The great debt limit debate ...

[houseelf]

Gingerly stepping into debate forum amongst people I love and care about despite all of our crazy a** notions about politics. Sending hugs, kisses, and cheap feels to all debaters out there.

I thought this was one compelling article:


http://www.time.com/time/magazine/ar...084593,00.html

There will always be individuals who need some assistance, I get that. I get hell fired up (technical, legal jargon to mean "oppose") when I read that half of all Americans don't even pay a nominal amount of taxes. This certainly does not engender the tenets of democracy, liberty, and capitalist, free market economy.

We absolutely can not move forward until we address subsidies.

[houseelf]

Gingerly stepping into debate forum amongst people I love and care about despite all of our crazy a** notions about politics. Sending hugs, kisses, and cheap feels to all debaters out there.

I thought this was one compelling article:


http://www.time.com/time/magazine/ar...084593,00.html

There will always be individuals who need some assistance, I get that. I get hell fired up (technical, legal jargon to mean "oppose") when I read that half of all Americans don't even pay a nominal amount of taxes. This certainly does not engender the tenets of democracy, liberty, and capitalist, free market economy.

We absolutely can not move forward until we address subsidies.

[Vanquisher]

I'm not smart enough to know the right answer here, but I am smart enough to know that none of those dipshit ass clowns in Washington know either. Obama's plan makes more sense to me, Bush seemed to royally F up everything possible, and I really dislike Boehner. It seems to me that Obama is really trying to approach the middle here, but warning of a veto that will put us in default seems really juvenile.

[oceanchild]

I think it's worth asking why we even have a debt ceiling. See here: http://www.newyorker.com/talk/financ...alk_surowiecki

Salient quote:

The truth is that the United States doesn’t need, and shouldn’t have, a debt ceiling. Every other democratic country, with the exception of Denmark, does fine without one. There’s no debt limit in the Constitution. And, if Congress really wants to hold down government debt, it already has a way to do so that doesn’t risk economic chaos—namely, the annual budgeting process. The only reason we need to lift the debt ceiling, after all, is to pay for spending that Congress has already authorized. If the debt ceiling isn’t raised, we’ll face an absurd scenario in which Congress will have ordered the President to execute two laws that are flatly at odds with each other.

The issue here is budgeting. Get rid of the debt ceiling, and do your jobs on budgeting.

(I'm really trying to keep my opinions in here to a minimum these days, but I do think this is worth talking about.)

[SuzySunshine]

Kelly, can you copy/paste that article? You can't read it unless you're a Time subscriber.

[diggitydot]

I'm curious. Those of you who feel that federal taxes are the only ones that "matter", why?

[diggitydot]

I'm not saying that lower income groups pay a higher dollar amount of total taxes. I'm saying they pay a higher percentage of their income to taxes than those in more affluent groups. Make no mistake, EVERYONE pays taxes.

Before you owned a home, did you rent a place to live? Then part of the rent you paid went to the taxes on that property. Just because you notice it now more (because the dollar amount is higher, but the percentage of your income going to taxes is smaller, or it's easier to identify because you get statements), doesn't mean that poor people don't "pay their fair share" in taxes.

I'm not saying that poor people shouldn't pay taxes. They should. And they do -- at a higher percentage rate of their income than many other groups.

[ladymoreta]

But they also benefit from more federal programs than higher income groups. I think it's fair that a higher percentage of their income goes to taxes because they reap many more benefits than they would from using that money for themselves. People making higher incomes pay a higher dollar amount, but see far fewer returns.

[diggitydot]

Which specific benefits do you mean?

[ladymoreta]

Lots... Tuition (Pell) grants, free or reduced school lunches, Medicaid, food stamps, subsidized housing, to name a few. Pretty much any income-based assistance. Yes, people who qualify for these pay sales tax and indirect taxes on housing, but they're getting more financial benefit than they're paying in. The same can't be said for higher income earners who pay a percentage into those programs but don't qualify at all.

