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Bananafish308

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RE: Question for Trump Supporters
To put that in further perspective, total government spending was $6.75 trillion in fiscal 2024. Look at actual real sources on government spending and tell us where those cuts are going to come from, once you factor out things that are untouchable, such as defense spending, social security, etc...


Harambe is ur Daddy

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RE: Question for Trump Supporters

🍌🐟 re $300B/yr tax reductions -- that is a reduction in tax revenue, not an increase in spending, just so we are clear. If implemented effectively, in theory it will decrease the cost of doing business in the US and spur job growth, ultimately netting out roughly even on tax revenue.

If you were to plot taxation and revenue collection on a graph, with the tax rate on the X axis and revenue collected on the Y axis, it would roughly follow a bell curve. Since you have studied economics, I imagine you might agree with this. When rates are high, it creates a strong black market (illegal) and incentive to exploit and lobby for loopholes (legal). When rates go low enough and loopholes are closed, businesses reach a point where they would rather pay the tax than find ways to get around it.

This can get pretty complicated so I will direct you to this nonpartisan resource to read more on how this actually is currently working.

Harambe is ur Daddy

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RE: Question for Trump Supporters

🍌🐟 Re budget cuts, yes good catch, I meant to write 2 trillion, not 2 billion. Sorry for going Biden on you for a sec there.

The US has 20 million government employees. That's one in 17 people. 3 million of them are federal, of which maybe half are military related. Surely there is a lot of redundancy going on. We could make huge cuts by cutting out all the corruption in health care paid to mega hospitals and pharmaceutical companies. The VA needs an overhaul, and it will get one. We have tons of bloat in entitlement programs.

I went to get my drivers license replaced the other day after a hobo stole it and my passport in Ohio. I had all my documents ready. You wouldn't believe how much redundant paper was involved. And it will take them several weeks to mail it to me. My passport will probably take months. This is what happens when you put the government in charge of things.


Bananafish308

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RE: Question for Trump Supporters
re your first post:

Fair enough, I am more than happy to take an objective look at the article you posted. I'll let you know my thoughts.

Some quick thoughts on some of your other comments:

re: $300B/yr tax reductions:

Not sure what you are referring to. Please explain.

Regarding your graph, I believe you are referring to the Laffer Curve. I agree with the concept as you describe. The key, however, is to identify the point at which the bell curve reaches its apex (finding the tax rate that maximizes tax revenue) and that is where the debate lies. As mentioned, the Trump tax cuts from 2017 are estimated to add almost $2 trillion to the deficit over ten years, so they didn't maximize tax revenue.

Simian: "When rates are high, it creates a strong black market (illegal) and incentive to exploit and lobby for loopholes (legal). When rates go low enough and loopholes are closed, businesses reach a point where they would rather pay the tax than find ways to get around it."

Theoretically, that seems to make sense. Unfortunately, that is not how it has played out. In fact, the rates keep going lower and lower, and corporations keep lobbying for more cuts and loopholes.

Before the Trump tax cuts of 2017, the corporate tax rate was somewhat high at 35%, however, very few companies actually paid this rate, especially the largest companies. This is off the top of my head, so it is just a rough number, but I believe the effective corporate tax rate was around 25% (after all the loopholes) It was even lower for large profitable corporations (16%!). At the time, my argument was exactly what you said: Fine, lower the rate, but removed all the loopholes and deductions. But that isn't what happened. Trump lowered the actually rate to 21%, but kept almost all the loopholes. As a result, in 2018 the effective tax rate for large profitable corporations dropped to 9%! This is why Biden signed a bill that provides for a corporate minimum tax of 15%, which all Reps
opposed. As mentioned, the actual rate is now 21%, so by opposing a minimum rate of 15% they are acknowledging that at least some of their corporate donors pay a lower rate than 15%.

Before the tax cuts, some of the largest corporations were already paying little or no Federal tax. That got even worse after the tax cuts. But it hasn't curtailed in the least corporate lobbying for further loopholes and tax cuts and Trump was forced to promise these cuts in order to attract corporate donors.

re your second post:

Simian: "The US has 20 million government employees. That's one in 17 people. 3 million of them are federal, of which maybe half are military related. Surely there is a lot of redundancy going on. We could make huge cuts by cutting out all the corruption in health care paid to mega hospitals and pharmaceutical companies. The VA needs an overhaul, and it will get one. We have tons of bloat in entitlement programs."

This would account for only a small fraction of the promised $2 trillion in cuts. As I previously said, look at a breakdown of government expenditures. He isn't going to cut any mandatory spending (which makes up roughly 61% of total expenditures) . That leaves $1.6 trillion in discreationary spending. So even if he cut every penny of discretionay spending, he would still be $400 billion short. And that includes cutting the entire defense budget.

Another example. According to the CBO, total compensation for all Federal government workers amounted to $271 billion in fiscal year 2022. So, if he fired every single Federal employee and didn't replace any of them, that would only be a little more than one eighth of his target. Get the picture?



Harambe is ur Daddy

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RE: Question for Trump Supporters

>>> re: $300B/yr tax reductions:
>> Not sure what you are referring to
<= referring to the 3T over 10 years that you mentioned as corporate rate deductions. And re: the Laffer curve, the issue is that we do not operate in a vacuum, like the purists think. Competition from other economies forces with lower tax rates and wages pushes the optimal tax rate way to the left. Mega corps were forming corporate entities at tiny islands with zero or hyper-low tax rates and sheltering a ton of their financial assets there. Right before Trump came into office, as I recollect, Paul Ryan engineered a one-year tax holiday during which companies could bring all their tax sheltered assets from overseas back into the US at a reduced rate -- I think it was 10%. This happened early on in Trump's presidency. In theory this was a smarter way to implement a "wealth tax" though due to its temporary nature I'm not sure how well it really worked out, due to its temporary nature, as you will see in the next link.

