Budget deficit nearly 100 billion less than anticipated

[martinez]

In Australia we have record levels of taxation revenue reaching the government coffers, due to the increase in the price of oil. We pay a percentage at the pump based on the wholesale prcie of gasoline. This has lead to greater surpluses than predicted for the government. As a result they are offering up some changes to income tax, as in raising all the different thresholds so everyone gets a tax break. They are a conservative government practicing conservative fiscal policy.

The point of^^that drivel........Does the federal government in the U.S recieve the taxes from Gasoline, or is it all to do with the states as the sales taxes are?

 

[charrison]

Originally posted by: HombrePequeno

Originally posted by: charrison

Originally posted by: BaliBabyDoc
^^I'm not sure about your numbers but I agree with the perspective. Congress has vigorously debated the need to make cutbacks of several billion in a variety of domestic programs. Yet the debate over how much and how and why to fund the War on the Treasury has been strikingly muted.

Even the few brave souls that voted against it . . . still vote for it.

But there's no reason to worry . . . GDP growth will take care of all our problems.:roll:

The problem is the broken tax code. No profits are really escaping the IRS by having an office in the caymans. Even with a office in the caymans, all profits earned in the US are taxable by the IRS. However if say they have an office in the caymans and they have profits from operations in the US and Germany, they will not pay taxes based on German operations. However they will be paying the German IRS for those profits. But the interesting thing is, the German IRS will not tax a German company for profits made in the US. So without an offshore office, US companies are at a tax disadvantage when doing business abroad as they are taxed both at home and away.

Fix the tax code.

Taxes paid in other countries are a tax write-off here, I believe.

I dont beleive that is the case.

 

[jlmadyson]

Laffer's Victory

It's official ? Arthur Laffer wins. New data show federal revenues surged in the first three quarters of the current fiscal year. Corporate tax receipts are up more than 26% over the same period last year, ringing in at $250 billion. Individual income tax collections, at $791 billion, are up 14% over the first nine months of fiscal 2005. The Congressional Budget Office projects corporate tax receipts will total $330 billion by the end of the fiscal year. As a result, the deficit for the year is expected to be about $300 billion, down from $318 billion last year and $412 billion the year before.

What, you ask, has led to this miraculous event? A tax cut, it turns out. Or rather, an array of tax cuts, on corporate income, personal income, and capital gains. These tax cuts, passed in 2001 and 2003, appear to be having the desired effect of spurring economic growth by creating addition incentives for work and entrepreneurship. The latest numbers, moreover, offer some hard data to challenge some of the charges leveled against President Bush and congressional Republicans in respect of tax cuts. These tax cuts haven't exactly benefited "the rich." A third of those higher income-tax revenues came from the highest-earning 1% of households, according to the New York Times.

That said, the deficit is still projected to be $300 billion, even if that's lower than it might have been. The latest budget estimates, then, throw down a gauntlet to the alleged Republicans in Congress. Thanks to the incentives provided by the tax cuts, the rest of the economy is doing the best it can to make up the deficit through economic growth. But non-defense discretionary spending has increased by a third under President Bush. Supply-side tax cuts will not grow us out of a deficit unless the Congress can keep federal spending increases from outpacing economic growth. At least Republicans now have hard data to rebuff Democratic claims that tax increases are the solution to federal budget woes or that tax cuts favor "the rich." Thank you, Professor Laffer.

 

[Engineer]

Originally posted by: jlmadyson
Laffer's Victory

It's official ? Arthur Laffer wins. New data show federal revenues surged in the first three quarters of the current fiscal year. Corporate tax receipts are up more than 26% over the same period last year, ringing in at $250 billion. Individual income tax collections, at $791 billion, are up 14% over the first nine months of fiscal 2005. The Congressional Budget Office projects corporate tax receipts will total $330 billion by the end of the fiscal year. As a result, the deficit for the year is expected to be about $300 billion, down from $318 billion last year and $412 billion the year before.

