Tax Cuts May Come At a Price, Study Says
Treasury: Financing Must Be Found
By Nell Henderson
Washington Post Staff Writer
Wednesday, July 26, 2006; Page D01
Washington PostThe federal government will need to either cut spending or raise taxes down the road to pay for extending President Bush's recent tax cuts, the Treasury Department said in a report released yesterday, dismissing the idea popular with many Republicans that such sacrifices can be avoided.
The Treasury report did not openly address the much-debated contention of many conservative analysts that the tax cuts will boost economic growth so much over time that the resulting increase in taxes paid will offset much or all of the initial loss in government revenue -- that tax cuts can essentially pay for themselves.
The report acknowledged the debate delicately, saying "the issue of how, or even if, these policies need to be financed remains a source of discussion among economists."
But the Treasury's view reflects "a recognition the federal government has to finance the tax relief" to avoid a rise in government debt, Robert Carroll, deputy assistant secretary for tax analysis, said in an interview.
The report stressed that the economic effects of extending the tax cuts "depend crucially on whether they are financed by lower spending or higher taxes in the future."...
Taxcuts for the wealthy in the middle of a war is never a good idea
The idiots on this forum can't seem to separate tax policy from federal spending habits.
The tax cuts have, irrefutably, increased federal tax revenues. Period. No argument.
I have no problem with the argument that they need to cut spending but raising taxes will only dampen federal income.
So what the difference to what I posted? The FEDS need to cut spending or raise taxes, and this article says raising taxes will reduce economic output - duh! Kinda puts the US between a rock and a hard place.To achieve this positive economic benefit, the study assumes that beginning in 2017, government spending is reduced to pay for the tax cuts.
However, if Congress decided to boost other taxes to make up the lost revenue, the Treasury study estimates that the positive benefit to growth would disappear. Instead, it estimates that the higher taxes in other areas would reduce economic output, as measured by the gross domestic product, by 0.9 percent annually in the years after 2016.
The only real answer is to address meaningful en lement reform. That's the only place where any substantial money can be regained.
Privatize Social Security. Cut the fraud and waste out of Medicare and Medicaid.
That'd save a buttload.
Your right, if only closet Neocons would admit that this WH has strayed the furthest from Conservative traditon EVER!
En lement reform? You mean like cutting VA benefits?
Yeah privatizing SS, because putting money in today's market is a safe bet.
My 401K, Roth IRA, and Stock Portfolio are way outperforming my Social Security contributions.En lement reform? You mean like cutting VA benefits?
Yeah privatizing SS, because putting money in today's market is a safe bet.
Maybe I'd like to make that decision for myself.Yeah privatizing SS, because putting money in today's market is a safe bet.
..but your SS contributions are a sure thing. A safety net. You could possibly lose everything in your other investments, it's called risk, and its the reason your earning more in your individual investments.
If that happens, there won't be any Social Security either. , put your money in an FDIC insured account at the bank and you'd be better off than gambling there will be a Social Security check for you when you retire.
It's a safety net with an expiration date unless we raise the retirement age. But how are you going to do that?
Think of it this way, your tax dollars help pay for the US. military incursions into other countries. Oh sure you could put your money in a fairly safe diversified portfolio and likely exceed the growth rate of government bonds and treasuries, but we'd all be speaking muslim.
Well, those IOUs in the treasury are government bonds and treasuries, now let me ask you, if the U.S. defaulted on those notes what would happen to the dollar?
I'm not against taxes. But Social Security should be about one's individual opportunities after retirement.
That makes absolutely no sense.
Isn't that why we are in Iraq and Afghanistan, so we fight them there so we don't have to fight them here? How are we supposed to fight them there without a well-funded military? Sell more bonds?
We have a well-funded military. And, it will remain so.
Most people have a pack mentality when it comes to investing and that can kill you in today's market. Oh sure, theoretically, it would be wonderful if everyone could manage their own retirement accounts, but many people are incapable.
We have a well funded military because the Saudis and the Chinese keep buying our government bonds, but that heavy borrowing comes at a premium diplomatic price. Who does our government represent, the will of the people or the will of the lender?
So, let those who want to manage their own money do so and, let those who want the government to mismanage their money do so. I don't see the problem.
They wouldn't have to. Privatization would create thousands of new jobs in Financial Management, and probably reduce the cost.
If you want to sit back and do nothing while the money comes out of your paycheck, it would still be an option. It's just no longer a requirement.
The problem is is that your WH, with its conservative values, has spent all the reserves we are adding to the treasury, despite repeated promises by Dubya not to do so while he was campaigning, so withdrawing any additional funds or reducing the natural rate of increase in the fund would cripple it for the rest of us.
All those financial managers would have to be paid, and you can bet that their paychecks would come out of your investments, increasing the rate of return you would have to earn at a minimum level to eveb meet the rate of return you already earn on insured government bonds.
Last time I checked Congress held the purse strings of the government and were under no obligation to fund the Executive budget proposal. Indeed many federal spending initiatives -- proposed in the budget -- go unfunded while earmarks, amended to important legislation, cons utes a tremendous amount of the budget in the form of pork barrel spending for cons uent pandering.
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