Posted on 10/26/2011 1:59:01 AM PDT by Cincinatus' Wife
This plan increases the size and scope of the IRS. It does not get rid of the current tax code. The whole point of the flat tax was to get rid of the current tax code.
I think it is interesting that the same people who complained about Cain’s new revenue stream have no problem with a completely new revenue system!!!
(and in fact, the 9% is not actually a new stream, but a replacement for the payroll and 4 other hidden taxes).
Replacement is the way to go. Not on top of, not next to.
In the long term tax cuts may spur investment, may create jobs, and may cause greater tax revenue. In the short run it will cut federal receipts and increase the deficit. That was true under Reagan, there is no reason to believe it won't be true under Perry. So without massive and immediate cuts in spending, Perry's plan create even greater deficits than we have right now into the $2 trillion range. And those cuts are missing from Perry's proposal. All I've seen is a token $100 billion cut in non-defense discretionary spending. That isn't a proposal, that's a joke.
As for spending, part of Perry’s plan is to reduce spending to 18% of GDP, from the current levels of around 25%. This would put us back to spending levels of the late 1990s, when we were running budget surpluses.
And how will he do that? Even to make the Cut, Cap, and Balance proposal of spending at 22.5% of GDP by 2012 would require a budget of $2.9 trillion and cuts in the $800 billion range from 2011. Again, where are these cuts going to come from? If Perry honestly believes he can bring spending down to 18% of GDP, and I wonder if he realizes what that means, then he should have some ideas. He has said non-defense discretionary spending is off the table, in fact he's talked about increasing that. In order to get the rest of the savings out of discretionary funds he would literally have to do away with every single department and agency other than Defense and Homeland Security. Everything, top to bottom. And even that may leave a deficit.
So let's get serious here and start addressing the problem. The government spends too much. Where is he going to cut?
Right now, Cain and Romney are far and away in the lead. Why even bother with Perry? It makes no sense.
Just be fair and besides, stop worrying about the Perry's. They're done. Start worrying about Romney and Obama.
Yes...right now is the key phrase. Things change, sometimes quickly. I don't hate Perry, or any of the other candidates. I just don't think he's a very strong choice, based on some of his positions as governor and performance to date.
By the polls it looks like nobody wants to "get dirty".
“In the short run it will cut federal receipts and increase the deficit. That was true under Reagan, there is no reason to believe it won’t be true under Perry.”
That was not true under Reagan. The fact is that Reagan’s tax cuts reduced the top marginal rate from 70% down to 50%, then to 35%. He also cut everyone else’s taxes across the board by an average of 25%. During the Reagan years, receipts to the treasury DOUBLED. This of course is because when the job creators are allowed to keep more of what they earn, they tend to invest it back into growing their business, which in turn creates more jobs and more taxpayers.
Under Reagan, we didn’t have to wait several years for this to happen, it was already happening by 1983, and continued non-stop until the small recession we had in 1991-1992. The only reason deficits increased under Reagan is because we had a Dem Congress during that entire time that spent more than we took in. When this same kind of growth occurred in the late 1990s under a Republican-controlled Congress, we had budget surpluses.
Part of Perry’s plan lowers the corporate tax from 35% to 20%, taking us from one of the least competitive business environments to one of the better ones. This along with elimination of the cap gains and dividend tax will encourage massive investments by the job creators, which is not something we will need to wait several years to see the affect of.
On the spending side, all it takes is a will to reign in the spending. It’s really not that complicated. We may not be able to get back to 18% of GDP overnight, but we can do it over time. If we just returned to pre-Obama spending levels FY 2007, accompanied by strong economic growth, we could reduce the deficit back to where it was under Bush-a couple hundred billion instead of 1.5 trillion, which would be a big step in the right direction.
One last thing-asking the question “where are these cuts going to come from?” tells me that you are not really a believer that government can and should make some drastic reductions in its spending levels. We were getting along just fine with 2007 spending levels-even then the government was far too bloated, so I don’t think it will be too hard to identify places we can cut. It just requires the will to follow through with these cuts.
One place to start is by eliminating base-line budgeting, so we stop calling a reduction in the rate of increase a “cut.” Then, we can look at some of these departments like the EPA that don’t really serve much purpose. I don’t know what specifically Perry has in mind, perhaps you should ask him. But I do know that his overall goal is to bring spending back to 18% of GDP. I think that’s very achievable over time, especially if we have strong economic growth, which will make the GDP that much larger.
I think Gingrich, Cain and Perry all recognize the need to reign in this bloated, oversized govn’t. Romney, on the other hand, he just wants to tinker around the margins, and not upset the applecart. With the question “where are these cuts going to come from”, it seems that this is your mindset as well, in which case, maybe Romney is your guy.
Over time it did go up. In the first years following the deficit doubled or tripled as well. If Perry does that we're talking $2.5 trillion to $3 trillion annual deficits. It'll make Obama look like a piker by comparison. Unless, of course, Perry also cuts spending. Something he doesn't seem to want to talk about in any detail.
On the spending side, all it takes is a will to reign in the spending.
We have a Congress without the will, and suspicions about the candidate as well.
One last thing-asking the question “where are these cuts going to come from?” tells me that you are not really a believer that government can and should make some drastic reductions in its spending levels.
That sounds like the kind of comment one would expect from someone who has no idea how to cut the spending either.
Then, we can look at some of these departments like the EPA that don’t really serve much purpose.
The current deficit is running about $1.3 trillion. You know what the EPA's budget for 2011 is? $9 billion. Get real.
I don’t think we’ll be able to agree on this, because we have a fundamental difference of opinion on the affect of tax cuts on an economy. It’s my view-and I believe that is supported by history-that cutting taxes spurs almost immediate economic growth, which brings additional jobs/taxpayers and reduces dependency on programs like unemployment. The statistics show that under Reagan’s 8 years the economy grew by around 30% and receipts to the treasury doubled. These are facts-you can look them up.
Given that tax cuts have been proven to bring economic growth, I don’t see why we shouldn’t do them again, since economic growth is what we need to get us out of a recession and increase receipts to the treasury. You keep claiming that if Perry does this tax plan, the deficit will skyrocket. Given economic growth/jobs is what’s needed to increase the taxpayer rolls, what would your solution be if you don’t believe we can afford to cut taxes?
On spending, you seem to be saying that there’s just no way to reign in the spending because the present Congress hasn’t done so and we don’t know what a new GOP POTUS would do. Then, you ask for specifics, I name one as an example, and you say “oh yeah, that’s only $9 billion, get real.” Well, there’s thousands of specific places that can be cut out of a $4 trillion plus annual budget. As the saying goes, “a billion here and a billion there, and pretty soon you’re talking about real money.” I don’t have the time nor the inclination to go over every one, because it would take hours to list them all.
Bottom line-my view is we are staring at financial calamity as a nation if we don’t take drastic action soon. Just a few years ago, we were running $200 billion deficits as opposed to $1.5 trillion. You say no one has the political will to take us back to 2007 spending levels. I say first off that Congress will do it if there is a POTUS that is committed to it, the American people hold their feet to the fire, and they finally come to the realization that we have no choice but to make drastic cuts to the govn’t.
In your world, it seems that all this is impossible. That we are just doomed to keep spending exponentially more every year and by God, we better not cut taxes, cause you know that might increase the deficit (a classic liberal talking point) and it’s already too high. So what do we do? Like I said before, based on your worldview, maybe you’re best bet is to go with the ‘safe’ choice (Romney). That way, we wont have to upset anybody or try to do any heavy lifting and the GOP can at least have control over the govn’t for a while as the country heads over the cliff.
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