October 3rd Presidential Debate

[changm55]

One thing that I wish Romney would have said, and that I hope Ryan will touch upon next Thursday is the impact of tax simplification on the economy.  Though I would love for Obama's rumored $5 trillion in tax cuts that Romney plans to be true, what would happen if a combination of lower rates EXACTLY offset by elimination of ALL deductions/loopholes/whatever were to take place and we had a flat tax.

Currently the US economy spends $300 billion a year on tax compliance.

That is an obscene amount of money, and an equally obscene number of hours are spent keeping up with a taxcode that is far too broad for anyone to wrap their arms around.  Simplifying taxes has the potential of returning $300 billion to the economy every single year without "costing" the government a cent.

What would the economic impact of something like that be?

Then consider all the misinvestment of resources motivated by taking advantage of a tax code that spans 73,608 pages ( sourcehttp://politicalcalculations.blogspot.com/2012/04/2012-how-many-pages-are-there-in-us-tax.html)

Tax simplification could be the gift that keeps on giving.

The only bad thing is that it would cost many CPAs/EAs their jobs.

Or it could change the nature of their jobs.  Instead of navigating the bureaucracy of our tax system, they could be freed to use the same skills for financial planning.

Good point, it would make tax planning less complicated and time consuming.

Thank you.  Also think about the impact on the economy of removing dead weight from government off of the backs of people everywhere.  Aside from the additional $300 billion (a little Googling shows that number is conservative.  Arthur Laffer estimates the burden at over $430 billion annually) that people would be free to spend/invest, there is a multiplier effect from using money towards more productive things.

yeah but the truth is taxes will and always will be subjective... anybody worth their weight in salt probably already has a holdings company somewhere (http://www.investopedia.com/financial-edge/1110/how-big-corporations-avoid-big-tax-bills.aspx)... it is only the ppl that hold w-2's that have no where to hide that will be effected... any attempt to tax holdings company loop holes will require taxing each transaction coming in and out of the country... this will destroy manhattan and along it, the rest of our country especially industries whos system are built on the foundation of easy flow of capital... again the only alternative i can really think of is patching this would be increasing sales tax, luxory tax, VAT tax...

 

[winex]

One thing that I wish Romney would have said, and that I hope Ryan will touch upon next Thursday is the impact of tax simplification on the economy.  Though I would love for Obama's rumored $5 trillion in tax cuts that Romney plans to be true, what would happen if a combination of lower rates EXACTLY offset by elimination of ALL deductions/loopholes/whatever were to take place and we had a flat tax.

Currently the US economy spends $300 billion a year on tax compliance.

That is an obscene amount of money, and an equally obscene number of hours are spent keeping up with a taxcode that is far too broad for anyone to wrap their arms around.  Simplifying taxes has the potential of returning $300 billion to the economy every single year without "costing" the government a cent.

What would the economic impact of something like that be?

Then consider all the misinvestment of resources motivated by taking advantage of a tax code that spans 73,608 pages ( sourcehttp://politicalcalculations.blogspot.com/2012/04/2012-how-many-pages-are-there-in-us-tax.html)

Tax simplification could be the gift that keeps on giving.

im a proponent of flat tax too and would also love to see a Singaporean flat tax here with 1/10 of our citizenry being millionaires...

unfortunately, romneys fiscal plan only works when growth is combined with a lower rate offset by deductions... if u take any of the 3 out of the equation, it will still show a deficit ... romney knows this quite well so he made a point to emphasize there has to be growth so more ppl are taxed after obama first brought up the 5billion hole... no stellar growth, but lower rates and deductions will still cause a deficit... flat tax wont help either, cause the top 15% tier of tax payers pay for about 60% of our government spending (too heavily skewed as it is, therefore the gov would be losing major money at this point)... in order to have a flat tax, our luxory tax and sales tax would have to make up for the deficit (im actually fine with this since i rarely spend more than i need, but i think most ppl will probably be against it, since we do have a consumerist culture)

I don't think anyone here (and few people anywhere) can accurately make the statement that you made (and that I put in bold).

