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View Full Version : Economics A Very Simple Plan To Avoid the Fiscal "Cliff"


RINGLEADER
11-19-2012, 08:55 AM
The Ringleader 3-Point Plan:

1. Give Obama the tax increases for wealthy individuals spread out across 8-years (going up .9% every two years until it reaches the full 3.6%).

2. Enact meaningful spending reforms that takes effect immediately and serves as a trigger for each tax increase above.

3. Enact meaningful tax reform with small business taxes reduced across the board and a benchmark to define what qualifies as a small business. For too long Democrats AND Republicans have been too unwilling to carve out this definition.

Politically, it gives the GOP some cover (it's less than a 1% increase, requires reform, requires spending cuts) while giving Obama what he promised. And fiscally it could actually bring capital to the market from those who are actually employing people and not hiding behind the 'S' Corp designation. It wouldn't be perfect and some people would try to skirt it, but it would work for most, benefit business growth and provide encourage capital investment, and actually force some real change to entitlements and spending.

Thoughts on how to make it better?

La literatura
11-19-2012, 08:56 AM
Subchapter S includes a definition of small business. Less than 100 people (family members are included as one), and some other things.

BucEyedPea
11-19-2012, 09:03 AM
Thoughts on how to make it better?

I'll take the "fiscal cliff" with the automatic across the board spending cuts and tax increases.

Tax increases...on everyone. If everyone has to pay—>true reform.

It only cuts military to 2006 levels which by the sound of the politicians is draconian?

This "fiscal cliff" mantra is all about save the govt and the bureaucrats. I say FREE the people from both of 'em!

Time to start is NOW!

RINGLEADER
11-19-2012, 09:05 AM
Subchapter S includes a definition of small business. Less than 100 people (family members are included as one), and some other things.

Right, but if you're increasing rates on individuals you have to put some type of minimum employee threshold or create an individual business definition. Otherwise everyone will just incorporate to protect their individual rates.

I don't agree with tax increases at all, but if you're going to do it you have to do it in a way that protects real business and targets just the personal income taxes.

RINGLEADER
11-19-2012, 09:07 AM
I'll take the "fiscal cliff" with the automatic across the board spending cuts and tax increases.

Tax increases...on everyone. If everyone has to pay—>true reform.

It only cuts military to 2006 levels which by the sound of the politicians is draconian?

This "fiscal cliff" mantra is all about save the govt and the bureaucrats. I say FREE the people from both of 'em!

Time to start is NOW!


Well, the fact is that even these "grand bargains" don't do anything meaningful. Cutting $4 trillion from a budget due to bloat by another $10 trillion doesn't do much to really solve the problem. The spending reforms have to go farther because the tax increases could never fill the void.

BucEyedPea
11-19-2012, 09:15 AM
Well, the fact is that even these "grand bargains" don't do anything meaningful. Cutting $4 trillion from a budget due to bloat by another $10 trillion doesn't do much to really solve the problem. The spending reforms have to go farther because the tax increases could never fill the void.

I don't expect either the spending cuts or taxes to handle it completely...just reduce it. I just think if everyone across the board suffers we'll never get any significant change. Afterall, if the voters keep electing politicians that create the problem, then they need to feel the consequences.

La literatura
11-19-2012, 09:17 AM
Right, but if you're increasing rates on individuals you have to put some type of minimum employee threshold or create an individual business definition. Otherwise everyone will just incorporate to protect their individual rates.

I don't agree with tax increases at all, but if you're going to do it you have to do it in a way that protects real business and targets just the personal income taxes.

Okay, I'm a little confused by what you're arguing. Most small businesses are sole proprietorships or partnerships, and partnership taxes pass through to the partners, who are then taxed as individuals.

CoMoChief
11-19-2012, 10:56 AM
how about we just get rid of the income tax?

mnchiefsguy
11-19-2012, 12:01 PM
The Ringleader 3-Point Plan:

1. Give Obama the tax increases for wealthy individuals spread out across 8-years (going up .9% every two years until it reaches the full 3.6%).

2. Enact meaningful spending reforms that takes effect immediately and serves as a trigger for each tax increase above.

3. Enact meaningful tax reform with small business taxes reduced across the board and a benchmark to define what qualifies as a small business. For too long Democrats AND Republicans have been too unwilling to carve out this definition.

Politically, it gives the GOP some cover (it's less than a 1% increase, requires reform, requires spending cuts) while giving Obama what he promised. And fiscally it could actually bring capital to the market from those who are actually employing people and not hiding behind the 'S' Corp designation. It wouldn't be perfect and some people would try to skirt it, but it would work for most, benefit business growth and provide encourage capital investment, and actually force some real change to entitlements and spending.

