Ask Me Help Desk - What is the worst that can happen if we do not raise the debt ceiling?

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Originally Posted by tomder55

Our corporate tax rates are now the highest in the world ;and yes there are some loopholes to compensate ...and yes some companies take advantage of them and pay no taxes. But the vast majority are overtaxed .

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You make this claim but the facts don't actually bear it out. The question of tax can only really be measured as a take out of GDP. At 28.2% the US rates in mid range well behind countries like Canada and Australia who are much higher.Rather than being among the highest taxing nations you are the lowest of the developed nations. It sounds to me like much bleating from the sheep being sheared
List of countries by tax revenue as percentage of GDP - Wikipedia, the free encyclopedia

The tax rates are what they are. What does total revenue from taxes to do with the corporate rates ? If anything it suggests my point that lower rates stimulate the economy and increase revenues . This was true when Jack Kennedy ,Ronald Reagan and GW Bush cut taxes. Revenues were never greater .

It is no longer competitive for American companies dealing with companies that pay less than half the US corporate rates.

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Originally Posted by tomder55

The tax rates are what they are. What does total revenue from taxes to do with the corporate rates ? If anything it suggests my point that lower rates stimulate the economy and increase revenues . This was true when Jack Kennedy ,Ronald Reagan and GW Bush cut taxes. Revenues were never greater .

It is no longer competitive for American companies dealing with companies that pay less than half the US corporate rates.

Tom those companies have established themselves in the developing countries for a reason and it isn't lower tax. As an accountant we have a business maxim; tax shouldn't drive the business. If you wish to compete with the alsoruns, well go ahead but your policies and outcomes give the lie to lower tax stimulates the economy. Spending is what stimulates the economy, sometimes with the wrong result, but the money must flow and if private enterprise won't provide the flow inside your nation then the government must fill the vacuum. Germany has significantly higher taxes than you do yet it is the economic powerhouse of Europe. Australia completed a complete turnaround of its economy with a much higher tax regime than it has today. Tax was only really reduced when we got the balance right and taxed the black economy enabling reform of the entire system. What you need to realise is you don't need lower tax you need uniform tax so the various parts of your economy aren't competing with each other. Giving subsidies and incentives through the tax system provides false signals

How to you tax a "black" economy... that is off the books and unaccountable?

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Originally Posted by smoothy

How to you tax a "black" economy....that is off the books and unaccountable?

You do it with a consumption tax, what we style a goods and services tax, which is applied at every level and every business must collect and account for.. Our forward estimates of the impact were found to be grossly underestimated and I am aware of businesses who closed rather expose their earnings not only to the tax, but to the inevitable inclusion in the income tax regime.

The money will inevitably be spent somewhere, and when it is, the tax is collected. Kerosene tins of money in the backyard are a poor investment

Yeah layer and layer of multiple taxation on the same item. Already prices are becoming burdensome . What happens when layers of taxes are added to goods ? Can't collect much revenue if people don't purchase.

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Originally Posted by tomder55

Can't collect much revenue if people don't purchase.

Well that might be so but the rich aren't confined and they pay. There are more luxury cars on the road than there used to be, the waterways teem with yachts and there are tourists coming and going, You have to tax it all, but in an economy which has shut down it doesn't matter what the tax base is, there is less revenue, but what your "less tax lobby" forgets is less tax, then less expenditure, less nice rich government contracts to get fat on

By the way it isn't layer of tax on layer of tax it is that the end user pays the tax, but the mechanism takes a little at each stage so avoidence is limited. If you buy wholesale you still pay tax. At whatever level the supply chain stops the tax is paid. It means there are millions of tax collectors, like pirannas taking a little nibble here and there

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Originally Posted by paraclete

You do it with a consumption tax, what we style a goods and services tax, which is applied at every level and every business must collect and account for.. Our forward estimates of the impact were found to be grossly underestimated and I am aware of businesses who closed rather expose their earnings not only to the tax, but to the inevitable inclusion in the income tax regime.

The money will inevitably be spent somewhere, and when it is, the tax is collected. Kerosene tins of money in the backyard are a poor investment

Believe it or not... THAT is pretty easy to cheat on. Particularly for a cash business.

Trust me... Italy has an IVA which is otherwise known as a VAT in English speaking countries. And I've been getting around that for the most part for 25 years.

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but what your "less tax lobby" forgets is less tax, then less expenditure, less nice rich government contracts to get fat on

And that's a problem why ?

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it is that the end user pays the tax,

Exactly my point. Taxes get passed on in prices no matter how you tax businesses ,especially VAT taxes .

Still I'd go along with it if there were reciprical reductions in income taxes . At least with consumption taxes the consumer knows when they are getting screwed . The government cleverly deducts from payroll to hide it from the worker.

