How the US Government Buys Votes

[HappySqurriel]

kanageddaamen said:

HappySqurriel said:

In the short run (a few years) tax revenues may be impacted by tax rates, but they trend towards the average as the increase/decrease in money in the economy has its impact on spending and investment.

Lower corporate and income taxes lead to greater economic growth and higher wages, which translate into higher tax revenues; higher corporate and personal income taxes lead to lower economic growth and lower wages, which translate into lower tax revenues.

That is what I am talking about, a few years of going back to the 90s tax rate levels, as well as taxing income AS income , combined with intelligent spending cuts to defense and medicare, to create a surplus and payoff debt (reducing long term spending in debt interest) then FUND tax cuts with surplus revenue.

The debt and deficit issue cannot be fixed by spending cuts alone.

And lower tax rates do not equate to economic growth:

The tax cuts within the United States did not translate into significant economic growth because they weren't the right taxes to cut (the corporate tax rate in the United States is remarkably punitive), there was a massive increase in regulatory burden which cancelled out any benefits from the tax cuts, and the rapid (uncontrolled) growth in the government crowded out growth in the private sector. To make matters worse, the United States has experienced substantial economic pressures for decades that have been poorly responded to which have acted as a drag on economic growth; primarily, the issue is that goods and services made in the United States are becoming increasingly uncompetitive and pseudo-governmental bodies have responded by ensuring cheap consumer credit to drive economic growth through consumption.

The problems in the United States obviously cannot be solved by cutting spending alone, but spending cuts much more dramatic than the ones you've listed are needed (the federal government needs to cut over $1 trillion), tax revenues should be increased by eliminating deductions and simplifying the tax code, a major regulatory overhaul is needed, the federal reserve needs to stop manipulating interest rates to create artificial growth, all pseudo-governmental bodies (like Fannie Mae and Freddie Mac) should be closed, the education system needs to be fixed starting by eliminating federal involvement, and there needs to be a cultural shift towards preventative healthcare rather than treatment.

The net result should be a government that has been reduced to a level that can easily be paid for through tax revenues, that has a lightweight but effective regulatory system, has no questionable involvement in the economy (in particular the financial sector), has a simple tax structure that is paid by all citizens, and the health of the nation improves while costs of maintaining that health decline.