between luxuries, and claiming that as an opportunity cost, is more problematic, in my opinion.

Cool story, thanks.

As a businessman, you know that profits are not merely a function of cost. If profits were only about costs, businessmen would do nothing but focus on costs. But you know that is not true. Businesses also focus on revenues. Profits are a function of costs AND revenues. Profits are not solely a function of costs. Profits are not solely a function of revenues. Profits are a function of both. If a business decides to stop selling into a profitable market, then the decision to stop selling into the market is the cause of the loss. Government is no different. If the government decides to forego revenue, it is the decision to stop taxing that causes the shortfall, just like the decision to stop selling into the market is why the business has the loss.