What, you ask, has led to this miraculous event? A tax cut, it turns out. Or rather, an array of tax cuts, on corporate income, personal income, and capital gains. These tax cuts, passed in 2001 and 2003, appear to be having the desired effect of spurring economic growth by creating addition incentives for work and entrepreneurship. The latest numbers, moreover, offer some hard data to challenge some of the charges leveled against President Bush and congressional Republicans in respect of tax cuts. These tax cuts haven't exactly benefited "the rich." A third of those higher income-tax revenues came from the highest-earning 1% of households, according to the New York Times.

That said, the deficit is still projected to be $300 billion, even if that's lower than it might have been. The latest budget estimates, then, throw down a gauntlet to the alleged Republicans in Congress. Thanks to the incentives provided by the tax cuts, the rest of the economy is doing the best it can to make up the deficit through economic growth. But non-defense discretionary spending has increased by a third under President Bush. Supply-side tax cuts will not grow us out of a deficit unless the Congress can keep federal spending increases from outpacing economic growth. At least Republicans now have hard data to rebuff Democratic claims that tax increases are the solution to federal budget woes or that tax cuts favor "the rich." Thank you, Professor Laffer.

Woooo....tax revenues are just past where they were in 2001 and are the lowest % of GDP in 40 years. Also, if you can call 300-400 billion deficits a victory, then I guess...*shrugs*

 

[jlmadyson]

Originally posted by: Engineer

Originally posted by: jlmadyson
Laffer's Victory

It's official ? Arthur Laffer wins. New data show federal revenues surged in the first three quarters of the current fiscal year. Corporate tax receipts are up more than 26% over the same period last year, ringing in at $250 billion. Individual income tax collections, at $791 billion, are up 14% over the first nine months of fiscal 2005. The Congressional Budget Office projects corporate tax receipts will total $330 billion by the end of the fiscal year. As a result, the deficit for the year is expected to be about $300 billion, down from $318 billion last year and $412 billion the year before.

What, you ask, has led to this miraculous event? A tax cut, it turns out. Or rather, an array of tax cuts, on corporate income, personal income, and capital gains. These tax cuts, passed in 2001 and 2003, appear to be having the desired effect of spurring economic growth by creating addition incentives for work and entrepreneurship. The latest numbers, moreover, offer some hard data to challenge some of the charges leveled against President Bush and congressional Republicans in respect of tax cuts. These tax cuts haven't exactly benefited "the rich." A third of those higher income-tax revenues came from the highest-earning 1% of households, according to the New York Times.

That said, the deficit is still projected to be $300 billion, even if that's lower than it might have been. The latest budget estimates, then, throw down a gauntlet to the alleged Republicans in Congress. Thanks to the incentives provided by the tax cuts, the rest of the economy is doing the best it can to make up the deficit through economic growth. But non-defense discretionary spending has increased by a third under President Bush. Supply-side tax cuts will not grow us out of a deficit unless the Congress can keep federal spending increases from outpacing economic growth. At least Republicans now have hard data to rebuff Democratic claims that tax increases are the solution to federal budget woes or that tax cuts favor "the rich." Thank you, Professor Laffer.

Woooo....tax revenues are just past where they were in 2001 and are the lowest % of GDP in 40 years. Also, if you can call 300-400 billion deficits a victory, then I guess...*shrugs*

Big woopty doo is right, I certainly couldn't care less if they were the lowest in the last century compared to GDP, yes, bring the higher taxes for all, that is exactly what we should do, please. :laugh:

 

[CaptnKirk]

Stupid is as Stupid does

Another Mission 'Accomplished'

The release of the White House midsession budget review is an annual event normally marked by a few wonkish observations and the routine updating of various spreadsheets, not by a full-dress presidential dog-and-pony show. But President Bush plans to preside today, with members of Congress and invited guests in attendance. By all indications, including his own in his weekly radio address last Saturday, he plans to turn this into a celebration ? just in time for the fall campaign.