At the end of the day, calculating federal revenues is an algebra problem.  The 73,000+ pages of tax code create categories of revenue and categories of credits and/or tax deductions.  When all is said and done a given level of economic activity creates a given amount of revenue for the government.  While it is in the best interest of the government to grow the economy, if reduction in dollars generated by revenues are offset by reductions in dollars that reduce tax liability in the form of credits and tax deductions, things stay in a state of balance.  It is only when reduction in revenue exceeds reductions in deductions/credits that economic growth is needed to balance the equation.

Of course the 800 pound gorilla in the room is the 27 million people who are unemployed.  Labor participation rates are at their lowest point since the early 80's.  Improve the economy and change a large percentage of those 27 million people into tax payers instead of government expenses and everything changes.

As for taxes, personally I would prefer a consumption tax to an income tax.  The only problem I have with a consumption tax is the 16th amendment.  It authorizes an income tax, not a consumption tax.  Though a consumption tax makes a great deal of sense economically (if you want to discourage an activity, tax it.  So why do we want to discourage people from making money?), the 16th amendment would have to be repealed and replaced by a corollary amendment that authorizes a consumption tax.  The difficulty in pulling that off leads me to advocate scraping our tax system with a simple flat tax.  If we can't replace those 73,000 pages with 10 pages or less, we haven't simplified it enough.

 

[changm55]

i dunno... i always thought that was what romney meant when he was talking about his plan, maybe i interpreted wrong... what i assumed what romney meant was a.) current status quo revenue = 1.) his plan of lowering taxes + 2.) closing loopholes + 3.) increasing tax payers from the 800lb gorilla...

how did u guys interpret it?

im down for a consumption tax... it just makes more sense... u drive on a road more, pollute more, u pay more taxes... drive less, pay less... lol

 

[socal78]

Well since it is my poll, I make the rules.  You can still vote.  But do yourself a favor and watch the link you posted.  Personally I would rather have Santorum facing Obama right now, but Romney did well.

Yep, I played by the rules to be fair: watched

then voted.

Here's the entire schedule with details. If anyone is like me where your DVR can only be programmed a week in advance, having a reminder here helps if you want to watch Obama sweat in H.D.

 

[winex]

I think there is a 4th part to the Romney algebraic equation - a growing economy not only increases the number of tax payers, but everyone makes more money from economic expansion, so even though they pay lower rates, there is an offset from paying lower rates against higher income.

 

[winex]

Well since it is my poll, I make the rules.  You can still vote.  But do yourself a favor and watch the link you posted.  Personally I would rather have Santorum facing Obama right now, but Romney did well.

Yep, I played by the rules to be fair: watched

then voted.

Here's the entire schedule with details. If anyone is like me where your DVR can only be programmed a week in advance, having a reminder here helps if you want to watch Obama sweat in H.D.

What did you think?

This may be overly optimistic, but the potential for something historic happening is there.  Of course it all depends on what happens on November 6th, but the difference in demeanor and the impact on the race reminds me of what we heard in history classes about Kennedy/Nixon.  Of course that was mainly visual.  People who listened to the debate on radio thought that Nixon won.

What I am hoping is going to happen is that pressure from the left brings out fighting Obama for the next debate and that Romney is as well prepared as he was last night and sets up an even bigger contrast than was apparent last night.

 

[changm55]

I think there is a 4th part to the Romney algebraic equation - a growing economy not only increases the number of tax payers, but everyone makes more money from economic expansion, so even though they pay lower rates, there is an offset from paying lower rates against higher income.

got it, icic what u mean now

 

[winex]

I think there is a 4th part to the Romney algebraic equation - a growing economy not only increases the number of tax payers, but everyone makes more money from economic expansion, so even though they pay lower rates, there is an offset from paying lower rates against higher income.

got it, icic what u mean now

Of course that is all on the revenue side.  Both Romney and Ryan say that Federal spending needs to be brought to 20% of GDP or lower from the current 24%.  Though the media paints cuts like that in draconian terms, really what they are saying is that the Federal government needs to be brought back to the level of spending it had in the pre-Obama era.

