The USCHO Budget Thread (warning: political)

I got this idea last night when someone said on Twitter, "The left has a tax plan and the right has a tax plan but where is the tax plan for moderates?" It isn't likely the folks who populate the political threads at USCHO will ever be accused of being moderates, but we are pragmatic and (for the most part) pretty intelligent. For all our disagreements, we aren't all Glenn Becks and Mike Malloys but tend to have rational debate (certainly more rational than what you see on other sites). The sum total of everyone who posts is probably pretty close to the middle, with many political philosophies represented.

So my idea is this: Take the frameworks of the Ryan plan and the Obama plan and come up with something that might be palatable to both sides. A viable solution is going to require tax increases AND painful budget cuts - one side isn't going to be able to pass a budget that just hammers the other side. If we can come up with a plan, we can submit it to our various members of Congress, President Obama, the media and get it into the blogosphere.

Let's hear some ideas.

[MinnFan]

Re: The USCHO Budget Thread (warning: political)

So my idea is this: Take the frameworks of the Ryan plan and the Obama plan and come up with something that might be palatable to both sides. A viable solution is going to require tax increases AND painful budget cuts - one side isn't going to be able to pass a budget that just hammers the other side. If we can come up with a plan, we can submit it to our various members of Congress, President Obama, the media and get it into the blogosphere.

Let's hear some ideas.

If thats the paramaters that are being put on this then you don't want to hear my ideas. I'll still watch how it goes though.

*edit - let me add one thing. If you were able to cut spending to completely wipe out the deficit and you wanted to use the $70B that would be collected by repealing the tax cuts for the top 2% to purely go toward paying down the current debt I could get on board with that.

[geezer]

Re: The USCHO Budget Thread (warning: political)

So my idea is this: Take the frameworks of the Ryan plan and the Obama plan and come up with something that might be palatable to both sides. A viable solution is going to require tax increases AND painful budget cuts - one side isn't going to be able to pass a budget that just hammers the other side. If we can come up with a plan, we can submit it to our various members of Congress, President Obama, the media and get it into the blogosphere.

Let's hear some ideas.

That's a great idea... USCHO saves America. I look forward to hearing "workable solutions" from the smart people.

[Ralph Baer]

Re: The USCHO Budget Thread (warning: political)

I think that the USCHO Budget should allocate a larger percentage of its funds to the eastern leagues. There is too much western bias currently.

[Priceless]

Re: The USCHO Budget Thread (warning: political)

That's a great idea... USCHO saves America. I look forward to hearing "workable solutions" from the smart people.

You don't consider yourself one of the smart people?

If thats the paramaters that are being put on this then you don't want to hear my ideas. I'll still watch how it goes though.

The goal is to pay down the debt, not just balance the budget for one year. Unless we cut spending to Herbert Hoover levels I don't see how spending cuts alone are going to get us there. But by all means, show us the way.

[geezer]

Re: The USCHO Budget Thread (warning: political)

You don't consider yourself one of the smart people?

Insofar as smarts is 90% perspiration, no. I'm too lazy and distractable to make a serious contribution.

[Almington]

Re: The USCHO Budget Thread (warning: political)

Step 1: Let the Bush budget cuts expire for everyone. Everyone must make some sacrifice to solving this problem.

Step 1a: Complete tax structure overhaul towards a flat tax type system (just a framework):
Personal: Deductions: Standard: $20K per independent worker, $7.5k per dependent (dependents who file can claim $12.5k) OR 10% of total income.
Charitable donations, up to 10% of total income (can carry over excess from one year to next)
Education: Up to $5k for tuition or student loan interest
Homestead: $10k per year initially, falling by $1k per year over 10 years for owning a home (regardless if you have a morgage or not)
IRA/401k/other tax deferred retirement accounts: Current limits
Capital gains are taxed as regular income.

Tax rate: 20% of all income above deductions (everyone), minimum tax of 2% of all income for all taxpayers above 18 (those under 18 can't vote and shouldn't be forced or required to pay a tax because they have no say in how it is used).

Estate Tax: Cash above $250k is taxed as regular income. Property (stocks, bonds, real estate, businesses, etc) is treated as having a basis value of 1/2 of current value and is only taxed as income when sold.

I recognize that something will need to be done for small business to account for the expenses and that small business profits are not equal to income for the owners.

Corporate Tax: 7.5% of reported profits.

Spending MUST come down and to do so entitlements MUST be reformed.
Medicare/Medicaid: I think that Ryan's plan has some merit. The system does need to change from a defined benefit plan to a defined contribution plan from the government. I think that providing a basic level of coverage and allowing people to purchase increased coverage and care is the way that it needs to be done. The problem is that we are trading the inefficiencies of a public sector program for the profits of a private sector program: compassionate is not a word that is often used to describe the insurance industry.