Fun fact: the amount of foreign assets owned by US taxpayers is roughly equivalent to our national debt.

Counter-fact: foreigners own more of our stuff than we own of theirs, on net.

One problem with implementing a wealth tax on assets in the US is that it interferes with unrealized gains in the market, and could cause traders to get over-leveraged, just like in the 1929 financial meltdown. It would also deter foreign investment in the US. The government already imposes a wealth tax on all Americans in the form of inflation. If you want to tax the rich for their lifestyle, a better way to do it is with luxury taxes on luxury products and vice products (like alcohol, legalized recreational drugs, and permits for yachts and private jets). NOT with regressive taxes on the poor on gas and food.

Back to the question of how to shrink the national debt without becoming uncompetitive on the world stage. Since that is the effect we are trying to achieve by increasing tax revenue. Here are some ideas, some of which I would hope we see from the new administration:

-reduce redundancy between state and federal government employees. The fairly nominal savings you pointed out in their salaries would be fairly substantial if we expanded it beyond just the 15% of employees under discussion, many of whom are US military service members in essential security roles.

-reduce regulations across the board. Some regulation is necessary, but it's often better implemented by trade guilds than with federal and state regulations.

-reform the unemployment system, which taxes every dollar made at nearly 100% for low-wage workers when working part-time and still collecting benefits

-stop China from stealing our IP. They need to be seriously punished for this. Every time there is a data breach we trace to them, we threaten international sanctions on that industry on their side for the next 15 years

-the govt creates and awards large prizes for solving problems, like more efficient batteries, and in return gains early access to patents for federal use of that tech, reducing federal costs

-get rid of wasteful subsidies. Stop subsidizing the energy industry, and ease up on permitting. We're wasting money on both sides.

-Get rid of our outdated anchor baby loophole giving citizenship to children of parents when neither of them has a green card. Instead, make it easier for the smartest immigrants to come and stay in the US along with their families.

-tariffs must be imposed intelligently. For example, don't tax Chinese steel without also taxing products made with Chinese steel, and trace the supply chain when applying tariffs. A shovel made in China that has two bolts added in California does not count as 100% American-made.

-tax Planned Parenthood for every baby they kill

-tax trans conversion operations at 500% for lowering the birth rate

How's that for starters?

kiwisteveh


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RE: Question for Trump Supporters
The economic nuts and bolts are boring. I like to keep things simple...

The proof of the pudding is in the eating. How much did Trump drive up the deficit during his previous administration? Why would any sane person think this time will be any better considering his wild promises are even more extravagant this time?

Did you see the Q&A session where a woman asked him how he intended to pay for childcare? His answer made it clear that he regards tariffs as some sort of goose that will lay unlimited golden eggs.

Keep going with your contradictory analyses. I'm more likely to believe the number of Nobel prize-winning economists who have told us of the looming disaster from Trump's policies.

Harambe is ur Daddy

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RE: Question for Trump Supporters

It's time to revisit this thread.

Congress does most of the spending, but the President signs the bills or vetoes them. It is important to examine causality and not merely attribute spending to any one person's tenure. Here's an argument for that.

Trump and Biden both presided over a fair bit of debt being added on in the last two terms. The main difference is Biden did a lot of his wasteful stuff unilaterally. Writing off student loans was not within the rights of the Executive branch, and he has politically weaponized student debt by doing so.

It remains to be seen what the Republican Party will enact for debt reform in the coming year.

Harambe is ur Daddy

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RE: Question for Trump Supporters

Bananafish was complaining that I never replied to some earlier arguments he made earlier in this thread, so here we go with rebuttals of some of his points:

-inflation-adjusted wages went up more under Biden than Trump.
WRONG. According to this source, they went up 8% under Trump and on aggregate fell under Biden. By the end of his presidency, it was slowly getting close to net zero. The poorer you are though, the worse the standard of living under Biden, due to the much higher inflation rate within the basket of essential items (see previous post) on transportation, utilities and food. AND...

I forgot to include rent. Median rent went up 15% under Trump, and up 28% under Biden. Lots of people just took advantage of Biden's allowing people to not pay their rent for YEARS, and that increased the costs for everyone else who WAS paying their rent, and it screwed over landlords. We just had a housing construction boom to accommodate all the illegal immigration we added, and there will likely be a housing crash once they are deported. This will be entirely due to Biden's lack of enforcement of the border. The only upside is that it may result in an inflation-adjusted drop in rent.

Banana did not cite a single source in all his claims about how Biden tried to improve things for the middle class, and I'm going to ignore most of those claims until he cites them properly, but I will look at a couple of them. Yes, things got slightly better for Black Americans. Health insurance coverage has gone steadily up under ALL presidential administrations, with the biggest jumps at the end of the Clinton years and the early Obama years. National debt is up way more under both administrations than Bananafish claims, unless he is adjusting for inflation. Consumer debt is through the roof, though (given my earlier arguments) it's probably roughly flat with inflation factored. As for labor productivity, whether things have improved under Biden depends on whether the data reported factors for inflation. If not, then productivity has dropped. At best this is a challenging period to examine due to changes from Covid economy changes, remote work, and the rise of AI.

Most dangerous of all, personal consumption has increased by about 33% under Biden. That is probably a much more accurate measure of inflation. When you compare that to the pre-tax market return of 37% which I described in the other thread, after which it will be taxed as if it was almost double that rate of return, you'll find that both wages and wealth have fallen across the board under Biden's tenure. The temporary boost in savings households experienced in the early 2020s was directly attributable to government deficit spending, but was totally evaporated by the inflation that followed it.

   
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