[diggitydot]

I understand what you are saying, diggitydot. Regarding sales tax, you are correct in that if a person who makes less buys a great deal of 'stuff' - they pay the same sales taxes that a person who makes more would have to pay for buying the same 'stuff'. However, this is assuming that the person who makes less needs the 'stuff' bought. Long gone are the days of budgeting for many in our nation (regardless of income).

So, because an assload of people are dumb with their money and don't budget, that means poor people buy stupid shit that they don't need? That makes no sense. A bar of soap, laundry detergent, dish soap, blankets, beds, towels, etc. all cost money and are taxed. Let's not forget that food in many areas is taxed, too. We're talking necessities, not stupid, frivolous purchases.

The idea that a person pays more of their percentage earned in sales tax on a downward scale only works if all of the people on the scale are purchasing the same items (with corresponding sales tax).

No, it doesn't. Whether you buy $400 worth of lobster or $40 worth of groceries, you're still paying the same percentage of sales taxes on food items. There is zero difference depending on which food items are purchased. Someone who makes $60K/year purchasing $40 of groceries will pay the same tax rate as the person making $12K/year does on that same $40 of groceries. However, the sales tax on that $40 is a larger percentage of the yearly income for the person making $12K than it is on the person making $60K.

And, the question then arises: Should people who cannot afford a certain item be purchasing it to begin with?

Truly, it's no one's business. Do we really need people policing who purchases what? I know how I would use my limited funds, but that doesn't mean my priorities should be substituted for their priorities.

And, the next question would be: Is there a market economy that allows for numerous types of the same product at varying price-points (which would also radically affect how much sales tax was taken from each income earner)?

Just about every manufacturer makes their products in varying cost points and features in their attempt to increase market share. And the price point doesn't change the percentage of tax, only the total dollar amount of tax. Sales taxes are a flat percentage, not a sliding scale.

The person who makes less does not necessarily have more of his/her income taken up by taxation through consumerism if that person has set appropriate priorities and budgeted accordingly (and has access to normal business competition as a consumer).

I'm not talking about just consumerism. I'm talking about ALL taxes.

What's with the view that poor people buy stupid shit so they deserve to pay higher taxes or that the only taxes that "matter" are those that are considered "real"? They're all real. They all go into the government in some manner and are paid by EVERYONE.

And everyone should know how to do basic budgeting. Not just the poor.

And, while a person's rent will contribute towards the owner's property taxes, a renter has the ability to shop around - and, by doing so, decide his/her indirect property tax rate based upon the property chosen (with a higher or lower rent according to the renter's choice). The owner may not choose his/her level of property taxes, however (unless he or she would like to have their property confiscated by the real land-owner - the government).

A property owner has just as much ability to shop around before purchasing their home as a renter does before signing a lease. Every community I've ever lived in had published tax mil-rates. Don't want to pay higher taxes? Purchase your home/land in communities with a lower mil-rate. Or, if you feel that your taxes have become too high, sell.

A family that earns less money will not necessarily purchase food for their children's lunches, for example. Because of "free lunch programs" funded by government, they actually spend less sales tax than their higher-earning counterparts for that particular meal.

That's an assumption. While many low-income people take advantage of school food programs, not all do. Not even most in our current school district. We certainly didn't when we qualified. But, OK -- there's one program that marginally lowers the percentage of income taxed for low-income people for about 9 months out of the year.

As someone who spent much of her adult life at or below the poverty line - I really did not feel the bite of taxation until we started making more than the average U.S. household income.

Just because you didn't feel it, doesn't mean it didn't exist. Just that you weren't as aware of it as you are now that you're in a higher income bracket where your taxes are a lower percentage of your income, but a higher total dollar amount.

We found very, very low rents - which meant we paid a fairly small percentage of our income in any indirect property taxes.

Or that the person who owned the property you were renting had very low property taxes.

