PSA: Raising taxes to their highest level in history would leave us with a deficit

[ProfJohn]

Just thought I would clear this up since so many people seem to miss this simple fact.

The HIGHEST amount of money ever raised by this country (in terms of GDP) was 20.9% in 1944. The second highest ever was 20.6% raised in 2000 due to the tech bubble. Third highest would be 20.4% in 1945.

Those three years are the ONLY time in our history that we raised more than 20% of our GDP in the form of taxes.

So even if we raised taxes to their HIGHEST level in our entire history we would still be looking at a massive deficit.

So would you liberals please stop crying about the Bush tax cuts as if they are the root cause of our problems.

Even if we returned revenue to the Bill Clinton era 19% range we would STILL be looking at a deficit in the $500-700 billion range.

http://www.gpoaccess.gov/usbudget/fy11/pdf/hist.pdf

 

[sMiLeYz]

...but it would still be alot less of a deficit.

 

[Craig234]

Well, let's just get rid of all taxes, then.

No one's saying that reversing the irresponsible Bush tax cuts would eliminate the deficit. It would reduce it, and have many other benefits reducing wealth concentration.

Nice straw man. 'If it doesn't balance the budget - forget it!'

 

[Craig234]

smileyz, thanks for finding that graph, though people like PJ are unable to read it, it seems.

 

[sMiLeYz]

Well, let's just get rid of all taxes, then.

No one's saying that reversing the irresponsible Bush tax cuts would eliminate the deficit. It would reduce it, and have many other benefits reducing wealth concentration.

Nice straw man. 'If it doesn't balance the budget - forget it!'

Truth.

 

[Craig234]

PJ's friends at The Heritage Foundation on the Bush Tax Cuts:

Effectively pay off the federal debt. The Bush plan would decrease federal debt to the lowest possible level at which it could be redeemed--$818 billion in FY 2011 (see Chart 4).25 From FY 2001 to FY 2011, federal debt as a percentage of GDP would decline from 30.5 percent to just 4.7 percent under the plan.

Hey, I'll vote for that. Lower taxes, the debt is paid off!

 

[Jaskalas]

Even if we returned revenue to the Bill Clinton era 19% range we would STILL be looking at a deficit in the $500-700 billion range.

Does that argument help?

$500-700 billion in cuts are much more reasonable than $1.8 trillion.

 

[sMiLeYz]

Does that argument help?

$500-700 billion in cuts are much more reasonable than $1.8 trillion.

He is saying we'll still have a deficit, but a much smaller one with tax raises.

But he misses the point.

Even most conservative economists believe that deficit spending is necessary to allow a country to maximize their resources. When deficit spending is out of control, and out of line with revenue that's when we start running into problems.

 

[ProfJohn]

FYI the Bush tax cuts are NOT the main reason for the drop in revenue in the last 3 years.

The recession is by far the largest reason for the decline in revenue. Revenue dropped $100 billion between 2000 and 2001 due to the 2001 recession. By 2002 revenue had dropped $300 billion off its 2000 peak.

 

[ProfJohn]

He is saying we'll still have a deficit, but a much smaller one with tax raises.

But he misses the point.

Even most conservative economists believe that deficit spending is necessary to allow a country to maximize their resources. When deficit spending is out of control, and out of line with revenue that's when we start running into problems.

Which is the situation that we are in now.

And on top of that we have long term problems that are going to kill us in the future if we don't make some major changes soon. Greece should be a warning to us, but we have yet to learn from their disaster.

 

[ProfJohn]

...but it would still be alot less of a deficit.

From a 2010 Washington Post piece:
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/30/AR2010073002671.html

4. The Bush tax cuts are the main cause of the budget deficit.

Although the cuts were large and drove revenue down sharply, they are not the main cause of the sizable deficit that exists today. In 2007, well after the tax cuts took effect, the budget deficit stood at 1.2 percent of GDP. By 2009, it had increased to 9.9 percent of the economy. The Bush tax cuts didn't change between 2007 and 2009, so clearly something else is to blame.

The main culprit was the recession -- and the responses it inspired. As the economy shrank, tax revenue plummeted. The cost of the bank bailouts and stimulus packages further added to the deficit. In fact, an analysis by the Center on Budget and Policy Priorities indicates that the Bush tax cuts account for only about 25 percent of the deficit this year.

That is 25% of a $1.4 trillion deficit or perhaps $350 billion.

 

[sMiLeYz]

Which is the situation that we are in now.

And on top of that we have long term problems that are going to kill us in the future if we don't make some major changes soon. Greece should be a warning to us, but we have yet to learn from their disaster.

Greece is a small economy, they can't devalue their currency aka the Euro to grow themselves out of a crisis and don't have much international trade and they have some spectacularly bad policies that were much worst than Bush's over the years.

The US is the number one and most dynamic economy in the world, we print our own currency, our debt is IN our own currency and we can devalue it. Not comparable.

You said yourself that dropping revenue is a huge reason, and obviously you don't like deficit spending. So the solution is pretty simple: raise taxes.

