Tax Reform - 1950s Tax Code

[thegreekdog]

Question: Will taking the Internal Revenue Code back to how it was written in 1950 result in more tax revenue?

patches, Bernie - go!

[Bernie Sanders]

I'llsettle for the tax rates during the Clinton Administration. At least the Federal budget was showing budget surplus. The Bush tax cuts increased the budget deficit.

[patches70]

Question: Will taking the Internal Revenue Code back to how it was written in 1950 result in more tax revenue?

patches, Bernie - go!

Of course not. You know as well as I do, TGD, that no matter where the tax rate is set you still only get 19 or 20% of GDP.

[patches70]

I'llsettle for the tax rates during the Clinton Administration. At least the Federal budget was showing budget surplus. The Bush tax cuts increased the budget deficit.

You don't get deficits from cutting taxes, you get deficits from spending too much money! It doesn't matter what the tax rate is because you still get the same revenue no matter what. You wanna have budget surpluses, spend less money.

[patches70]

Oh, and TGD, since you started this thread you'll have to moderate it and decide who the winner is. If Bernie's argument for why the tax rate should be raised to 1950 levels and if that will make a difference, or my side of the argument where if you want to get rid of deficits instead of raising taxes you cut spending. Raising taxes won't get the government the money it needs for the levels of spending it does.

TGD will be the judge, jury and executioner. I have faith that you'll right through Bernie's platitudes of eat the rich for what they are, pandering.

[thegreekdog]

Since I'm the moderator, I have a few ground rules and general guidance:

(1) If we assume we want a balanced budget on a yearly basis (like most states have to do by the way), we have to have revenues equal to expenditures.

(2) The corporate tax rate in the United States is one of the highest, if not the highest, in the world.

(3) #2 doesn't really matter all that much because of how taxable income is calculated. For example, if I have $100 of income and I'm taxed at a 35% rate, that's $35 of tax. If I have a deduction for depreciation on one asset placed in service valued at $100, my income is now $0 and I pay 0 tax on a 35% rate.

(4) patches chart is accurate, but is sort of irrelevant since GDP also plays a role and also doesn't explain why raising rates doesn't equate to more taxes as a percentage of GDP.

(5) You guys have to agree on where tax revenues come from. This is not a matter of opinion, but it's unacceptable that one person in this debate is not going to know the factual answer to that question and will argue on that basis, rendering this discussion meaningless.

[patches70]

#5 first, the taxes are income from income taxes for my part of the discussion. If Bernie would like to expand that into capital gains, inheritance taxes, tariffs or other government revenues then you can go ahead and elaborate on those points and I'll counter at that point. Until further notice for my part this is about INCOME TAXES and more specifically MARGINAL TAX RATES.



As far as I can tell, I haven't heard Bernie Sanders advocating raising the corporate tax rate even though he frequently rails against corporations, so I'll ignore that aspect until he clarifies because as you say, the US has about the highest corporate tax rate in the world.

For how taxes work, I'd like to make sure that Bernie understands something and this is important. If there is, for instance, a 50% top marginal tax rate, that 50% doesn't kick in until the income reaches a specific level. Of that is how it worked back in the 50's.
So as an example, let's say the threshold is at $100,000. Anything over $100,000 is taxed at 50%. If you made $100,001 you wouldn't have to pay $50,000 in taxes. Your $100,00 would be taxed at the next lower bracket and the other $1 you'd have to pay fifty cents in tax.

So this is how I'm assuming Bernie is saying when he wants the top tax rates raised etc etc. Raised primarily on the rich. I'm going to leave out how the tax rates still end up hitting lower incomes because I'm pretty sure Bernie wants rich people's money and the poor can't be squeezed for much more than they already are.