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Originally Posted by smoothy

Believe it or not....THAT is pretty easy to cheat on. Particularly for a cash business.

Trust me....Italy has an IVA which is otherwise known as a VAT in English speaking countries. And I've been getting around that for the most part for 25 years.

The only way you can cheat on it is not spend the money, buckets of cash going nowhere. Oh you may not account for your part of the tax to the government but the tax is paid when you spend or if you pay in cash when someoneelse spends, it is paid somewhere in the system. It has been paid before the goods reached you and it is paid when the money is spent. What you are saying is you also cheat on your income tax but you cannot be invisable. Why do you think they wrote that stupid provision in the health bill to identify transactions, they know people are cheating

Quote:

Originally Posted by paraclete

The only way you can cheat on it is not spend the money, buckets of cash going nowhere. Oh you may not account for your part of the tax to the government but the tax is paid when you spend or if you pay in cash when someoneelse spends, it is paid somewhere in the system. It has been paid before the goods reached you and it is paid when the money is spent. What you are saying is you also cheat on your income tax but you cannot be invisable. Why do you think they wrote that stupid provision in the health bill to identify transactions, they know people are cheating

Really... how about if the business gives you a break on price and does it without a receipt, off the books, they pocket the difference, and no business can account for every single item they take in vs sell. They don't pay the VAT on the sale because the sale never officially took place. Remember no receipt and it never passed the cash register. Thus it never happened. No sale.. no tax. I've been doing it and getting away with it for 25 years now. Not on EVERYTHING... but a lot of things.

Real easy way to get a chunk of your business off the books and NOT collect or pay that VAT. Got to love cash businesses.

Quote:

Originally Posted by smoothy

Really....how about if the business gives you a break on price and does it without a receipt, off the books, they pocket the difference, and no business can account for every single item they take in vs sell. They don't pay the VAT on the sale because the sale never officially took place. Remember no receipt and it never passed the cash register. Thus it never happened. No sale..no tax. I've been doing it and getting away with it for 25 years now. Not on EVERYTHING....but a lot of things.

Real easy way to get a chunk of your business off the books and NOT collect or pay that VAT. Gotta love cash businesses.

The reality is you are not listening, the tax gets paid before it gets to the retailer so if the transactions is off the book the retailer has paid the tax admittedly a sightly smaller amount but paid nevertheless when he paid his supplier. For what you are proposing to work there would have to be a complete cash economy and we know the cash economy is steadily giving way to electronic payment and at that point everybody pays.. One individual might get a small break but most don't. This is why we abolished our inefficient sales tax system, so many people were cheating and claiming exemptions they weren't entitled to, or running these cash businesses. As I said the tax gets paid somewhere, if not you then the guy who put the cash in his pocket, he has to spend it somewhere. What happened here is the government collected so much reveneue it gave out massive tax breaks to everyone. There is an economic theory called the multiplier effect and this is how you benefit from it

Quote:

Originally Posted by paraclete

The reality is you are not listening, the tax gets paid before it gets to the retailer so if the transactions is off the book the retailer has paid the tax admittedly a sightly smaller amount but paid nevertheless when he paid his supplier. For what you are proposing to work there would have to be a complete cash economy and we know the cash economy is steadily giving way to electronic payment and at that point everybody pays.. One individual might get a small break but most don't. This is why we abolished our inefficient sales tax system, so many people were cheating and claiming exemptions they weren't entitled to, or running these cash businesses. As I said the tax gets paid somewhere, if not you then the guy who put the cash in his pocket, he has to spend it somewhere. What happened here is the government collected so much reveneue it gave out massive tax breaks to everyone. there is an economic theory called the multiplier effect and this is how you benefit from it

But that's NOT how VAT works in most of the world. It does work exactly how I described it... and the way around it is exactly how I described it. I know more than a couple business owners in Europe... and that's exactly how I know how its implemented there and how it can be circumvented.

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Originally Posted by smoothy

But that's NOT how VAT works in most of the world. It does work exactly how I described it...and the way around it is exactly how I described it. I know more than a couple business owners in Europe....and that's exactly how I know how its implemented there and how it can be circumvented.

Yes well some people in this world are innovative enough to stop the cheats even if it means a monolithic administration system that imposes compliance costs. I recommend your nation adopt our model and then you will have earned your tax cut. It is simple, each link in the production chain from the primary producer to the retailer pays to the government a percentage of their selling price (tax included) after deducting the tax on imput costs they have paid, So in reality the only imput cost that hasn't been taxed is labour. It is a good measure of how a business is going, if you don't have a tax liability, should you be in business? Businesses have to register with the government and this allows the tax returns to be cross corrolated with income tax records and other sources of data regarding business operators. It works well for contractors too, no registration, a masssive withholding is mandated.