This is proof, if anyone still needs it, that this administration is desperate for something to boast about. On Mr. Bush?s watch, triple-digit budget surpluses have turned into annual triple-digit budget deficits. There?s no information in the midsession report to alter that utterly dispiriting fact. Yes, the report is expected to project that this year?s deficit will be somewhat less gargantuan than last year?s ? probably somewhere between $280 billion and $300 billion, versus a $318 billion shortfall in 2005. That?s not much to crow about.

But Mr. Bush is likely to gloat, anyway. Earlier this year, the administration conveniently projected a highly inflated deficit of $423 billion. With that as a starting point, the actual results can be spun to look as if they?re worth cheering.

The razzle-dazzle won?t end there. As he did in his remarks on Saturday, Mr. Bush is sure to use today?s event to credit tax cuts for a projected ?surge? in tax revenue. The Treasury is expected to take in about $250 billion more in 2006 than in 2005, for a total take of $2.4 trillion. Devoid of context, the number looks impressive.

In fact, it is $100 billion less than the $2.5 trillion revenue estimate the administration touted when it set out in 2001 to sell its policy of never-ending tax cuts. Even with this year?s bigger haul, real revenue growth during the Bush years will be abysmal, averaging about 0.3 percent per capita, versus an average of nearly 10 percent in all previous post-World War II business cycles. That might be excusable if the recent revenue improvements could reasonably be expected to continue. They cannot. Much of the increase in tax receipts is from corporate profits, high-income investors and super high-earning executives, sources that are just as unpredictable as the financial markets to which they?re inevitably linked.

So, the revenue surge is neither a sign that the tax cuts are working nor of sustainable economic growth. A growing number of economists, most prominently from the Congressional Budget Office, point out that upsurges in revenue are also the result of growing income inequality in the United States, an observation that is consistent with mounting evidence of a rapidly widening gap between the rich and everyone else. As corporations and high- income Americans claim ever more of the economic pie, revenues rise, even if there?s no increase in overall economic growth.

If Mr. Bush looked behind his headline numbers, he, too, could see that the rich are getting richer while the rest are, at best, only holding ground. It would make sense to use some of the windfall revenue to enact policies and programs that tilt against growing inequality. Unfortunately, he?s flogging more tax cuts that will deepen the divide.

 

[Engineer]

Originally posted by: jlmadyson

Big woopty doo is right, I certainly couldn't care less if they were the lowest in the last century compared to GDP, yes, bring the higher taxes for all, that is exactly what we should do, please. :laugh:

Just where did I say we should have higher taxes? How about lower spending? We'll all be "Laffing" when the baby boom generation goes through in a few years and the deficit situation of those years will make this seem like a picnic.

If you're going to spend the money, you had eventually better collect some of it to help pay for what you're spending. Of course, you could do what DC is doing right now and simply turn up the printing presses (orf course, you get runaway inflation at some point when doing that - possibly what we're seeing now).

Go ahead, "LAFF' it up. Maybe we can turn taxes to zero for infinite revenues too. But wait, Laffer curve doesn't suggest that, does it?

Anyone know what the economy would look like had there not been tax cuts? Nope. Not a damn one of you supply siders know. I do know one thing though, the deficit would have been much more contained.

Ah what the hell, deficits don't matter anyway. *shrugs again*

 

[jlmadyson]

Originally posted by: Engineer

Originally posted by: jlmadyson

Big woopty doo is right, I certainly couldn't care less if they were the lowest in the last century compared to GDP, yes, bring the higher taxes for all, that is exactly what we should do, please. :laugh:

Just where did I say we should have higher taxes? How about lower spending? We'll all be "Laffing" when the baby boom generation goes through in a few years and the deficit situation of those years will make this seem like a picnic.

If you're going to spend the money, you had eventually better collect some of it to help pay for what you're spending. Of course, you could do what DC is doing right now and simply turn up the printing presses (orf course, you get runaway inflation at some point when doing that - possibly what we're seeing now).

Go ahead, "LAFF' it up. Maybe we can turn taxes to zero for infinite revenues too. But wait, Laffer curve doesn't suggest that, does it?