Social Security: Some form of means testing should be instituted, but it needs to be based on lifetime earnings and not on total saved at retirement. Basing it on retirement saving punishes those who saved diligently and were financially responsible while rewarding those who were not. Like medicare/medicaid the system does need to change from a defined benefit plan to a defined contribution plan from the government with the impending retirement of the baby-boomers. No one that I know wants the elderly to suffer unnecessary financial hardship, but their is only so much that can be done without putting to much of a financial hardship on the rest of society.

Defense spending: Sorry, this must come down. This might be the most tricky balancing act of all, we need a military capable of fighting a major traditional military campaign but with the flexibility and adaptability to respond to terrorism. This requires a long term strategic military planning that is coupled with foreign policy objectives. I think that we need to reassess our larger role in the world and decide if continuing the era of Pax Americana is something that we are willing to pay for through increased taxes.

"Discretionary" Spending: This isn't the problem, the other three areas are (plus interest on the debt) and getting rid of all of it isn't really going to solve the long term problem. Everyone has their pet projects that they love and think that other projects are a complete waste of money. The problem with so many of these projects is that they are open ended and require continuous funding.

[Bob Gray]

Re: The USCHO Budget Thread (warning: political)

Almington,

That's a very impressive plan. Overall I like it, just a few quibbles here and there.

[Lady wore Black]

Re: The USCHO Budget Thread (warning: political)

Step 1: Let the Bush budget cuts expire for everyone. Everyone must make some sacrifice to solving this problem.

Step 1a: Complete tax structure overhaul towards a flat tax type system (just a framework):
Personal: Deductions: Standard: $20K per independent worker, $7.5k per dependent (dependents who file can claim $12.5k) OR 10% of total income.
Charitable donations, up to 10% of total income (can carry over excess from one year to next)
Education: Up to $5k for tuition or student loan interest
Homestead: $10k per year initially, falling by $1k per year over 10 years for owning a home (regardless if you have a morgage or not)
IRA/401k/other tax deferred retirement accounts: Current limits
Capital gains are taxed as regular income.

Tax rate: 20% of all income above deductions (everyone), minimum tax of 2% of all income for all taxpayers above 18 (those under 18 can't vote and shouldn't be forced or required to pay a tax because they have no say in how it is used).

Estate Tax: Cash above $250k is taxed as regular income. Property (stocks, bonds, real estate, businesses, etc) is treated as having a basis value of 1/2 of current value and is only taxed as income when sold.

I recognize that something will need to be done for small business to account for the expenses and that small business profits are not equal to income for the owners.

Corporate Tax: 7.5% of reported profits.

Spending MUST come down and to do so entitlements MUST be reformed.
Medicare/Medicaid: I think that Ryan's plan has some merit. The system does need to change from a defined benefit plan to a defined contribution plan from the government. I think that providing a basic level of coverage and allowing people to purchase increased coverage and care is the way that it needs to be done. The problem is that we are trading the inefficiencies of a public sector program for the profits of a private sector program: compassionate is not a word that is often used to describe the insurance industry.

Social Security: Some form of means testing should be instituted, but it needs to be based on lifetime earnings and not on total saved at retirement. Basing it on retirement saving punishes those who saved diligently and were financially responsible while rewarding those who were not. Like medicare/medicaid the system does need to change from a defined benefit plan to a defined contribution plan from the government with the impending retirement of the baby-boomers. No one that I know wants the elderly to suffer unnecessary financial hardship, but their is only so much that can be done without putting to much of a financial hardship on the rest of society.

Defense spending: Sorry, this must come down. This might be the most tricky balancing act of all, we need a military capable of fighting a major traditional military campaign but with the flexibility and adaptability to respond to terrorism. This requires a long term strategic military planning that is coupled with foreign policy objectives. I think that we need to reassess our larger role in the world and decide if continuing the era of Pax Americana is something that we are willing to pay for through increased taxes.

"Discretionary" Spending: This isn't the problem, the other three areas are (plus interest on the debt) and getting rid of all of it isn't really going to solve the long term problem. Everyone has their pet projects that they love and think that other projects are a complete waste of money. The problem with so many of these projects is that they are open ended and require continuous funding.

You can be my congressman anytime. Especially since I live in Ryan's district.

[joecct]

Re: The USCHO Budget Thread (warning: political)

Almington

Everyone files individually, no deductions, no nothing. I want the tax code to be used for one purpose -- raise revenue for the government. An exemption / deduction is currently in the code to encourage some social behavior and is a tax break that benefits some constituency.

In another post in the BHO 20 thread, I proposed a $35K deduction for every taxpayer, then a 15% rate on all income. Corporate was use GAAP and then 15% on any net income over $1M. In either case, the rate / deduction is not set in stone.

Good luck on the entitlements. Everyone is in favor of cutting them until it hits THEIR entitlement. Then it becomes the third rail.

[Kepler]

Re: The USCHO Budget Thread (warning: political)

Insofar as smarts is 90% perspiration, no. I'm too lazy and distractable to make a serious contribution.

I think anyone who recognizes this is by definition smarter than most of us.

[Almington]

Re: The USCHO Budget Thread (warning: political)

Almington

Everyone files individually, no deductions, no nothing. I want the tax code to be used for one purpose -- raise revenue for the government. An exemption / deduction is currently in the code to encourage some social behavior and is a tax break that benefits some constituency.