There is a let out, if your business is below a certain threshold, you are exempt from participating but you can't claim the tax on your imputs you just pay. It's good for startups too, they can get back the tax in setup costs before they are making a profit

These are all the programs that the new Republican House has proposed cutting.

* Corporation for Public Broadcasting Subsidy. $445 million annual savings.
* Save America 's Treasures Program. $25 million annual savings.
* International Fund for Ireland . $17 million annual savings.
* Legal Services Corporation. $420 million annual savings.
* National Endowment for the Arts. $167.5 million annual savings.
* National Endowment for the Humanities. $167.5 million annual savings.
* Hope VI Program.. $250 million annual savings.
* Amtrak Subsidies. $1.565 billion annual savings.
* Eliminate duplicative education programs. H.R. 2274 (in last Congress), eliminates 68 at a savings of $1.3 billion annually.
* U.S. Trade Development Agency. $55 million annual savings.
* Woodrow Wilson Center Subsidy. $20 million annual savings.
* Cut in half funding for congressional printing and binding. $47 million annual savings.
* John C. Stennis Center Subsidy. $430,000 annual savings.
* Community Development Fund. $4.5 billion annual savings.
* Heritage Area Grants and Statutory Aid. $24 million annual savings.
* Cut Federal Travel Budget in Half. $7.5 billion annual savings
* Trim Federal Vehicle Budget by 20%. $600 million annual savings.
* Essential Air Service. $150 million annual savings.
* Technology Innovation Program. $70 million annual savings.
* Manufacturing Extension Partnership (MEP) Program. $125 million annual savings.
* Department of Energy Grants to States for Weatherization. $530 million annual savings.
* Beach Replenishment. $95 million annual savings.
* New Starts Transit. $2 billion annual savings.
* Exchange Programs for Alaska , Natives Native Hawaiians, and Their Historical Trading Partners in Massachusetts . $9 million annual savings
* Intercity and High Speed Rail Grants. $2.5 billion annual savings.
* Title X Family Planning. $318 million annual savings.
* Appalachian Regional Commission. $76 million annual savings.
* Economic Development Administration. $293 million annual savings.
* Programs under the National and Community Services Act. $1.15 billion annual savings.
* Applied Research at Department of Energy. $1.27 billion annual savings.
* FreedomCAR and Fuel Partnership. $200 million annual savings.
* Energy Star Program. $52 million annual savings.
* Economic Assistance to Egypt . $250 million annually.
* U.S. Agency for International Development. $1.39 billion annual savings.
* General Assistance to District of Columbia . $210 million annual savings.
* Subsidy for Washington Metropolitan Area Transit Authority. $150 million annual savings.
* Presidential Campaign Fund. $775 million savings over ten years.
* No funding for federal office space acquisition. $864 million annual savings.
* End prohibitions on competitive sourcing of government services.
* Repeal the Davis-Bacon Act. More than $1 billion annually.
* IRS Direct Deposit: Require to deposit fees for taxpayer services to the Treasury, instead its budget. $1.8 billion savings
* Require collection of unpaid taxes by federal employees. $1 billion total savings.WHAT!!
* Prohibit taxpayer funded union activities by federal employees. $1.2 billion savings over ten years.
* Sell excess federal properties the government does not make use of. $15 billion total savings.
* Eliminate death gratuity for Members of Congress.
* Eliminate Mohair Subsidies. $1 million annual savings.
* Eliminate taxpayer subsidies to the United Nations Intergovernmental Panel on Climate Change. $12.5 million annual savings
* Eliminate Market Access Program. $200 million annual savings.
* USDA Sugar Program. $14 million annual savings.
* Subsidy to Organisation for Economic Co-operation and Development (OECD). $93 million annual savings.
* Eliminate the National Organic Certification Cost-Share Program. $56.2 million annual savings.
* Eliminate fund for Obamacare administrative costs. $900 million savings.
* Ready to Learn TV Program. $27 million savings..
* HUD Ph.D. Program.
* Deficit Reduction Check-Off Act.

* TOTAL SAVINGS: $2.5 Trillion over Ten Years

My question is, what THE HECK is some or all of this doing in the budget in the first place?

Didn't know the Wilson center got a grant. I wonder if other 'think tanks ' get similar funding . Yeah yeah.. they call themselves non-partisan and non-advocacy.. Right.

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Originally Posted by smoothy

These are all the programs that the new Republican House has proposed cutting.

My question is, what THE HECK is some or all of this doing in the budget in the first place?

Sounds like a great place to start, they should throw in the joint strike fighter while they are at it and save us both a lot of money

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they should throw in the joint strike fighter while they are at it and save us both a lot of money

Yup... but only if the build more Raptors.

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Originally Posted by tomder55

yup ...but only if the build more Raptors.

And where are you going to use those? On the Mexican border? No just bring the ones you have back from Afghanistan and withdraw support of Pakistan, more billion dollar savings