Anyone know what the economy would look like had there not been tax cuts? Nope. Not a damn one of you supply siders know. I do know one thing though, the deficit would have been much more contained.

Ah what the hell, deficits don't matter anyway. *shrugs again*

If you?re going to sit here and complain about the tax revenues, oh what was it, "lowest % of GDP in 40 years" which is exactly what you said, I guess one would presume the one way to fix that. Higher taxes, yea, reducing government spending has absolutely nothing to do with that equation whatsoever. I'm all for lower government spending, but higher taxes, I think not.

 

[BaliBabyDoc]

Here's what's horribly wrong with Bush policy:

1) There's absolutely NO significant fiscal restraint on the spending side. Cuts in Medicaid and college loans are overwelmed by increased spending for Education. Proposed FUTURE cuts (in the rate of growth) of SS/Medicare will be dwarfed by the very real increase in Medicare expenditures due to the Drug Benefit. Further, we are spending nearly 1/4 of the federal budget on a failed foreign policy (WOT), weapon systems primarily useful for fighting countries that don't really want to fight (China, Russia), and developing a general military-industrial complex infrastructure that has little utility beyond its own incestuous impulses.

2) The increase in tax receipts allegedly due to Bush tax cuts aren't NET! The tax cuts themselves have already cost several hundred billion dollars. As deficit dollars, that means we also owe interest on it. Even Bush economists (the honest ones that eventually leave OMB/Council of Economic Advisors) admit that tax receipts will ebb and flow and are unlikely to recover their upfront costs much less total cost when you factor in interest costs.

3) No honest economist believes the primary reason for the economic recovery was Bush tax policy. Higher tax revenue is a function of the recovery. The recovery has a variety of inputs. Some are Bush policies (profligate federal spending, tax cuts) others are not (low inflation, loose Fed, increased company profits from improved productivity, consumer spending using secured/unsecured debt).

 

[Bowfinger]

Originally posted by: BaliBabyDoc
Here's what's horribly wrong with Bush policy:

1) There's absolutely NO significant fiscal restraint on the spending side. Cuts in Medicaid and college loans are overwelmed by increased spending for Education. Proposed FUTURE cuts (in the rate of growth) of SS/Medicare will be dwarfed by the very real increase in Medicare expenditures due to the Drug Benefit. Further, we are spending nearly 1/4 of the federal budget on a failed foreign policy (WOT), weapon systems primarily useful for fighting countries that don't really want to fight (China, Russia), and developing a general military-industrial complex infrastructure that has little utility beyond its own incestuous impulses.

2) The increase in tax receipts allegedly due to Bush tax cuts aren't NET! The tax cuts themselves have already cost several hundred billion dollars. As deficit dollars, that means we also owe interest on it. Even Bush economists (the honest ones that eventually leave OMB/Council of Economic Advisors) admit that tax receipts will ebb and flow and are unlikely to recover their upfront costs much less total cost when you factor in interest costs.

3) No honest economist believes the primary reason for the economic recovery was Bush tax policy. Higher tax revenue is a function of the recovery. The recovery has a variety of inputs. Some are Bush policies (profligate federal spending, tax cuts) others are not (low inflation, loose Fed, increased company profits from improved productivity, consumer spending using secured/unsecured debt).

Well said.

 

[theeedude]

Are we celebrating $300B deficit? When will people learn, Reaganomics doesn't work.

 

[dullard]

Originally posted by: BaliBabyDoc
Here's what's horribly wrong with Bush policy:

Well said. But you are talking to deaf ears. We saw this before with Reagan. Have the economy plummet, then when it returns to normal, suddenly you have the best president ever because the economy is growing.

If a fluctuating item drops 50%, and returns back to normal, it raised 100% in value*. Seems massive. But all it did was a normal fluctuation. It happens all the time - especially in the economy or stock market. To look at just one statistic (the 100% gain) and to ignore the 50% drop right before is just showing your own ignorance. True, I'd rather have that 100% gain than a 25% gain. So that gain is a good thing. But it doesn't make me estatic until it grows to beyond the previous mark.

