Taxes
To help eliminate our budget/debt problems, the debate includes taxation, increase taxes or decrease taxes the left and right will say respectively. Both will say we have a need for a new tax code, but will not agree on a proposal for a new code. Everyone who manages a checkbook has seen budget problems before and knows how to correct it - reduce expenses and increase income. Everything else we here about this subject beyond these two facts is just noise and should be ignored. The political left and right cannot agree on how to correct this problem. Doing something is also better than doing nothing, which is what this stalemate is giving us now. The left's solution to our problem is to increase taxes on the rich to increase income. Currently the top 20% of income earners pays 80% of the federal tax burden. So do we want them to pay 100%? 110%? 120%? Maybe just write the check every year for the entire cost of government, whatever it is? Clearly this is not the solution. You have also heard that in the booming 1950's the top tax rate was 90% so decreasing taxes for growth is false. First, it is true that in the 1950's top tax rates were 90%, but no one paid it. Second, marginal tax rates are a better comparative statistic and are much higher today than in the 1950s. Third, the statement is oversimplified, incomplete and the conclusion is wrong, as proven in the 1980s. The left also consistently disparages the Bush Tax Cuts, as causing income inequality and the deficits we currently enjoy. Yet these tax policies actually reduced taxes at all income levels. Plus, when faced with a chance to end them, the left extended the cuts as a positive factor on the economy. The right wants us to reduce spending and taxes, which is also a poor solution in a recessionary economy. But the truth is we must do both (reduce expenses and increase income), we must do it now and it will not be easy. Untouchable entitlements are the problem and must be restructured. Adding another entitlement, Obamacare, to this mix just makes the problem worse. All the political hot air outside these facts is simply a distraction from the difficult but obvious answer. As to a new tax code - a must. The current tax code is over 60,000 pages long! A 2012 report estimated that it took 6.1 billion hours preparing taxes. What a waste. See the 2017 Income Tax tables for your information.

Tax Reform Is Covering Its Costs

2/5/19
from The Wall Street Journal,
2/4/19:

Faster growth is on track to outpace debt in the next decade.

Is the 2017 tax reform paying for itself? It’s a complicated question, but the critics have made up their minds. Outlets like the Tax Policy Center claim the Tax Cuts and Jobs Act has diminished federal revenue rather than increase it as some supporters predicted. Other skeptics lament surging government deficits and debt. Some point to last year’s brief economic spurt as evidence of the law’s failure to drive long-term growth. Even if one accepts these arguments, none of them offers a conclusion about whether the tax cut was worth its cost. Comparing expected growth in gross domestic product with growth in publicly held federal debt, before and after the tax cut, is a better way to answer that question. This comparison captures the long-term impact of tax reform on the economy and the federal budget. Last week the Congressional Budget Office released a 10-year forecast—the first to assess the effects of tax reform after one year of hard results. Compared with its prereform projection, the CBO now expects annual GDP growth to be almost $750 billion higher by 2027, the last year of its prior forecast. A strong case can be made that tax reform played a predominant role in accelerating GDP growth. ...

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