U.S. Budget Negotiations

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HintonJamesHeel said:
Revenue has stayed right at 17% of GDP, which has been the 50 year average. The issue has been expenses.
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Sigh. Here we go again. D = A-B, but somehow the value of A can't be touched because the problem is B.

1. real federal spending increased about 29% from 2019 to 2024. 56% or whatever number you quoted was nominal. So the increase of 2.4T in nominal spending was actually about 1.5T in real terms.

2. Mandatory expenses --i.e. SS, Medicare and to a lesser extent Medicaid -- rose by 1.4T.
3. Interest on the debt rose $550B.

So of the nominal spending about 2T of the 2.4T was mandatory expenses plus interest. Another $100B from veterans affairs, because medical care for wounded vets is also becoming more expensive. There was also an increase in defense department.

4. So that's pretty much all of the increase: interest, inflation, SS, Medicare, Medicaid and VA.

5. The idea that tax receipts aren't at issue is laughable. Maybe if we hadn't cut taxes in 2017, we'd have been working with a baseline deficit of $100B instead of $1T. Maybe if we hadn't cut taxes so many times, the total debt -- and thus the interest paid on it -- wouldn't be so large.

It's not as if the increases in SS and Medicare were unforeseen. Everyone knew it was coming. The GOP slashes taxes anyway.

6. I am always amused when the "gotta run government like a business" folks somehow fail to comprehend the revenue side of things. Like, if my company is losing money, the first thing to do is increase my revenues if I can. If I'm instead laying off employees while letting 15% of my receivables go uncollected, I'd say the employees should be pissed. What do you think?
 
superrific said:
Sigh. Here we go again. D = A-B, but somehow the value of A can't be touched because the problem is B.

1. real federal spending increased about 29% from 2019 to 2024. 56% or whatever number you quoted was nominal. So the increase of 2.4T in nominal spending was actually about 1.5T in real terms.

2. Mandatory expenses --i.e. SS, Medicare and to a lesser extent Medicaid -- rose by 1.4T.
3. Interest on the debt rose $550B.

So of the nominal spending about 2T of the 2.4T was mandatory expenses plus interest. Another $100B from veterans affairs, because medical care for wounded vets is also becoming more expensive. There was also an increase in defense department.

4. So that's pretty much all of the increase: interest, inflation, SS, Medicare, Medicaid and VA.

5. The idea that tax receipts aren't at issue is laughable. Maybe if we hadn't cut taxes in 2017, we'd have been working with a baseline deficit of $100B instead of $1T. Maybe if we hadn't cut taxes so many times, the total debt -- and thus the interest paid on it -- wouldn't be so large.

It's not as if the increases in SS and Medicare were unforeseen. Everyone knew it was coming. The GOP slashes taxes anyway.

6. I am always amused when the "gotta run government like a business" folks somehow fail to comprehend the revenue side of things. Like, if my company is losing money, the first thing to do is increase my revenues if I can. If I'm instead laying off employees while letting 15% of my receivables go uncollected, I'd say the employees should be pissed. What do you think?
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You do understand part of the deficit now in this bill is because the baseline assumed tax rates would expire? It’s a bit of fuzzy math. When the tax rates were implemented, expectation was the tax revenue would fall but they rose.
 
HintonJamesHeel said:
You do understand part of the deficit now in this bill is because the baseline assumed tax rates would expire? It’s a bit of fuzzy math. When the tax rates were implemented, expectation was the tax revenue would fall but they rose.
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1. You are again mistaken. Nobody was expecting tax revenue to fall in absolute terms. People were expecting tax revenue to decrease as compared to what would have happened without the tax cuts. And actually the tax cuts proved even a little worse than projected based on this measure.

2. Tax revenues always go up, except in recessions. Economic growth and inflation are enough to cover even huge decreases in tax rates or tax collection %. Nobody predicts declining tax revenue; projections are almost always done in terms of % of GDP, etc.

3. The baseline has to assume tax rates will expire. That's because the tax cuts initially were premised on a 10 year sunset, which is what kept the total deficit impact within the bounds of the Byrd Rule. If, after expiration, you can ignore the sunset then you're just printing money at that point. Don't give me "fuzzy math" bullshit. The math is clear. The GOP is decadent and corrupt.