In another post in the BHO 20 thread, I proposed a $35K deduction for every taxpayer, then a 15% rate on all income. Corporate was use GAAP and then 15% on any net income over $1M. In either case, the rate / deduction is not set in stone.

Good luck on the entitlements. Everyone is in favor of cutting them until it hits THEIR entitlement. Then it becomes the third rail.

I agree that the tax system should be about raising revenue, and not social engineering. I believe that their are some areas (education expenses, charitable donation, and retirement contributions) where society as a whole benefits from the support of those aspects. With regards to retirement it is more a case of deferring tax revenue to some point in the future then passing on the revenue completely.

Failure to address entitlements means that the whole process collapses and ends in failure. It is why I was amused by the 2011 budget debate, both sides were fighting so hard over what amounted to nothing more then a pile of crumbs.

It's easy for me to sit here and make proposals, I don't have to deal with trying to get the highly polarized electorate to vote for me.

[Tundra]

Re: The USCHO Budget Thread (warning: political)

IF
1. Growth in GDP.

Tax cuts short term (with 100% sunset republican proof clad provision): but it has diminishing returns especially for business that is already at full investment/capacity level (LIKE the OIL companies Gov Parnell).

And just like anything people get used to the new tax level and it has no/little bearing on investments over time.

Direct government investments to spur new business: mass transit, alternative energy, bio tech etc... to spawn new business.

Drill ANWR and find oil field bigger than Saudis: 20million/barrel a day and tack on windfall profits if oil stays above $100... it should drive oil prices down (people will have more money to spend: IE lower tax idea) and spur growth AND extra tax royalty revenue (IF republicans don't give it all to the oil companies in the name of job creation and lower tax rate)

2. we can freeze (cut) spending.

Good luck with that.

3. we can raise taxes (revenue) without too much effect on Growth.

There is ample evidence that moderate tax increases has no bearing on growth. Bush I, Clinton era tax hikes, higher capital gains or treat it as normal income etc... VAT or national sales tax, higher gasoline tax, alcohol, tobacco and new sin tax of Fat/Sugar (HFCS:corn sugar) healthier people = less medical costs. Same logic as tobacco/alcohol taxes.

4. Freeze legislation related to taxes: tax breaks, tax credits,tax exemptions, tax subsidies etc...

Business/people want less taxes PERIOD. Next best thing is certainty.

5. Introduce special taxes (contrary to rule #4) for war (short term, finite funding), Maybe even infinite war on terror, war on drugs, war on poor (welfare), war on hunger (food stamps), SS, medicaid etc... so people can feel the pain in their wallet directly. And this time keep it separate from the general budget.

6. Have a hard cap on the national debt. OR create default plan and spend even faster, making sure investment from abroad goes over 50% of the debt so it'll be less painful for domestic investors when we default.

[Priceless]

Re: The USCHO Budget Thread (warning: political)

Everyone must make some sacrifice to solving this problem.

This is my favorite part. Everyone has to contribute (sacrifice) something. It's true that everyone wants to cut someone else's entitlement, but part of the budget process has to the idea that everyone is giving something up. I was recently watching a special on British morale during the Blitz. The government called for a pots and pan drive to collect steel. People gave up millions of pots and pans. So many that the government was overwhelmed and couldn't possibly recycle them all for war use. But the impact on morale was palpable. People felt they were making a meaningful contribution to the war effort. If you went to people and just asked them to give up their pots and pans (entitlements) they'll think you're crazy. Explain WHY it's a good idea and people might be more willing to chip in if they see that it's part of a broader plan that in the long run helps everyone. The American people have the ability to do great things, we just haven't been asked since World War II. It's been a free ride since then and that bill has come due.

Almington and Joe: Do you have any numbers to go along with your proposals? How much each part will cost/save? It'd be nice if we can show that anything we submit to help balance the budget and pay down the debt will actually balance the budget and pay down the debt. Great start though!

[Bakunin]

Re: The USCHO Budget Thread (warning: political)

I propose that we basically do what the Simpson-led deficit commission recommended, only that we accelerate it (so instead of getting the deficit / GDP percentage down to 1% by 2020, I say we do it by 2016 and bring the budget into balance by 2018 with a surplus by 2020). I also suggest that instead of going through this crap annually, Congress should pass a law that converts the budget cycle to a longer period of time (4 years). If anyone wants to increase spending on anything over that time frame, taxes must be raised (or spending must be cut elsewhere) to pay for it. No exceptions.

I also suggest abandoning the OASDI payroll tax and simply roll that into the income tax and increase rates accordingly. I don't believe the commission recommended means testing social security (they did suggest reforms, but I believe that was tied to increasing the retirement age and lowering benefits a bit), but I think we need to do that. We can phase out benefits in a similar fashion to how Roth IRA contributions are phased out based on adjusted gross income (only in this case, the benefit phase out would be based on lifetime earnings).