Thoughts on how to make it better?

Sounds pretty reasonable to me. Both sides get some of the things that they want, but both sides also will get things that they will bitch about. Usually, when both sides are not entirely happy with a deal, it is a good compromise.

mnchiefsguy
11-19-2012, 12:02 PM
Plus, I like the fact that the tax increases are tied to the spending cuts. If the spending cuts fail to happen, then so do the tax increases. It keeps everyone honest.

BucEyedPea
11-19-2012, 12:09 PM
Hmmm, what about funding Obamacare? Especially those exchanges that some states refuse to set up and the Medicaid expansion. I'd trade tax increases on all, small, to dump the whole expensive and bloated program.

FD
11-19-2012, 02:29 PM
Well, the fact is that even these "grand bargains" don't do anything meaningful. Cutting $4 trillion from a budget due to bloat by another $10 trillion doesn't do much to really solve the problem. The spending reforms have to go farther because the tax increases could never fill the void.

Since the main spending problem by far is on Medicare and Social Security, structural reforms to these programs are a pretty effective way of reducing long run spending and dont rely on budgetary gimmicks like caps. They also tend to work out, for instance the Reagan increase in the SS eligibility age has slowly but surely taken effect with little complaint. The discretionary component of our budget has been fairly stable over the past decades, as well.

RINGLEADER
11-19-2012, 03:52 PM
Okay, I'm a little confused by what you're arguing. Most small businesses are sole proprietorships or partnerships, and partnership taxes pass through to the partners, who are then taxed as individuals.

Correct, but there has to be a way to segregate the tax rate for business from that of personal income or the Dems won't reduce the rates (which is needed to get them to go with something other than an across-the-board increase) and the GOP won't go along with the income tax increase if it impacts business.

mlyonsd
11-19-2012, 05:53 PM
I'd be ok with it if the incremental tax increases were across the board over 8 years instead of just on one class.

RNR
11-19-2012, 06:00 PM
Ring "3 point" is out of style :doh!: it has to be a 5 or more point plan nowadays :shake: ;)

Dayze
11-19-2012, 06:11 PM
how about we just get rid of the income tax?

I'd like to watch a documentary on that subject if one is available.
I think it's an interesting topic.

Direckshun
11-19-2012, 08:03 PM
The Ringleader 3-Point Plan:

1. Give Obama the tax increases for wealthy individuals spread out across 8-years (going up .9% every two years until it reaches the full 3.6%).

2. Enact meaningful spending reforms that takes effect immediately and serves as a trigger for each tax increase above.

3. Enact meaningful tax reform with small business taxes reduced across the board and a benchmark to define what qualifies as a small business. For too long Democrats AND Republicans have been too unwilling to carve out this definition.

Politically, it gives the GOP some cover (it's less than a 1% increase, requires reform, requires spending cuts) while giving Obama what he promised. And fiscally it could actually bring capital to the market from those who are actually employing people and not hiding behind the 'S' Corp designation. It wouldn't be perfect and some people would try to skirt it, but it would work for most, benefit business growth and provide encourage capital investment, and actually force some real change to entitlements and spending.

Thoughts on how to make it better?

I don't think this is too bad of a plan -- any idea how much this would net us in budget improvements?

Taco John
11-19-2012, 10:59 PM
Here's my plan for the fiscal cliff:

http://cdx.dexigner.com/news/xw/21247.jpg


I don't see the problem. It took us a long time to get to this grand bargain. Why do we need to "fix" it?

Stewie
11-20-2012, 03:00 PM
Bernenke and Geithner hate this kind of plan.

FishingRod
11-20-2012, 03:24 PM
Right now we have the Obama Administration offering the grand bargain that the right side of the isle should give him what he wants and then after that they can negotiate on some of what they want. Obviously that is not how it is being spun but, that pretty much sums it up.

The Right can’t give in and avoid a mob with pitchforks, which the left of course knows perfectly well. This allows all of the left to blame the impending tax increases and spending cuts on the Republicans. On the other hand it also allows both the Democrats and republicans to honestly ( by political standards) to give a portion of those rates back and expect the public to be thankful because, after all they voted to lower your taxes. Probably (if figured with the slimy skills they posses) the largest tax cut in the history of the United states.

Calcountry
11-20-2012, 05:02 PM
I'll take the "fiscal cliff" with the automatic across the board spending cuts and tax increases.

Tax increases...on everyone. If everyone has to pay—>true reform.

It only cuts military to 2006 levels which by the sound of the politicians is draconian?

This "fiscal cliff" mantra is all about save the govt and the bureaucrats. I say FREE the people from both of 'em!

Time to start is NOW!agreed. Time to rise above politics. It is time to jump, together.