Comment by jamesaguilar | Hacker News Reader

Comment by jamesaguilar | Hacker News Reader

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> With all due respect raising taxes that high is a straw man.

How high? And how is it a straw man? A straw man is a false argument that someone uses to make another person's position seem weak in a debate. I don't see that happening here. (Except maybe in your post. You're making it seem like the person you're responding to is in favor of doubling or tripling the tax rate or something, when in reality he probably supports a moderate increase.)

> That's why per capita tax receipts have stayed fairly consistent over time . . .

Your link shows the opposite. Per capita tax receipts have grown 250% over the last sixty years according to that chart.

> I don't think we can raise taxes to the point where it would get us out of this mess

How high do you think that is? Right now receipts are well south of 20% of GDP. Currently revenue would have to be doubled, but outlays typically increase and revenues decrease during a recession. If you look at the non-recession tax rates that would be needed to close that gap in, e.g., the Bush years, it would have only taken a 5-10% increase, which hardly seems as outrageous as you're making it out to be.

> How high? And how is it a straw man? A straw man is a false argument that someone uses to make another person's position seem weak in a debate. I don't see that happening here.

I suspect it's around where they were during the Clinton presidency. But I honestly don't know. And if we were making policy rationally instead of trying to demonize one side or the other what we'd be doing is trying to find that out.

As for the term Straw Man what you're saying when you says "raise taxes" is "The answer is simple". You're giving the impression that the other person just doesn't want to look at the obvious answer. My point was the tax argument is false (because we can't realistically raise taxes that high) and hence the argument that our debt is a serious problem is not a weak one.

> Your link shows the opposite. Per capita tax receipts have grown 250% over the last sixty years according to that chart.

Consistent is relative I'll grant you that. But the point is when the top tax rate was around 90% tax receipts were lower. So in comparison to our wildly fluctuating tax policy the receipts have been relatively consistent.

> How high do you think that is? Right now receipts are well south of 20% of GDP. Currently revenue would have to be doubled, but outlays typically increase and revenues decrease during a recession. If you look at the non-recession tax rates that would be needed to close that gap in, e.g., the Bush years, it would have only taken a 5-10% increase, which hardly seems as outrageous as you're making it out to be

Right now you're just making up numbers so I can't really debate your point. 5-10% of what? Income tax? Capital Gains? If you combine National + Average State debt for each American the number comes out to around $150,000 per tax payer with interest. That is not something that is going to be solved with a 5-10% increase on anyone.

Here are some charts. I don't know how to make links in a comment.

http://paul.kedrosky.com/archives/2011/07/tax-burdens-around...

I'm not saying you're wrong because I don't know but you are over simplifying

First you're forgetting those countries don't have state taxes. For example, the top tax rate in California is close to 40% when you combine both State and Federal. Plus you have some cities that have income tax.

Second you're forgetting loop holes. Again the point I made above is U.S. citizens paid less in taxes when the U.S. tax rates were higher.

So again I can't say you're absolutely wrong. But you did over simplify (and you also ignored the point made in the very post you were supposedly replying to)

The chart says total tax burden so I'm assuming it takes into account state taxes. The one chart indicates an average for the U.S. of around 26%. This would be a 2% increase from what it is today. In a $10 trillion economy this would be a $200 billion tax increase. Given that borrowing rates are so low right now an awful lot of money can be borrowed before the budgetary burden reaches $200 billion in additional annual spending.

I responded to your post in another comment.

Total tax burden is a vague term. They could easily mean total Federal tax burden since they're comparing countries. This NY Times article pegs the total U.S. Federal tax burden at 20.7% which makes the numbers you quote seem dubious

http://economix.blogs.nytimes.com/2009/04/08/how-much-americ...

Tax burden is not a vague term. They define it in the charts. Total tax burden is the percent of GDP that is tax revenue. The link you gave talks about effective tax rate. This is very much different than the percent of GDP collected in taxes.

A question: how does the fact that these are revenues instead of rates play into this discussion? I.E., one of the arguments of free-market proponents is that lower tax rates can increase revenues by allowing the economy to grow-- which, if it were true for some or all of the economies, would actually undermine the point.

I'm genuinely curious about this, not trying to stir up a giant political debate.

I think it's quite bad to focus on rates. Given that there are usually loop holes and tax incentives it becomes necessary to look at tax burden as a percent of GDP.

The people who make the argument you mentioned are wrong. If lower taxes always lead to greater economic growth then the optimal tax burden would be 0%. But this would mean there is no government and we'd be in an anarchy. Does anyone really think an anarchy is the optimal way to grow an economy?

> Right now you're just making up numbers so I can't really debate your point.

No, I'm not, and it's a bit disrespectful of you to say so. You could have verified what I was saying with a mere sixty seconds of fact-checking on your own.

I was talking about receipts, just like earlier in the paragraph. What tax it comes from really does not matter for the purposes of this discussion. Receipts would have had to increase somewhere on the order of 10-20% during the Bush years for that period to have a balanced budget. That's according to this chart (http://www.heritage.org/budgetchartbook/growth-federal-spend...). Now, this is from a conservative think-tank, so take that with whatever grains of salt you will, but this is consistent with spending charts I have seen on non-partisan sites.

We weren't talking about balancing the budget we were talking about eliminating the debt and you didn't say 10-20% you said 5-10%. So do you have a source for the 5-10% or am I right that you just made that number up?

I don't mean to flame but I based my statement on facts not a desire to disrespect you. Namely the Total U.S. tax revenue which was $2.1trillion. 10% of that is $210 billion which is less than half the interest on our national debt

(btw - The U.S. deficit for 2011 was $1.5 trillion)

For the record I'm not trying to be holier than thou. I've absolutely guesstimated (aka "made up") numbers in the heat of the moment. But when someone called me on it I didn't try to be indignant about it

Typically "eliminating the debt" is interpreted as building a modest surplus. No one is claiming it can be completely done away with immediately. That simply requires balancing the budget + a few percent. It's true that my 5-10% number was an estimate, as was the 10-20% number; that is not the same as making numbers up.

Even the estimate that is most generous to your position is more than sufficient to support my argument. It could be twice again that amount (40%) and still not reach the levels of unworkability you posited in your original post, considering a number of other countries are under burdens more than 60 or more percent above the United States'. You can pick all the nits in the world but that fact remains.

I don't understand how you're having a problem with this. Looking at a good year (I chose 2005) we had $2.1 trillion in federal revenue (http://www.usgovernmentrevenue.com/year_revenue_2005USbn_12b...)

If we managed to increase that by 40% that would generate an extra $840 billion per year.

(Keep in mind that's massively generous because that would mean a 40% increase in everyone's taxes not just the top earners)

The total debt right now is $14.7 trillion. Even the most conservative CBO estimates had us adding $700 billion per year to the debt (usdebtclock.org) and those were very conservative estimates.

So your 40% increase doesn't even deal with the deficit. Much less the debt or the unfunded liabilities.

And that's assuming you could get that. My original point was people will subvert the tax code when tax rates get high enough to justify accountants and lawyers to do so. That's why a 90% tax rate didn't produce dramatically more revenue per capita.

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