I won't be truely happy until revenues are higher than in 2000 (inflation and population adjusted). We are still below 2000 levels in revenues. With inflation and popluation adjustements we should be nearly 20% higher than 2000 levels. We are still far from being at a good state. Revenues are heading in the right direction, but it isn't still anything to be excited about.

* I'm not saying the economy dropped 50%, I'm just using easy numbers.

 

[Genx87]

^
|
|

Or we can cut spending. If we had 20% higher revenue numbers, all I see is the politicians eyes opening up with glee as they have another 400 billion to play with, not that we would have a balanced budget.

I think it is kind of scary when we start measuring how good our economy is by how much revenue our federal govt pulls out of circulation to waste in its inefficiencies.

 

[dullard]

Originally posted by: Genx87
I think it is kind of scary when we start measuring how good our economy is by how much revenue our federal govt pulls out of circulation to waste in its inefficiencies.

There are two important issues at play here.

I'll be the first to agree with you, Genx87, that we need to stop wasteful spending. I'm sure there are tons of programs that we could agree to cut or eliminate and tons of programs that we'd disagree on. The fact remains that we should watch spending very closely and it does need cutting. To me revenue should be just enough in 10 years to match the spending needs in those 10 years. I don't think revenue should match spending each year because that is harmful to the economy and makes us inflexible to meet our needs. Thus, I'm happy to have some years of surplus and some years of deficits. But in a longer period (roughly 10 years), surpluses need to match deficits.

The second issue was brought up earlier in this thread and in other threads. Does cutting taxes increase tax revenue? So far, taxes were cut, and 1, 2, 3, 4, 5 years later revenues are still lower than they were (much lower if you include inflation and population growth). Maybe you can argue the effect takes longer, but eventually you'll have to give up on the idea. Cutting taxes does increase revenue in some cases - we just aren't in that region of the tax curve.

 

[HombrePequeno]

Originally posted by: charrison

Originally posted by: HombrePequeno

Originally posted by: charrison

Originally posted by: BaliBabyDoc
^^I'm not sure about your numbers but I agree with the perspective. Congress has vigorously debated the need to make cutbacks of several billion in a variety of domestic programs. Yet the debate over how much and how and why to fund the War on the Treasury has been strikingly muted.

Even the few brave souls that voted against it . . . still vote for it.

But there's no reason to worry . . . GDP growth will take care of all our problems.:roll:

The problem is the broken tax code. No profits are really escaping the IRS by having an office in the caymans. Even with a office in the caymans, all profits earned in the US are taxable by the IRS. However if say they have an office in the caymans and they have profits from operations in the US and Germany, they will not pay taxes based on German operations. However they will be paying the German IRS for those profits. But the interesting thing is, the German IRS will not tax a German company for profits made in the US. So without an offshore office, US companies are at a tax disadvantage when doing business abroad as they are taxed both at home and away.

Fix the tax code.

Taxes paid in other countries are a tax write-off here, I believe.

I dont beleive that is the case.

Any profits made in Germany would be subject to the German tax system and that amount paid in tax dollars would be written off for the US. That's what I recall from my accounting class and my econ class on taxation. I could be wrong though. If you want, I can look through my class notes.

Also, in regards to you blaming the democrats for the giant deficits in the 1980s...well Reagan could have always vetoed it. I don't think the giant tax cuts in 1982 helped the deficit much either. I agree with the tax cuts in 1982 but you have to push for some budget restraint. Sure, Laffer had some good ideas but I'm not sure if there is much information to show he was right in that case or for the 2001 and 2003 tax cuts (I've read reports that it actually decreased productivity and work incentives).

 

[charrison]

Originally posted by: HombrePequeno

Originally posted by: charrison

Originally posted by: HombrePequeno

Originally posted by: charrison

Originally posted by: BaliBabyDoc
^^I'm not sure about your numbers but I agree with the perspective. Congress has vigorously debated the need to make cutbacks of several billion in a variety of domestic programs. Yet the debate over how much and how and why to fund the War on the Treasury has been strikingly muted.