The chart, as TGD says it's accurate and it doesn't explain why raising rates doesn't equate to more taxes as a percentage. What is shows is that if the government wants more tax revenue then it needs to get taxes out of a bigger pie. In the time frame of that chart the Marginal tax rates have been from 91% to the present 35%. It shows that the tax yield is independent of the marginal rates and that tax rates are directly proportional to the GDP. It means that if the government wants a bigger slice of pie then it needs to have a bigger pie. For further study, this is called "independence theorem". For study also (though TGD is already familiar with this I'm sure) Hauser's law and the Laffer curve.


TGD will judge that a wide variety of economists of all schools concede that tax hikes hurt GDP. Thus, according to Hauser's Law this lowers tax yields (you shrink the GDP, the government still gets the same 19.5% of GDP in revenue except that 19.5% comes from a smaller whole).


Now the part that gets important and why Bernie's 1950's tax just won't balance the budget. Because people act rationally. Simple as that. Raising taxes encourages people hide, shift, under report income. Higher taxes reduce incentive to work, invest and save and dampens overall economic activity. This is common knowledge among supply siders (as TGD is already aware) but might not be so intuitive to socialists like Bernie Sanders.

What Bernie Sanders (the real Bernie Sanders the politician) cannot understand is that capital migrates away from conditions where it is treated harshly. The capital controlled by the richest citizens is particularly tax-intolerant.

So before Bernie Sanders goes raising income taxes to punish the rich he should probably spend more time figuring out how to grow the GDP and overall economic activity. And you don't increase economic activity by taking more money from people....

[patches70]

Oh, one last thing in anticipation of Bernie's retort, below, a chart of the US GDP-





Bernie Sanders will come here and say that it was Bush tax cuts that caused the deficits and ruined Clinton's surpluses. As you can see the GDP is rising nicely during Clinton's term which results in nice tax revenues and the US not fighting major wars. It begins tanking though there in Bushes term, which hurts tax revenues and we're fighting major wars. The government cuts taxes, why? Because cutting taxes stimulates the economy.


Now this is government spending


and look what we find here, during Clinton's terms government spending decreases along with the above evidence of rising GDP (resulting in higher tax revenues aka Hauser's Law) and you get, lo and behold, budget surpluses!


I think until Bernie attempts to counter the evidence (through fantasy and platitude I imagine) I think it's pretty clear that the Marginal Rates don't really matter when it comes to a balanced budget, it comes down to spending less money.

[patches70]

Oh shit, and one more thing, and I'm done for a bit, since we are talking about income taxes, Bernie should acknowledge that the rich people, the really rich people, don't pay income taxes no matter what marginal rates you set because they don't make income. Those rich people make their money on capital gains. Raising the marginal income tax rates is only taxing those who work for a living and happen to make a decent salary.
These people aren't the filthy rich, these are the people who have started their own construction company and work hands on, 60 70 hours a week working their asses off so that they can retire comfortably and live their golden years worry free by sacrificing their time now. To take more from them is a horrible idea especially if you want to "soak the rich". Raising income taxes won't even bother the really rich fat cats that Bernie Sanders hates because they don't have to pay income taxes.

But that's a whole different thing and is something that is quite a bit different about today's economy and the 1950's economy. In the 1950's the US was an industrial based society, working people even the rich. Today the US is a financial based society as in our main industry is financial instruments and they rarely fall under income tax law. I may be explaining this a bit wrong, but TGD knows what I'm talking about.
That's why it seems to me a bit naive of Bernie Sanders thinking "If taxes were like they were in the 1950's it'd be great!" without even thinking about how the country has changed since 1950.

[thegreekdog]

Okay, since Bernie is not participating in this thread for some reason, I'm going to argue the case for higher taxes. Let's assume, even though it's definitely not true, that Bernie is not participating because he has no idea what he's talking about.

Caveats - I have simplified all of these things and disclaim any responsibility.