 

[First]

lmao. Only a fake ass fiscal neocon would claim shaving off hundreds of billions from the federal debt in a 1 year period "really isn't that much" because it doesn't eliminate the deficit. No one is even talking about eliminating the deficit, that's pure stupidity. Businesses don't run that way, the vast majority are constantly in debt because debt financing is smart. Most businesses make sure they're not in massive debt, and the gov't should make sure they aren't either. Not no fucking debt. LOL.

Another funny, sad, but mostly terrible PJ thread.

 

[senseamp]

...but it would still be alot less of a deficit.

Yep, for all the Republican lying about how we had so much stimulus, the "recovery measures" section is minuscule.

 

[Schadenfroh]

That is why we need to end all of the Bush tax cuts (including those on the "middle class") AND slash social welfare and defense spending.

 

[Doppel]

From a 2010 Washington Post piece:
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/30/AR2010073002671.html


That is 25% of a $1.4 trillion deficit or perhaps $350 billion.

This graph starts in 2009, not 2007, and it shows that the tax cuts become a far larger piece of the pie. The simple fact is that graph won the thread immediately and there is no counter-argument, that's it.

The sad thing is you spend a lot of time defending people who you'll never be a part of. Has to be one of the greatest cons, that the ultra rich have convinced the masses to support their low taxes at the same time as selling some fantasy that one day they may be that rich to and/or benefit in some other unproven way. How many more decades will this chicanery keep working for?

 

[Jhhnn]

While Repub mouthpieces are preaching austerity for the masses, their heroes & financiers are paying record low tax rates-

http://billionaires.forbes.com/article/02XF6DZ5fx7KF?q=Warren+Buffett

Austerity & taxes are for little people, not for the super rich...

And there's this-

http://www.economicpopulist.org/content/corporate-profits-soaring-thanks-record-unemployment

 

[wuliheron]

While Repub mouthpieces are preaching austerity for the masses, their heroes & financiers are paying record low tax rates-

http://billionaires.forbes.com/article/02XF6DZ5fx7KF?q=Warren+Buffett

Austerity & taxes are for little people, not for the super rich...

And there's this-

http://www.economicpopulist.org/content/corporate-profits-soaring-thanks-record-unemployment

They aren't just still paying record low taxes, they're still raking in the big bucks and passing out million dollar bonuses. Corporate America is right about where it was profit wise before the recession. Why should they be worried about the economy when taxes are the only real threat they have to their bottom line.

 

[soundforbjt]

If corps & the really rich paid their share of taxes, we'd be better off as well. Those that complain about the high corporate tax rates should look at the top 12 corps and see how much they paid this year, hint a negative amount, they got money.

Capital gains needs to be raised as well. It's time for the real welfare queens to pay their share.

 

[Craig234]

More PSAs from ProfJohn:

PSA: Laws against murder will not end all murders

PSA: Using umbrella will not entirely prevent getting wet

PSA: Fighting al queda will not end all terrorism

This guy fights very hard for billionares to get richer at others' expense, for some reason.

 

[Chaotic42]

That is why we need to end all of the Bush tax cuts (including those on the "middle class") AND slash social welfare and defense spending.

I agree. We have a problem and it will only be solved by cutting spending *and* raising taxes. Unless you all have another internet-type economy game changer up your sleeves.

 

[Craig234]

I agree. We have a problem and it will only be solved by cutting spending *and* raising taxes. Unless you all have another internet-type economy game changer up your sleeves.

Republican plan: cut spending for everyone but the rich; always give higher tax cuts for the rich.

Democratic plan: End Bush tax cuts that were all borrowed, added to the debt; cut spending, prioritizing the giveaways to the rich; increase efficiencies and reform.

For example, end the ban on Medicare negotiating drug prices; shift away from fee for service Medicare; remove many tax deduction; increase enforcement against fraud.

Reduce the deficit after a period of stimulus to get out of the recession.

Republican straw man: Democrats want to tax all your money and waste it and increase all wasteful spending.

 

[ProfJohn]

This graph starts in 2009, not 2007, and it shows that the tax cuts become a far larger piece of the pie. The simple fact is that graph won the thread immediately and there is no counter-argument, that's it.

The graph is BS and is based on guesses.

If you actually believe that graph to be gospel then let me provide you with another graph and you can explain to me what happened.

 

[soundforbjt]

^^^Simple the rich have'nt created any jobs and the banks hung onto their money.

They aren't rich because they're stupid, just greedy.

 

[Chaotic42]

Republican plan: cut spending for everyone but the rich; always give higher tax cuts for the rich.

Democratic plan: End Bush tax cuts that were all borrowed, added to the debt; cut spending, prioritizing the giveaways to the rich; increase efficiencies and reform.

For example, end the ban on Medicare negotiating drug prices; shift away from fee for service Medicare; remove many tax deduction; increase enforcement against fraud.

Reduce the deficit after a period of stimulus to get out of the recession.

Republican straw man: Democrats want to tax all your money and waste it and increase all wasteful spending.

I think we need to decide what kind of economy we want and what kind of political system we want. Either we want more social programs and equality and pay for it, or we want more opportunities for business with lower taxes and we cut spending. We can't have it both ways.

We also need to discuss the role of the states versus the federal government in all of this and whether we want that role to change or not.