Scott SoCal said:
I'd like to know a little more about this anticipated revenue. Is this a CBO number? Does this 'anticipated revenue' take in to account less economic activity usually associated with higher taxes?
I don't know you would have to consult the CBO report. But yes, it's a fair question how they came to that number.
Scott SoCal said:
Would it surprise anyone to know that, since 1930, the US has experienced deficit spending in all but eight years over this period of time and only once since 1961 have we run a surplus? Additionally, would it surprise anyone to know that roughly 2/3rds of the total federal spending is for mandatory items (Social Security, Medicare, Medicaid, Interest on national debt)?
I think the piece debunks the myth of an "explosion" of debt, and that, if structural measures had been taken (prudently) over the last years, the current problems wouldn't have been half as bad. These remedies would most likely be on the taxation side of the equation, as experts could have predicted with reasonable accuracy, that government expenses would gradually increase over the years. Not matching that with increased revenues would have resulted in higher debts no matter what. Ultimately the debt issue was accelerated by the financial crisis (growth down/collapses, hence tax revenues down).
http://www.washingtonpost.com/wp-srv/special/politics/budget-2010/
Scott SoCal said:
We have a hole deep enough now that there will have to be a combination of tax increases, military budget cuts and cuts in entitlements (probably for future generations). My fear is the "new normal" for the US will be 8 - 9% unemployment for a decade or more. If this holds the growth in GNP will be 2 -3% per year (if that) and will compound budgetary pressures.
Most likely on the remedies. Regarding the unemployment rate, I don't have a clue. Given that the recovery is slow, there seems to be little chance that people will get hired at a faster rate then "new" people entering the labor market. Profits for many companies have remained surprisingly strong, so it seems that a lot have managed to do more with less. I don't see where employment will come from, although the USA has a pretty resilient market, which has shown to rebound quickly. High oil prices and a lagging Europe don't help, and I wouldn't be too confident about a series of trade agreements Congress has indicated it would take up.
Scott SoCal said:
It's probably a good time for a restructuring of the federal tax code. Perhaps a low flat rate for everyone above a threshold combined with a national sales tax. I am convinced our tax code does not work and one of the solutions will be to get at things like underground economies coupled with a rate of taxation that doesn't change every couple of years.
Restructuring certainly, although I don't know if flat tax rate is the solution. Get rid of the sales tax and replace it with VAT. The US tax code is the most confusing thing I have ever seen, but that's what you get when lobbyists are allowed to contribute to writing the tax code. There is an exemption for everything imaginable, and if you don't have a CPA on staff you would probably not even know how to claim them.
Congress should make it a goal to bankrupt turbo-tax...