This was all voluntary taxation. As I started having more income I got a true taste of involuntary taxation. And, involuntary taxation is the real issue - because it is not a choice and does not depend upon an individual's judgement.

Which taxes do you think depend on an individual's judgment?


While I agree that those in the lowest federal tax brackets receive more federal assistance than those at the top, that doesn't change my position that the poor pay taxes, too. And at a proportionally higher rate than those in the highest tax brackets. That the "47% don't pay anything!" is a myth. 47% may not pay federal taxes, but they pay taxes in other forms and at a higher percentage of their income than other groups.

It isn't opinion. The link I posted earlier is to a pretty in depth study regarding who pays taxes and is broken down by state. There are very few states where the lowest income earners pay the same or less in total percentage of their income in taxes as other people in other tax brackets pay.

[diggitydot]

To further, directly answer your previous question, diggitydot, regarding why the focus on income taxes: Sales tax is a voluntary tax. It relies upon consumers 1)choosing to purchase a product and 2)choosing which price-point at which to purchase the product. Theoretically, if you lived a completely self-sufficient life, you would never (or rarely) pay sales taxes. That makes it voluntary. Whereas federal income tax is completely involuntary. If you earn money in any form - the government expects a portion of your income on penalty of imprisonment and fines (taking even more of your income). That makes it involuntary.

The government expects a portion of your income and gets it in many different ways. In none of which does the tax payer have the free will to refuse to pay. There are ways to mitigate how much you pay in taxes, but few people are able to live without cars, gas, utilities, phones, business licenses, marriage licenses, etc.

Is it correct to expect half of the American population to face involuntary taxation?

Everyone deals with involuntary taxes.

Is involuntary taxation needed? Why or why not?

Do you truly think people would pay if they didn't have to?

That's why the income tax is such a big issue. It's regarded as a heavy yoke for many in the U.S.

Income tax is just one of many taxes. Taxes in general can be a heavy yoke, not just federal income taxes.

[PrincessFiona]

diggitydot,

Though off topic, your ideas are worth discussing. I, personally, side with Laurie on this one. Whether or not someone who is 'poor' does take advantage of free educational programs, free lunches, free healthcare (yes ... medicaid) and have advantages when it comes to funding college, etc. is not the issue. They are entitled to those programs and CAN take advantage of them. Your argument that the well off pay less isn't really fair either. For example, we chose to send our oldest child to a private school that has an excellent track record in dealing with students who have exceptional academic skills but struggle in other areas. For him, that has beaten our public schools HANDS DOWN. I would literally prostitute myself to pay for this if I had to. I don't. Fortunately, we earn enough to be able to pay the $14,000/yr that it costs. Even though my son makes straight A's and scored in the 99th percentile on normed tests while he was still being measured, he did not receive ANY financial aid. Contrast that with a fairly large percentage of the students whose academic abilities are good ... but don't match his ... but who come from lower income households. Several of these students attend the school at ZERO cost to their families. Alex's best friend is one of them.

In this regard, financial aid is not merit-based, but financial-need based. If you want to argue that there is discrimination against the poor, you could also argue that there is discrimination against those who have worked very hard to finally be at a better place financially. All of us here know that the money we are earning now didn't just fall into our laps!

Beyond that though, we are starting to look at colleges for Andrew. Forget aid. Just forget it. Though we pay progressive federal taxes in this country and therefore a larger chunk of our income than say ... my brother ... who gets every dime in federal dollars back ... Andrew is not eligible for any grants, free healthcare ... you name it.

There are a lot of services provided to people who don't have the money that can even out your perceived slight of hand.

As to the topic of taxes on purchases. Yes, someone paying $40 for groceries (food isn't actually taxed in MN, but whatever) would theoretically pay the same percentage of taxes as someone wealthier ... BUT ... if someone with more money pays $400 for lobster or whatever, they are paying a larger dollar amount of taxes in. Frankly, I don't know where I stand on the idea of progressive taxation, but I'm more supportive of it when it comes to income tax than purchased items. Out of principal I would not spend more on my car, computer or whatever as a punishment for my hard work and years of dedication. Also, I would certainly buy less ... and that would do little to stimulate the economy and maintain jobs.