 

[changm55]

I think there is a 4th part to the Romney algebraic equation - a growing economy not only increases the number of tax payers, but everyone makes more money from economic expansion, so even though they pay lower rates, there is an offset from paying lower rates against higher income.

got it, icic what u mean now

Of course that is all on the revenue side.  Both Romney and Ryan say that Federal spending needs to be brought to 20% of GDP or lower from the current 24%.  Though the media paints cuts like that in draconian terms, really what they are saying is that the Federal government needs to be brought back to the level of spending it had in the pre-Obama era.

speaking of GDP and growth, haha this reminds me (although a little off topics), whats ur take on QE3?

 

[winex]

I think there is a 4th part to the Romney algebraic equation - a growing economy not only increases the number of tax payers, but everyone makes more money from economic expansion, so even though they pay lower rates, there is an offset from paying lower rates against higher income.

got it, icic what u mean now

Of course that is all on the revenue side.  Both Romney and Ryan say that Federal spending needs to be brought to 20% of GDP or lower from the current 24%.  Though the media paints cuts like that in draconian terms, really what they are saying is that the Federal government needs to be brought back to the level of spending it had in the pre-Obama era.

speaking of GDP and growth, haha this reminds me (although a little off topics), whats ur take on QE3?

I think it needs to be called QE(i) because it is infinite.  My opinion is that it will good stock prices and commodity prices, but that it will have no impact on the real economy.  Inflation is never a good thing.

 

[changm55]

I think there is a 4th part to the Romney algebraic equation - a growing economy not only increases the number of tax payers, but everyone makes more money from economic expansion, so even though they pay lower rates, there is an offset from paying lower rates against higher income.

got it, icic what u mean now

Of course that is all on the revenue side.  Both Romney and Ryan say that Federal spending needs to be brought to 20% of GDP or lower from the current 24%.  Though the media paints cuts like that in draconian terms, really what they are saying is that the Federal government needs to be brought back to the level of spending it had in the pre-Obama era.

speaking of GDP and growth, haha this reminds me (although a little off topics), whats ur take on QE3?

I think it needs to be called QE(i) because it is infinite.  My opinion is that it will good stock prices and commodity prices, but that it will have no impact on the real economy.  Inflation is never a good thing.

what about its devaluing impact on the USD vs foreign currency? do u think it will actually spur USA export as they say it will?

last time we had a chance to audit the fed under legislation pushed through by libertarians, i think we found the fed wrote off 16 trillion in bailouts, total of both known bailouts n secret bailouts... i was so furious when i read that news... stuff like this and QE3 is such a disincentive for savers 

 

[irvinehomeowner]

This may be swinging off-topic and although one's religious viewpoints shouldn't really interfere with policy... it does have some influence... one con for me on Romney is Mormonism.

I don't think we've had a Mormon president (or candidate?).

 

[sgip]

It's a concern that many people have, as no matter how some may slough off religious views as "private", everyone's world view is shaped by their religious commitments. Knowing this, actions speak louder than words for me. A small example: When one candidate says they want to tax the rich, yet doesn't lead by example and voluntarily overpay on their own taxes, they aren't walking the walk. It's the "do as I say, not as I do" example that's a sticking point -  more than the persons commitment to their faith. The other candidate says they believe in private charity rather than government largess, and gives accordingly year in year out. Yes, the majority of does go to the LDS church, but it still demonstrates that they are who they say they are, both in word and in deed. Do I want to follow someone who says they are a leader, or someone who actually is a leader?

As a committed Christian, I recognize the free will choice people have to hold religious views counter to mine. The early Christian church was commanded to obey authorities and governments, even to pray actively for them to lead with fairness and truth, something that is still a commandment today. What secular political leaders ultimately do in the name of their personally held belief system is another matter. I could vote for a card carrying (fill in the radical belief system) providing would adhere to established constitutional law and the rights of all citizens no matter their race, creed, gender, or religion.