Contention One: The high tax rate of 35% is a fallacy. Most companies do not pay a 35% tax rate in the United States because of various deductions and credits granted to them by Congressional authority. These deductions and credits are commonly referred to as loopholes by ignorant people. In reality, they are carefully crafted pieces of legislation to benefit companies for economic reasons. So, if we do away with deductions and credits and leave the 35% tax rate the way it is, more tax will flow into federal coffers.

Contention Two: Rich people don't pay enough tax. Most rich people pay a tax on capital gains which is generally imposed at a rate of 15%. As we see above, that is less than the 35% that corporations and individuals earning income over a certain amount, pay in tax. So, if we raise the rate on capital gains, rich people will pay more of their fair share.

That's all I got. My (5) below, just so everyone knows...

http://www.pewresearch.org/fact-tank/20 ... o-be-fair/

And by design, wealthier Americans pay most of the nation’s total individual income taxes.

Adjusted gross income / % of taxes paid
Less than $15,000 - 0.2%
$15,000 to $29,999 - 1.5%
$30,000 to $49,999 - 4.5%
$50,000 to $99,999 - 16.1%

We can stop here - people making between $0 and $99,999 pay 22.3% of income taxes but file 85% of all tax returns. Let's continue...

$100,000 to $199,999 - 22.7%
$200,000 to $249,999 - 6.1%
$250,000 and above - 48.9%

People making above $100,000 pay 77.7% of income taxes but file 15% of all tax returns.

So, rich people already pay the most taxes. By far. And, because Player is going to come in here soon, they do not use more government resources (or at least 15% of the people don't use 77.7% of the resources).

[patches70]

Umm, ok, I'll accept the above but I have to ask you to clarify how that makes any difference at all to this-

(1) If we assume we want a balanced budget on a yearly basis (like most states have to do by the way), we have to have revenues equal to expenditures.

Are you claiming that by doing the above post will fulfill that first ground rule?

[patches70]

Also, a question-

Contention One: The high tax rate of 35% is a fallacy. Most companies do not pay a 35% tax rate in the United States because of various deductions and credits granted to them by Congressional authority. These deductions and credits are commonly referred to as loopholes by ignorant people. In reality, they are carefully crafted pieces of legislation to benefit companies for economic reasons. So, if we do away with deductions and credits and leave the 35% tax rate the way it is, more tax will flow into federal coffers.

Have you taken into account the consequences of doing the bolded and will those consequences affect italics?

For instance, states have done away with "loopholes" and as a rational response by certain corporations located within said states is to move somewhere where the tax burden is more friendly to the corporation's interests.
Doing this on a federal level wouldn't encourage corporations to simple relocate out of country?
Also, are you assuming that these crafted pieces of legislation benefit only the corporations to the complete detriment of the overall economy?
I would say that some (if not most) of those legislations though benefit the corporations they also benefit the entire economy in some ways. Removing those legislation also removes those benefits to the point where it becomes zero sum. I.E your tax revenue still only comes out to about 19.5% of GDP and removing those benefits causes GDP to shrink. I wouldn't be surprised that when those benefits to the corporations are removed we would find suddenly that those corporations would quickly begin reporting lower earnings....

Contention Two: Rich people don't pay enough tax. Most rich people pay a tax on capital gains which is generally imposed at a rate of 15%. As we see above, that is less than the 35% that corporations and individuals earning income over a certain amount, pay in tax. So, if we raise the rate on capital gains, rich people will pay more of their fair share.

Do regular people benefit from capital gains? Raising capital gains taxes doesn't hit just corporations, every single homeowner when selling their home will quickly learn how raising the capital gains taxes affects them.
Also, there are certain assets that are exempt from capital gains taxes, for good reason. Inflation hedges, protection from double taxation and incentive for investment in the future. The smart money will simple move more capital in such assets to avoid the increased capital gains taxes, which is a rational response after all.
To do away with those exemptions is to advocate for double taxation and stagnation upon investing in the future which have severe negative effects on the overall economy and hence, a severe negative effect upon tax yields.