People aren't necessarily poor by choice ... but ... I don't believe that people are just accidentally doctors, architects, etc either. There has to be a pay off for dedication, hard work and the number of hours someone works. Maybe not everyone can own a home, ipad, iphone etc.

Shit ... we had one single car for the first 12+ years of our marriage. We had car-less times. We drove one car for the first 2 years my husband was an attending. We have worked hard to pay down our debt. We don't use credit cards. In every way, we have tried to be fiscally responsible and balance our personal budget. I didn't even own a cell phone until a few years ago ... then it was a pay-as-you go phone. I knew teenagers living in families much less well off than ours who had expensive, fancy phones long before I did. That particular family, btw, gets MNCare healthcare, has children receiving benefits, has a constantly unemployed father who refused to work in any field except the one he trained for and just considers himself to be too good to work for McDonalds, Wal-mart or whatnot. When Thomas was a resident and I was pg with Andrew and living in Germany, I worked the drive-thru at McDonalds even though I had a bachelor's degree. I did what I needed to do. That ... was a choice, Wendy. Your argument that people can't avoid many of these things doesn't hold up for me. Theoretically, you only need 1 marriage license, and the tax on that won't break the bank. We did live without one car, we STILL mitigate what we pay for gas by driving less and walking more. OH ... both of our cars are used too. We didn't choose cell phones/iphones until they were subsidized by dh's job. Our children don't have fancy cell phones (and they won't get them). We turn our lights off as much as possible, and water our lawn as little as we can get by with. It IS possible to pay less for these things. It is ... a choice.

Someone can't be a sahm, live in a 2 car family, own two iphones, a laptop, flat screen TVs, get MNCare healthcare for their kids and then demand that I pay more taxes without me pitching a fit.

As to the debt crisis.

I think that both parties have really screwed this up. From what little I've paid attention to, Obama seems to be the one trying to find a middle ground ... but I disagree with his idea of pushing something through past the next elections. At this late date, I'm more a fan of a staggered approach because I feel like we should really be taking our time to come up with a better plan. His position is well-taken though. The longer this issue is undecided, the more idiotic we look.

Does the US need a debt ceiling? I don't know. Do I? LOL. I think that we should at least be looking at debt in relation to our GDP (which is why even if a deal is made our credit ratings could take a hit).

In the meantime, I hope that a deal of some sort is made.

This debate is so interesting to me here because of the fierce emotions surrounding it. There are those who won't even venture an opinion ... those that feel like they have to say that they have strong opinions that they refuse to voice because they will leave or send someone else packing ... those who tread lightly ... those who are disdainful of our president .... The dynamics are fascinating. I imagine that it is even more fierce in DC where people are even more entrenched in partisan politics and are beholden to special interests. We have such difficulty discussing it here that it makes me lose faith in the idea that a resolution will be found in DC before Aug. 2.

It looks like the markets are taking a hit over this too ...

[diggitydot]

Kris - I agree with many of your points. My main point was that everyone pays taxes in some form or another, even if they don't pay federal income taxes. It's no sleight of hand.

People shouldn't be purchasing shit they can't afford. People should be living within their means. I don't think anyone disagrees with those statements. My disagreement was with the statements that almost half of the country doesn't pay taxes or that the taxes that the poor pay are somehow not as real as the ones people in higher tax brackets pay. That's it.

[reciprocity]

Kris: my resentment or my inability to discuss politics anymore has nothing to do with this forum. Just wanted to be clear in that. I have pretty much withdrawn from discussing politics in any place. But I hope this thread is productive for those whose hope and confidence has not been completely sucked down the drain.

I echo this sentiment, but probably for exactly the opposite political reasons.

It's good to know that the contemporary political climate can truly bring us all together in despising politics, regardless of our political leanings!