Even the few brave souls that voted against it . . . still vote for it.

But there's no reason to worry . . . GDP growth will take care of all our problems.:roll:

The problem is the broken tax code. No profits are really escaping the IRS by having an office in the caymans. Even with a office in the caymans, all profits earned in the US are taxable by the IRS. However if say they have an office in the caymans and they have profits from operations in the US and Germany, they will not pay taxes based on German operations. However they will be paying the German IRS for those profits. But the interesting thing is, the German IRS will not tax a German company for profits made in the US. So without an offshore office, US companies are at a tax disadvantage when doing business abroad as they are taxed both at home and away.

Fix the tax code.

Taxes paid in other countries are a tax write-off here, I believe.

I dont beleive that is the case.

Any profits made in Germany would be subject to the German tax system and that amount paid in tax dollars would be written off for the US. That's what I recall from my accounting class and my econ class on taxation. I could be wrong though. If you want, I can look through my class notes.

I have read several articles on this in the past and this is what they describe.

Also, in regards to you blaming the democrats for the giant deficits in the 1980s...well Reagan could have always vetoed it. I don't think the giant tax cuts in 1982 helped the deficit much either. I agree with the tax cuts in 1982 but you have to push for some budget restraint. Sure, Laffer had some good ideas but I'm not sure if there is much information to show he was right in that case or for the 2001 and 2003 tax cuts (I've read reports that it actually decreased productivity and work incentives).

I was not blaming democrats directly, but they did increase every budget that was sent to them by reagan and they had significant majorities at the time. They cannot walk away innocent.

Lower taxes have resulted in the rich paying more in taxes. This really is not even up for debate as the wealthy pay most of the income and the zero filers have been on a steady risen over the last couple of decades. High taxes cause money to seek to tax shelters, rather than be invested and taxed as it moves.

 

[Engineer]

Originally posted by: charrison

Lower taxes have resulted in the rich paying more in taxes. This really is not even up for debate as the wealthy pay most of the income and the zero filers have been on a steady risen over the last couple of decades. High taxes cause money to seek to tax shelters, rather than be invested and taxed as it moves.

Only because the rich are getting more money/compensation than ever and the general population's (i.e. middle class) wages/earnings are falling behind the tax curve.

 

[charrison]

Originally posted by: Engineer

Originally posted by: charrison

Lower taxes have resulted in the rich paying more in taxes. This really is not even up for debate as the wealthy pay most of the income and the zero filers have been on a steady risen over the last couple of decades. High taxes cause money to seek to tax shelters, rather than be invested and taxed as it moves.

Only because the rich are getting more money/compensation than ever and the general population's (i.e. middle class) wages/earnings are falling behind the tax curve.

There really is no sign of a middle class vanishing. Yes, wages have been flat a bit too long, but there is no indications that it is going to stay that way. IF anything the middle class is paying less in taxes as well.

 

[Engineer]

Originally posted by: charrison

Originally posted by: Engineer

Originally posted by: charrison

Lower taxes have resulted in the rich paying more in taxes. This really is not even up for debate as the wealthy pay most of the income and the zero filers have been on a steady risen over the last couple of decades. High taxes cause money to seek to tax shelters, rather than be invested and taxed as it moves.

Only because the rich are getting more money/compensation than ever and the general population's (i.e. middle class) wages/earnings are falling behind the tax curve.

There really is no sign of a middle class vanishing. Yes, wages have been flat a bit too long, but there is no indications that it is going to stay that way. IF anything the middle class is paying less in taxes as well.

That's what I said as for the middle class paying taxes. They are falling behind the tax curve and paying less because they are making less (Real wages). Corporation and the wealthy are the ones going up vs inflation in this economy, the the average Joe, hence the reason they are paying more taxes even with tax cuts directed squarely at them. Also, not to mention that corporations and the wealthy are paying lower marginal rates than just a few years ago really shows how much more they are raking in when looking at the tax figures.