[PLAYER57832]

I'llsettle for the tax rates during the Clinton Administration. At least the Federal budget was showing budget surplus. The Bush tax cuts increased the budget deficit.

You don't get deficits from cutting taxes, you get deficits from spending too much money! It doesn't matter what the tax rate is because you still get the same revenue no matter what. You wanna have budget surpluses, spend less money.

You need both. You cannot just cut when the real prices of many things, ranging from the materials and labor needed to fix roads to medical costs for Medicaid recipients to, well... name something that has NOT gone up in price. I am not saying that this means a budget should not be curtailed, I am saying that this call to constantly "cut, cut, cut" has to be paired with either "do without" (and I mean us, not the esoteric, remote entity folks like to pretend makes government) or a raise in income to cover what must be spent. The bit about not raising the debt limit shows basic ineptitude. You don't cut your credit card costs by not paying them, unless you really want to file for bankruptcy. You stop charging new costs and pay more on the debt.

That is the real issue here. Too many of the so-called "cuts" have really been paying less to the credit card companies, not really reducing costs. Just like when you only pay the minimum on your card, the cost passed on to each later administration keeps increasing.

Cutting education, cutting roads, not fully refunding the social security fund (borrowed from under Reagan), etc, etc... all of these things and much more are costs that will be born in the future, even are being born now (in some cases).

Per the initial question...
Its not a matter of one rate or another, its a matter of the whole package. We need to bring in more than we spend, including paying down our debt to some extent. (unlike in the real world, countries don't necessarily want zero debt, but it should not be stiflingly high).

People making above $100,000 pay 77.7% of income taxes but file 15% of all tax returns.

So, rich people already pay the most taxes. By far. And, because Player is going to come in here soon, they do not use more government resources (or at least 15% of the people don't use 77.7% of the resources).

lol.. saw this after I posted above. i might not be as set in my ways as you think. If you are referring to individuals, I actually would agree with you, to a point. If you refer to corporations, other businesses, then I don't necessarily. That said, I think the whole way we structure income tax (make that taxes in general) and what we use income tax to pay for is wrong.

[patches70]

Player, this is between me and TGD (since Bernie has decided to take the coward's way out). But I want to clear something up for you first-

materials and labor needed to fix roads

Discretionary spending

[b]medical costs for Medicaid recipients[b]

Mandatory spending

That is the real issue here. Too many of the so-called "cuts" have really been paying less to the credit card companies, not really reducing costs. Just like when you only pay the minimum on your card, the cost passed on to each later administration keeps increasing.

Mandatory spending

education,

discretionary spending



You might not realize, TGD does I bet, but it's important to know the difference between mandatory spending and discretionary spending.

The US could cut every single penny in discretionary spending, raise the marginal tax rate to 91% and it still wouldn't be enough to cover the entire mandatory spending.

Mandatory spending is not so easy to cut. Your "credit card" example, to government that is paying the interest on the debt. At the moment we are running ZIRP. TGD can explain more about that, but if you as an individual were to buy government bonds you'd be losing money because the interest on those bonds won't keep up with inflation. You'd literally be better off stuffing your money in a mattress than spending your money on bonds. Literally.
The FED is going to have no choice but soon to raise interest. Just a 1% increase to how much the government has to pay results in 100's of billions in additional interest payments and if the rates were at historic levels (around 6%) today the government would have to pay over $1trillion a year just on the interest payments on it's debt.

Mandatory spending today is in excess of $3.5 trillion+ a year and it's that low only because our debtors (the central banks) have been cutting the USG a break on interest payments for a few years now. The US GDP is around $17 trillion. The 19.5% that the government is going to collect no matter what you set the marginal tax rates just barely if even covers the mandatory spending. After the mandatory spending then comes the roads, the military, the war on terror, the surveillance programs, the spying, the TSA, Homeland security, PSA's, government grants and all the other little piddly stuff the government spends money on.

