Comments on: Composition of Federal Spending and Taxes for 2007

By: bipartisanpath

bipartisanpath — Wed, 25 Jun 2008 13:38:23 +0000

One interesting point about this slide is that it shows that spending for Medicare and Medicaid ($561 billion) plus spending for Social Security ($581 billion) equals $1.142 trillion. This entitlement spending already exceed the taxes dedicated for such purposes ($870 billion for Social Security and Medicare taxes) by $272 billion. As the baby boomers retire, this funding gap will become far worse and, as other charts in this presentation show, unsustainable. It is obvious that there is an urgent need to address the funding issues with Medicare and Social Security.

By: oldgader

oldgader — Tue, 24 Jun 2008 04:51:46 +0000

Per the Government web site treasurydirect the outstanding debt went up by $500.68 Billion from 9/30/2006 to 9/30/2007 not the $162 Billion shown here. Also the interest on the debt was Almost $430 B not the $237 B shown here. Looks like maybe they are wanting to use only public debt not the total debt.

[Editor - Correct. This chart only shows debt held by the public and interest paid on that debt. It does not show intragovernmental holdings (debt held in entitlement trust funds) or interest "paid" on that debt.]

By: tl

tl — Sun, 22 Jun 2008 17:40:24 +0000

There are plenty of comments out there (ie, plusaf’s website link) about how the Democrats in office created, and later, messed up Social Security, creating the problems we have today. But in all fairness, let’s take a look at who created the whole big tax mess we are in today. In 1909, President William Howard Taft, a Republican (and a lawyer), proposed amending the Constitution to remove the apportionment restriction on taxing of incomes. It was drafted and passed quickly by both houses, both which had Republican majorities, and by 1913, it had been ratified by all but 6 states, becoming the 16th amendment to the Constitution. This amendment gave Congress the ABSOLUTE POWER to lay and collect taxes from any source of income without any guidelines, limitations, or restrictions. This is what has led to our current situation. Power without controls. Both Democrats and Repulicans can be blamed for our current dillema. Neither a Flat Tax, a National Sales Tax, or any tax increases, will fix our problem until there is an amendment to the Constitution which puts controls on taxing, borrowing, and spending.

By: Gary Darling

Gary Darling — Fri, 20 Jun 2008 18:46:33 +0000

marshacat is right about the Flat Tax, any decent tax specialist can coach a savvy customer on how to pay less. The higher income taxpayers will find clever ways of sheltering their income. Amuse yourself all you want with ‘what-ifs’, the tax gurus will be the ones getting rich teaching new schemes.

Any attempt to make corporations yield a larger portion of their income will result in corporations finding ways to reduce their US income. Less domestic growth, increased R&D or other tax-sheltering maneuvers, new corporations choosing to form in more favorable tax structures, like LLC’s.

Corporations are not the bad guys here. Corporations do not consume anything provided by the government, individuals do. Corporations, however, do buy Treasury Bills, fund retirement accounts, provide jobs for a large portion of our population, and contribute greatly to the GDP. GDP is a benchmark component in our economy, we should be doing all we can to promote its growth.

Excessive spending is clearly the culprit.

By: marshacat

marshacat — Thu, 19 Jun 2008 19:13:03 +0000

The Flat Tax is NOT the answer — it is still a confiscatory taxing mechanism in which we are forced (at gunpoint, if necessary) to participate; it leaves intact the structure that violates the Bill of Rights; it enables and gives incentive to people to “hide” their income to escape taxation, still dumping the burden on the lower middle class who can’t afford CPAs, tax attorneys, and to buy loopholes through lobbyists; power is retained by government.

The Fair Tax Act (HR25 / S1025) is a Constitutional tax (indirect, uniform), that is naturally progressive (untaxes the very poor; allows everyone else a choice of participation in funding what the gov’t does). A simple accross the board consumption tax; no individual filing; retailers would collect it the same as they do sales tax (90% of all sales taxes are collected by just 10% of the retailers); compliance is cut and dry and simple; no incentive to hide income; no cascading of taxes from businesses to consumers; totally transparent so we KNOW how much tax we are paying; power is returned to We the People.

http://www.OperationOffTheFence org.

By: plusaf

plusaf — Thu, 19 Jun 2008 03:49:52 +0000

feel free to see some fallacies about “fair” taxation at http://www.plusaf.com/soapbox/flattax.htm

in about 1970 i did some simple math and found out that if you took the entire tax revenue of the US government and divided it by the total income of everyone in the US, the ratio was about 6-7 per cent!!

so, i estimated, if you set a floor level of about 200% of the alleged “poverty level” income and didn’t charge ANYTHING in income taxes to ANYONE until they achieved that level, a flat tax [with NO deductions for ANYTHING] of about 13% would probably bring in as much or more tax revenue! and could be adjusted DOWN if it “brought in too much and the deficits were being paid down too quickly.”

try that math, too…

but any time anyone says “the rich aren’t paying their fair share,” i’m going to be climbing on top of my soapbox and shouting, “B.S.!!!”

and that goes for the “net worth tax” described elsewhere on this site. lousy idea.