No way to deny that the rich are getting richer and the middle class/poor class are falling.

 

[charrison]

Originally posted by: Engineer

Originally posted by: charrison

Originally posted by: Engineer

Originally posted by: charrison

Lower taxes have resulted in the rich paying more in taxes. This really is not even up for debate as the wealthy pay most of the income and the zero filers have been on a steady risen over the last couple of decades. High taxes cause money to seek to tax shelters, rather than be invested and taxed as it moves.

Only because the rich are getting more money/compensation than ever and the general population's (i.e. middle class) wages/earnings are falling behind the tax curve.

There really is no sign of a middle class vanishing. Yes, wages have been flat a bit too long, but there is no indications that it is going to stay that way. IF anything the middle class is paying less in taxes as well.

That's what I said as for the middle class paying taxes. They are falling behind the tax curve and paying less because they are making less (Real wages). Corporation and the wealthy are the ones going up vs inflation in this economy, the the average Joe, hence the reason they are paying more taxes even with tax cuts directed squarely at them. Also, not to mention that corporations and the wealthy are paying lower marginal rates than just a few years ago really shows how much more they are raking in when looking at the tax figures.

No way to deny that the rich are getting richer and the middle class/poor class are falling.

ON this we will disagree. The rich getting richer does not mean the middle class is going away. Someone posted an article here recently that stated the middle was more likely to move up than to move down. .

As far as the marginal rates go, marginal rates allow money to move from tax shelters back in the economy to be taxed. Keep the taxes too high and money will stay sheltered away from tax.

 

[wetech]

Originally posted by: charrison

Originally posted by: HombrePequeno

Originally posted by: charrison

Originally posted by: BaliBabyDoc
^^I'm not sure about your numbers but I agree with the perspective. Congress has vigorously debated the need to make cutbacks of several billion in a variety of domestic programs. Yet the debate over how much and how and why to fund the War on the Treasury has been strikingly muted.

Even the few brave souls that voted against it . . . still vote for it.

But there's no reason to worry . . . GDP growth will take care of all our problems.:roll:

The problem is the broken tax code. No profits are really escaping the IRS by having an office in the caymans. Even with a office in the caymans, all profits earned in the US are taxable by the IRS. However if say they have an office in the caymans and they have profits from operations in the US and Germany, they will not pay taxes based on German operations. However they will be paying the German IRS for those profits. But the interesting thing is, the German IRS will not tax a German company for profits made in the US. So without an offshore office, US companies are at a tax disadvantage when doing business abroad as they are taxed both at home and away.

Fix the tax code.

Taxes paid in other countries are a tax write-off here, I believe.

I dont beleive that is the case.

It is the case for individuals (I know because I'm one of them), but I'm not sure about corps.

 

[charrison]

Originally posted by: wetech

Originally posted by: charrison

Originally posted by: HombrePequeno

Originally posted by: charrison

Originally posted by: BaliBabyDoc
^^I'm not sure about your numbers but I agree with the perspective. Congress has vigorously debated the need to make cutbacks of several billion in a variety of domestic programs. Yet the debate over how much and how and why to fund the War on the Treasury has been strikingly muted.

Even the few brave souls that voted against it . . . still vote for it.

But there's no reason to worry . . . GDP growth will take care of all our problems.:roll:

The problem is the broken tax code. No profits are really escaping the IRS by having an office in the caymans. Even with a office in the caymans, all profits earned in the US are taxable by the IRS. However if say they have an office in the caymans and they have profits from operations in the US and Germany, they will not pay taxes based on German operations. However they will be paying the German IRS for those profits. But the interesting thing is, the German IRS will not tax a German company for profits made in the US. So without an offshore office, US companies are at a tax disadvantage when doing business abroad as they are taxed both at home and away.

Fix the tax code.

Taxes paid in other countries are a tax write-off here, I believe.

I dont beleive that is the case.

It is the case for individuals (I know because I'm one of them), but I'm not sure about corps.

Individual tax code is another different mess.