Medicare, medicaid and social security are the biggest pieces of the mandatory spending pie and the rate they are growing no amount of tax revenue is going to keep up.
Mandatory spending isn't so easy to cut because those are the expenses that the government by law must pay. It's not a budget decision to cut those programs, those are acts of Congress to pass laws. So basically, Congress has to pass laws that in effect are saying- "Oh, so sorry, we promised to pay but now were are reneging on those promises". You see the problem, right?
And all this with the government claiming virtually zero inflation (remember, you said things are just getting more expensive, well not according to official government statistics...).
Now you know and I know that's bullshit, of course there's inflation and if the government actually calculated that inflation fairly all that mandatory spending would blast off so quick it'd make our heads spin.

You can't cut the mandatory spending, the shortfall has to come out of discretionary spending which includes a lot of your pet programs.

Don't blame me, I didn't create this system. Don't blame the politicians, they are just doing what the voters wanted. There is no one to blame, it just is what it is, reality and unsustainable no matter what fuzzy logic as you try to apply as "a little of both, cut and raise taxes". Ha!
There is only one way this ends. TGD knows it, don't ya TGD?

[thegreekdog]

lol.. saw this after I posted above. i might not be as set in my ways as you think. If you are referring to individuals, I actually would agree with you, to a point. If you refer to corporations, other businesses, then I don't necessarily. That said, I think the whole way we structure income tax (make that taxes in general) and what we use income tax to pay for is wrong.

The problem with "other business taxes" and corporate taxes is how they work. If a corporation pays tax on $1, that $1 will also eventually be taxed to an individual owning shares in that corporation. So that $1 is taxed twice. For "other business taxes" the tax cost is passed through to consumers in some fashion. So, it all falls on individuals at the end of the day. What Democrats allegedly want is for rich people to pay more taxes (or, alternatively, for the federal government to borrow more money). They will not get rich people to pay more taxes by taxing corporations (in my humble and novice opinion).

[thegreekdog]

@patches - I'm not going to get into this discussion with you any more than I already have. The question I posed (even if not explicitly) was whether higher taxes would pay for spending. I have not seen any legislation considered by Congress that would do that.

[Bernie Sanders]

Okay, since Bernie is not participating in this thread for some reason, I'm going to argue the case for higher taxes. Let's assume, even though it's definitely not true, that Bernie is not participating because he has no idea what he's talking about.

Caveats - I have simplified all of these things and disclaim any responsibility.

Contention One: The high tax rate of 35% is a fallacy. Most companies do not pay a 35% tax rate in the United States because of various deductions and credits granted to them by Congressional authority. These deductions and credits are commonly referred to as loopholes by ignorant people. In reality, they are carefully crafted pieces of legislation to benefit companies for economic reasons. So, if we do away with deductions and credits and leave the 35% tax rate the way it is, more tax will flow into federal coffers.

Contention Two: Rich people don't pay enough tax. Most rich people pay a tax on capital gains which is generally imposed at a rate of 15%. As we see above, that is less than the 35% that corporations and individuals earning income over a certain amount, pay in tax. So, if we raise the rate on capital gains, rich people will pay more of their fair share.

That's all I got. My (5) below, just so everyone knows...

http://www.pewresearch.org/fact-tank/20 ... o-be-fair/

And by design, wealthier Americans pay most of the nation’s total individual income taxes.

Adjusted gross income / % of taxes paid
Less than $15,000 - 0.2%
$15,000 to $29,999 - 1.5%
$30,000 to $49,999 - 4.5%
$50,000 to $99,999 - 16.1%

We can stop here - people making between $0 and $99,999 pay 22.3% of income taxes but file 85% of all tax returns. Let's continue...

$100,000 to $199,999 - 22.7%
$200,000 to $249,999 - 6.1%
$250,000 and above - 48.9%

People making above $100,000 pay 77.7% of income taxes but file 15% of all tax returns.

