Details of Budget Agreement

[richardhutnik]

mrstickball said:

richardhutnik said:

mrstickball said:

...Or recognize that the biggest earners are already paying their fair share (the top 1% pay 60% of income taxes), and that we have a spending problem, not a revenue problem.

Is it possible that maybe, just maybe, wealth and income has shifted so that the top have gotten an increasing percentage of the share, while the middle class and lower has gotten the same or less?  What do you think the tax structure and who pays what in taxes is like this, when income has remained flat or declined for the middle and lower classes, AND you want to maintain basic government services?  You do realize that past decade incomes have DECLINED for the average American, what the top few percent have seen very large increases in income, right?

As far as not a revenue problem, taxes as percentage of GDP is under 15% on the federal level.  This at a decades all-time low.  Saying revenue is a problem isn't only saying that taxes need to go up, but the economy stinks and there isn't enough money coming in.   Apparently tax cuts haven't been the answer either for stimulating job creation and getting things going where they matter either.

...You do realize that as the median income of the rich increase, so do their tax burden, right? The top 1% used to pay 40% of all income taxes in the 1980's. Today, its 55% and rising.

Taxes as a percentage of GDP didn't drop to 15%. It was 16% in 2010. Comparatively, the average in the last 50 years was 18.1%. Comparatively, government spending as a percentage of GDP is 26%. The average is 20.3%. Therefore, revenues are 2% below average, while spending is up nearly 6% from the average. Certainly, the tax revenue is a problem, but according to all data we have, it is only 25% of the problem. Therefore, fixing the problem means cutting spending needs to be 75% of the solution, and tax increases must be 25% of the solution.

And there is a connection.  Due to the economic slowdown, more people are falling behind and ending up things like foodstamps and medicare.  The economy is something where there is a degree of momentum involved, and when things go well, they build on themselves.  When they don't, then there is a problem.  It is a bit like, when times are good, the complaints are petty and people go quiet.  But go tough, and out come all the interest groups.

A problem we have today is that, ok spending needs to be cut 75% but go ahead and say you want to increase taxes by 25%?  That won't happen either.  You have a faction that wants to shrink the government to the size of a bathtub, so it can then drown it.  

Also, as percentage of GDP, FEDERAL taxes, as a percentage of GDP was below 15%.  Check Heritage Foundation chart on that:

http://www.heritage.org/budgetchartbook/current-tax-receipts

The 30 year average was around 18% according to that chart.  You can find it elsewhere also.