 

[socal78]

 

[winex]

This may be swinging off-topic and although one's religious viewpoints shouldn't really interfere with policy... it does have some influence... one con for me on Romney is Mormonism.

I don't think we've had a Mormon president (or candidate?).

So how do you feel about Obama's association with Reverend Wright?

 

[winex]

I think there is a 4th part to the Romney algebraic equation - a growing economy not only increases the number of tax payers, but everyone makes more money from economic expansion, so even though they pay lower rates, there is an offset from paying lower rates against higher income.

got it, icic what u mean now

Of course that is all on the revenue side.  Both Romney and Ryan say that Federal spending needs to be brought to 20% of GDP or lower from the current 24%.  Though the media paints cuts like that in draconian terms, really what they are saying is that the Federal government needs to be brought back to the level of spending it had in the pre-Obama era.

speaking of GDP and growth, haha this reminds me (although a little off topics), whats ur take on QE3?

I think it needs to be called QE(i) because it is infinite.  My opinion is that it will good stock prices and commodity prices, but that it will have no impact on the real economy.  Inflation is never a good thing.

what about its devaluing impact on the USD vs foreign currency? do u think it will actually spur USA export as they say it will?

last time we had a chance to audit the fed under legislation pushed through by libertarians, i think we found the fed wrote off 16 trillion in bailouts, total of both known bailouts n secret bailouts... i was so furious when i read that news... stuff like this and QE3 is such a disincentive for savers 

That's really a complicated issue.  If we were the only country printing money, the devaluation of the dollar would make US produced goods cheaper for foreign competitors.  But that assumes that fair trade exists and that governments wont attach tariffs to US produced goods to make them less competitive.  When all is said and done, I believe that a strong dollar policy helps the United States.  I think that with the passage of time Bernanke stands a very real chance of preventing Greenspan from being viewed as the most inept Chairman of the Fed this country has ever had.

Speaking of a strong dollar policy, and within the context of things that I wish Romney would have explained during the debate is the impact of his energy plan on our economy.  Hydraulic fracturing is one of the most exciting technologies to come around in a long time, and if this country starts acting more seriously it can be a game changer.  Imagine the impact on the strength of the dollar if the United States moves from spending some $700 billion a year importing foreign energy sources to being a net exporter of energy. 

 

[changm55]

i try not to allow religion to get into my politics... politicians can say they are super devout yet turn around and pass something counter intuitive or trample all over our constitution (sadly this happens all the time =_=... for example, im not too fond of the principles behind the patriot act even if it is for national security)... so i try to stick with platform only ... i try to just rely on logic completely... haha i know its fun to drink the kool aid occasionally, but i consciously try not to since at the end of the day its still politics...

i totally hear u about bernanke... he is one of the reasons why i actually had some serious thoughts on just saying screw it and vote 3rd party instead lol...

regarding trade, i actually liked huntsman back in the gop debates... his view on china is very different then the other GOP candidates that actually allows for a possible win-win situation...

 

[winex]

At one time I voted for every Libertarian on the ballot.  My reasoning was simple, I believe in the Constitution and wanted to support candidates who did so too.  But over time I came to the realization that we do have a two party system and the best way to get people in office who represent your interest is to pick the party closest to your own value system and then work from within that party.  The Tea Party is a perfect example of that.

 

[changm55]

well the reason why i thought of gary johnson was cause even if i vote romney, my vote doesnt count too much here in CA (u know obamas gonna get our electoral vote even if he flops big time)... so the only way i can get my voice heard would be via 3rd party even if i am just a statistic... but recently romney voiced his anger towards the fed (although limited)... haha so it got my attention again... i just wish he was more serious about it, cause right now im still not sure if hes just saying it or if he means it... haha id seriously celebrate if he fired bernanke...

 

[winex]

Actually going back to the Republican debates, Romney was one of many who said that he would fire Bernanke.