So, rich people already pay the most taxes. By far. And, because Player is going to come in here soon, they do not use more government resources (or at least 15% of the people don't use 77.7% of the resources).

Sorry, went to Chicago yesterday and its hard for me to post on the phone. Need time to digest patches trickle down economics and rid my brain of alcohol poisoning.

[patches70]

@patches - I'm not going to get into this discussion with you any more than I already have. The question I posed (even if not explicitly) was whether higher taxes would pay for spending. I have not seen any legislation considered by Congress that would do that.

Nor have I.

[PLAYER57832]

lol.. saw this after I posted above. i might not be as set in my ways as you think. If you are referring to individuals, I actually would agree with you, to a point. If you refer to corporations, other businesses, then I don't necessarily. That said, I think the whole way we structure income tax (make that taxes in general) and what we use income tax to pay for is wrong.

The problem with "other business taxes" and corporate taxes is how they work. If a corporation pays tax on $1, that $1 will also eventually be taxed to an individual owning shares in that corporation. So that $1 is taxed twice. For "other business taxes" the tax cost is passed through to consumers in some fashion. So, it all falls on individuals at the end of the day. What Democrats allegedly want is for rich people to pay more taxes (or, alternatively, for the federal government to borrow more money). They will not get rich people to pay more taxes by taxing corporations (in my humble and novice opinion).

OK, from the outset, I disagree with your lumping stocks, stock dividends and sales profits together. I also disagree with your assessment of "double tax", though its sort of a semantic discussion.

I think a big problem in our society/economy is this idea of stocks as a "product" that should be "maximized for profit" much like any other product. Stocks are not a product. They are an ownership share of a company that produces some product, service, etc. The thing is stock sales are not conducted like other types of sales. Many companies today seem to exist solely to make profit from not even just high dividends, but the sale of the stocks themselves. This is fundamentally flawed. That kind of income is not beneficial (when done for its own sake... not saying company sales is always bad, but this idea of stocks as basically nothing more than another type of market product is harmful).

Pretend a company is food. You can make a lot of pretty quick profit from selling candy bars and cookies. You can make a lot of money from these sales. Go to your local sporting event or movie theater and you don't see much high-priced broccoli. Its candy, popcorn and sodas (along with a few hotdogs and pizza, of course) you see. That is why girl scouts sell cookies. Stock dividends are like cookies. Nice to have, very, very attractive, but your basic cookie is not something you can live on with health for very long. The "meat and potatoes" are research and investments, including employees. In society, the meat and potatoes are education, law enforcement, firefighting, transportation, medical care, etc. (I also firmly insert things like parks and things oriented to protecting our environment, but don't want to get bogged down in that side discussion here).

Our whole current tax structure is more or less based on the idea that we need to encourage production, use of resources, and sales of ... anything at all. My argument is that whole concept is just wrong, and this is far from just my idea.

For me, the whole talk of whether rich people should pay more or less is a side argument. The biggest point is that we need to, almost all of us, be net producers, not consumers of taxes. Those at the lowest end have to, by necessity, be excluded. The balance of that is that people at the top do have to pay a bit more. However, its not enough to just say "lets tax those who make more, more". We need a fundamental change in how our taxes, retirement system, medical system, etc are all run. (and yes, I do tie those together, to a point).

[PLAYER57832]

You might not realize, TGD does I bet, but it's important to know the difference between mandatory spending and discretionary spending.

I believe I do know the difference.

I strongly disagree with several of your labels, though, and that is the point. To many politicians, and the populace, based on their actions if not their words, "discretionary spending" is anything they don't like and "mandatory spending" is anything they like.

To me, while I absolutely agree that we HAVE to pay for things to which we are already obligated, we cannot pretend that what has been spent in the past is OK or the best way to go. We cannot ignore the future. I suspect there is an age difference partially coming into play, though it may be other things.