By: HardyMacia

HardyMacia — Wed, 18 Jun 2008 17:21:16 +0000

If government spending was held to inflation since the 60′s, 70′s, 80′s then corporations would still be paying the lions share of the budget. It’s not so much that their tax rate dropped, but spending skyrocketed. It doesn’t matter how much your shifting around the taxes, we the people are still paying it either directly or indirectly. The problem is spending.

I was one of the 19 million that voted for Perot. I’m love this new Perot Charts site.

Just as in 1992 the Democrats and Republicans aren’t going to fix the core problems and it will be up to a third party candidate and getting that candidate into the debates. I am supporting Bob Barr for President in 2008.

By: Bruce Barnes

Bruce Barnes — Wed, 18 Jun 2008 06:33:03 +0000

If we didn’t have to pay the interest on the debt of previous generations or if corporations had paid the same percentage of GDP as the 60’s, 70’s,or 80’s we would have had a surplus instead of a deficit in 2007.
In a paper by
A Joint Project of Citizens for Tax Justice & the Institute on Taxation and Economic Policy September 2004

Corporate Income Taxes in the Bush Years
http://www.ctj.org/corpfed04an.pdf

Corporate taxes paid for more than a quarter of federal outlays in the 1950s and a fifth in the 1960s. They began to decline during the Nixon administration, yet even by the second half of the 1990s, corporate taxes still covered 11 percent of the cost of federal programs. But in fiscal 2002 and 2003, corporate taxes paid for a mere 6 percent of our government’s expenses.

In 1960 corporate income taxes were over 4 % of GDP, in 2002 it had fallen to less than 1.5 % of GDP.

Grover Norquist, President of Americans for Tax Reform Foundation, is calling for another tax reduction on corporations. Most of the Republican Party including John McCain has pledged to him they will cut taxes whether it is good for the American people or not. Someday those republicans may realize the emperor has no clothes.

At present companies do not have to pay tax on income earned overseas until they bring it back to America, which means they leave it overseas in bank accounts. They also can arrange for countries to build plants for them in exchange for paying taxes to the foreign countries. Foreign tax paid is a one for one write off for American taxes. Therefore, the American taxpayer is subsidizing jobs overseas. Someone has to pay for the federal budget. If we eliminate corporate taxes, household taxes will go up 66.7 %. So we should increase the standard personal deduction and exemption up to $100,000 for each person. That would be fair.

By: SchalkDad

SchalkDad — Tue, 17 Jun 2008 20:22:50 +0000

June 17, 2008:
Overall, I thank you for presenting information that escapes the realm of press conferences, senate committees and most talk shows, but is so vital to rational thinking and voting by our citizens. Well done!
I do suggest that the bar on the left side of the chart (#26) showing Social Security (Spending)-$581 be highlighted in the same purple color as the bar for Medicare & Medicaid (Spending). The eye will naturally compare the items on the left side of the chart (Spending) with the items on the right side of the chart (Receipts) that are highlighted in the same color. This comparison will more clearly indicate that the combined spending for these two items exceeds the receipts for these items by $272 billion. Only the surplus of receipts over spending in other areas (+$111 billion) reduces the overall deficit to $162 billion. I think that this slight change will more clearly emphasize the issue that SS, Medicare, and Medicaid entitlements and cost controls must be revised, since it contributes the greatest amount to our growing deficit. I must ask one question: does the spending in Social Security in this chart reflect those amounts “borrowed” from these funds and spent on discretionary items, such as defense?

By: J. Noga

J. Noga — Tue, 17 Jun 2008 19:19:32 +0000

“SoCalSir” is right on with his comment. In fact, the entire tax system was initially set up to tax only “CORPORATIONS”. It was not until the (never ratified) IRS code was implemented that “earnings” from “individuals” where ever taxed. And the trend to shift the burden of funding our nations economy onto the working class, rather than the corporations is a travesty. I read that the entire tax monies collected from corporations was used to pay for the military – it was a “wash” – is that an accurate statement?

Here is an accurate statement regarding the 2007 (fiscal) tax receipts:
Individual Income Taxes – $1,163 BILLION (1.16 trillion)
Corporate Income Taxes – $370.2 BILLION
PAYROLL (combined) Taxes – $869.6 BILLION

While I cannot decipher what percentages of the “Payroll Tax” is “Individual” versus “Corporate”, it is shared sizable burden upon each. And again, the working class is “volunteering” funds to the IRS at a 3:1 rate above corporations.
J. Noga