When you are young, the idea of saving for retirement seems irrelevant, not the best use of your funds, and is often the first thing people cut out. Medical insurance and the like also tend to take second fiddle to what younger folks see as, if not truly more important, at least more immediate needs. The trouble? That "someday I will need this and will deal with it then" creeps up pretty quickly. That is why we have almost a generation of people who have saved far less than they need for their retirement, why borrowing from the Social Security trust fund was allowed, etc. And, the worst part about it is that a very minimal of savings back when they were 20 and did not care so much would have paid off multiples of what any savings now can possible yield.

If you ever go to a real, intelligent financial adviser (that is, not someone calling themselves that in the guise of selling insurance or other products and not the bottom of the barrel), they will tell you that, along with putting spending to the real , bare minimum, you need to pay yourself FIRST. You start by building up an emergency fund, even if it means just paying the minimum on your credit cards for a time. Education, things like car and house repairs may or may not be mandatory, depending on your situation. If your roof is leaking, ignoring it will just lead to a higher bill. If you don't have a GED or any real skill, then education may well pay off, be a high priority that enables you to make more money (that is why educational debt, mortgage debt are typically considered different from, say, credit card debt). There is some debate over whether to pay down your credit card or save for retirement next, but the reasoning for hat differs from that of the broader US economy. If you can pay down your debt and KEEP from building it up again, then the interest savings on your debt is more than you could get from supplemented retirement savings. If you cannot stop spending, though.. you HAVE to save for retirement. Also, if your employer, say, matches your 401K contributions, then you want to at least put in enough to maximize that match. Education is where the biggest difference lies. See, the standard argument is to pay for retirement before your kids' education, because, among other issues, there aren't any scholarships or grants for retirement. Also, young adults can work, even if generally not for the money older people can make. In the government, we are not talking about parents versus children, we are talking about one essential "unit". The population MUST be educated. There are grants for individual families, but not for an uneducated population to suddenly be educated, not really. (actually, that is sort of what foreign aid is supposed to do, but that won't apply to the US.. no one is going to bail US out). Failing to fund the education means failing to fund the future, is part of failing to fund retirement for society. Similarly, failing to build/maintain roads and transport cost, in the long run, far more than the benefit of the initial savings.

The US could cut every single penny in discretionary spending, raise the marginal tax rate to 91% and it still wouldn't be enough to cover the entire mandatory spending.

Its not a question of more or less, its a question of changing our entire approach.

The FED is going to have no choice but soon to raise interest. Just a 1% increase to how much the government has to pay results in 100's of billions in additional interest payments and if the rates were at historic levels (around 6%) today the government would have to pay over $1trillion a year just on the interest payments on it's debt.

They are, but that is a different issue, or sort of. I would say that the measures you use, that are being use to gauge this probably need to change. That is, how we measure GDP, economic growth (whether that, in and of itself, should even be a goal), etc are all in error to the point of not just being useless, of being actually harmful. Just as an example, minerals and natural resources not being used are not even counted and the profit from the sale of same does not take into account anywhere near the damage or ultimate costs from their use. That's not environmental poppycock or left wing blather, its reality. Its true conservatism to say that we need to START by making sure we are not increasing our future debt by ignoring problems. Intelligent people don't decide to use the walls or roof of their house for fuel, even if they are cold and hungry. If you are at the point when that seems logical, then you are already lost! Similarly, you cannot just decide not to pay for garbage pickup and let it accumulate in your house.. not for very long if you want to stay healthy, anyway. You can decide to compost and otherwise limit the garbage you put out. We have been very much making both types of errors in our economy --both burning our house for fuel and just deciding to ignore the garbage pile up. (literally and figuratively, both)

Don't blame me, I didn't create this system.

You do need to look beyond what you have been taught. NONE of the standard answers are going to work. We need to completely change our approach. When you are in debt up to your gills, you can declare bankruptcy, but unless you actually change what you do, most likely you will just wind up there again. Countries cannot really "go bankrupt". Or, when they do it is far more consequential, truly consequential than if you or I were to do so. It generally means war is not far behind.

Don't blame the politicians, they are just doing what the voters wanted. There is no one to blame, it just is what it is, reality and unsustainable no matter what fuzzy logic as you try to apply as "a little of both, cut and raise taxes". Ha!
There is only one way this ends. TGD knows it, don't ya TGD?

No, I very much DO blame the politicians, and the people who keep electing them. I also blame our educational system, which is being more and more stripped of the science, particularly natural science, that provides the knowledge kids will need, that wee need, to truly solve these issues.

[thegreekdog]

OK, from the outset, I disagree with your lumping stocks, stock dividends and sales profits together. I also disagree with your assessment of "double tax", though its sort of a semantic discussion.

I don't think I lumped stocks, dividends, and sales profits together. I guess a basic understanding of the Internal Revenue Code is necessary here and I should not assume everyone knows it.

As to your second sentence, it is not something with which you can disagree. It is fact. Corporations have owners. Those owners are shareholders, usually individuals; if the owners are entities, the owners of those entities are individuals (etc.). In any event, the ultimate owners of any business are individuals. So if a corporation earns $100 of income, that income is taxed at the corporate level. If that $100 (less taxes) is distributed to the owner, an individual, it is taxed again to that individual. Hence, it is taxed twice. If, however, the business is a partnership (or other passthrough entity), the $100 is taxed once, at the individual level.

Our whole current tax structure is more or less based on the idea that we need to encourage production, use of resources, and sales of ... anything at all. My argument is that whole concept is just wrong, and this is far from just my idea.

I think the tax code works that way to a certain extent. Non-cynics would say that the tax code also works as a public policy encouraging device. For example, we have non-profit entities (or exempt organizations). As another example, we have credits and deductions for environmentally friendly products and activities. Depending upon Congress or the president, these public policies may be different. However, most politicians want to encourage some sort of manufacturing and/or technology jobs. I find this weird since the US economy is mainly a service economy, but whatever.

I don't disagree with the rest of your post.

[warmonger1981]

Tax codes mean nothing when you have a Federal Reserve that dictates interest rates. Or maybe getting lobbyists out of government. This argument of 1950's tax code means nothing.

[Bernie Sanders]

Tax codes mean nothing when you have a Federal Reserve that dictates interest rates. Or maybe getting lobbyists out of government. This argument of 1950's tax code means nothing.

Blaming the Federal Reserve Board for what?

We are all on the same page with lobbyists, but try getting the Republicans and some of the corporate Democrats to actually vote to kick the lobbyist out of the Capital is just a waste of your breath.

Other than that, warmonger is a waste of cyberspace.

[warmonger1981]

Obviously Bernie has no understanding of the Federal Reserve and its power. I notice you lump all Republicans in one box and only SOME of the Democrats as being corporate whores. So if something seems impossible do nothing? Just sit there and hold ones breathe? It's funny acting like returning the tax code to the 1950's style will do anything. One must go to the root of the problem. The problem is a private bank lending money to a country with interest. Silly old man. Your Woodrow Wilson style of progressivism is dead.

The only thing I wasted was about a tablespoon worth on your mothers lips.

[Bernie Sanders]

Obviously Bernie has no understanding of the Federal Reserve and its power. I notice you lump all Republicans in one box and only SOME of the Democrats as being corporate whores. So if something seems impossible do nothing? Just sit there and hold ones breathe? It's funny acting like returning the tax code to the 1950's style will do anything. One must go to the root of the problem. The problem is a private bank lending money to a country with interest. Silly old man. Your Woodrow Wilson style of progressivism is dead.

The only thing I wasted was about a tablespoon worth on your mothers lips.

I can lump all the spineless Republicans together. They either tow the "trickle down economics" line or the extremists will run a far right candidate against them.