Imagine if you could run government this way:

2025: This bill will provide a one-time benefit to Americans in the amount of $100B in extra spending this calendar year.
[bill passes]
2026: We wouldn't want to take away that $100B, so we'll measure our deficits based on current baseline. Keep the $100B -- it's free!

You're the guy who is talking about reducing deficits. Surely you'd agree that is complete bullshit and is not a serious attempt at financial stewardship.
 
HintonJamesHeel said:
Federal income tax rate can absolutely be 0%. I guess it’s actually negative. As a lot get credits back after paying 0% income tax.
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That doesn't make the tax rates negative.

If the tax I owe is calculated as r*I -C, where r is my tax rate, I is my income, and C are credits that I'm due, then my tax could be negative. My tax rate, though, plainly is positive. All that has to be true is C > r*I.

You're getting confused by the idea of a tax expenditure. The types of tax credits you're talking about don't really have anything to do with taxes at all. The child "tax credit" is actually just a cash handout to people, given that it's refundable. It's styled as a tax credit to make the delivery easier. Rather than send out separate checks, the credits are paid through tax refund checks. That doesn't make it a tax cut. It's a tax expenditure.

The reason that the budget uses so many tax credits was chicanery from the GOP in the 1980s and 1990s. They were stymied by a) the political demands for social safety net expenditures and b) their own strident rhetoric about government spending. They papered over this contradiction by embedding the expenditures within the tax code, allowing them to claim, "we're not handing out money; we're just collecting less in taxes" which was true only in a formal sense. Economically speaking, it's just a handout in different form. Which isn't necessarily bad; I support many types of "handouts."

I'm not going to argue about this, because it's a fact. If you want to argue with arithmetic, be my guest but I'm not indulging you. The formula above, T = r*I - C is indisputable. It clearly demonstrates that people who get money back on their taxes are nonetheless paying a tax rate greater than 0%. End of story.
 
Referring to the comments that so many people don't pay taxes and tax expenditures that was referred to above.

This is the system we have, and it requires that the tax code do much more then it should which is why so many folks hate it. Therefore, to treat everyone fairly (and somewhat equally) there is one big problem that has to be reconciled. That's child dependents. To reconcile it, the tax system hands back a great deal of tax credits in the form of the child tax credits and the Earned Income Tax Credit. So yes, it looks like many people are not paying taxes, but its because of this reconcilement issue

Then you have the other problem of the standard deduction which is getting rather high. And I believe the Republicans under this bill are again increasing it.
 
BlueSmoke said:
Referring to the comments that so many people don't pay taxes and tax expenditures that was referred to above.

This is the system we have, and it requires that the tax code do much more then it should which is why so many folks hate it. Therefore, to treat everyone fairly (and somewhat equally) there is one big problem that has to be reconciled. That's child dependents. To reconcile it, the tax system hands back a great deal of tax credits in the form of the child tax credits and the Earned Income Tax Credit. So yes, it looks like many people are not paying taxes, but its because of this reconcilement issue
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Well, that's one of the big problems, but otherwise you're absolutely correct. That the government chooses to pay what amounts to child support to families (and the politicians repeat over and over again that this is their intent) styled as a "tax refund check" or a subsidy is more or less irrelevant wordplay.
 
Another way of looking at this child reconcilement issue is the way Senator Mitt Romney did a few years back. He thought every family with a child should get a monthly check. If you did something along those lines, you could then reform the tax system so that everyone paid the same progressive tax rates. Maybe start with a low tax rate, get rid of the standard and itemized tax deductions.........and then all of a sudden you wouldn't have people complaining that too many people don't pay income taxes.
 
BlueSmoke said:
Referring to the comments that so many people don't pay taxes and tax expenditures that was referred to above.

This is the system we have, and it requires that the tax code do much more then it should which is why so many folks hate it. Therefore, to treat everyone fairly (and somewhat equally) there is one big problem that has to be reconciled. That's child dependents. To reconcile it, the tax system hands back a great deal of tax credits in the form of the child tax credits and the Earned Income Tax Credit. So yes, it looks like many people are not paying taxes, but its because of this reconcilement issue

Then you have the other problem of the standard deduction which is getting rather high. And I believe the Republicans under this bill are again increasing it.
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This may have been mentioned already, but didn't Trump proclaim that the tariff revenue will allow us to eliminate income tax ?
 
heelinhell said:
This may have been mentioned already, but didn't Trump proclaim that the tariff revenue will allow us to eliminate income tax ?
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I don't have to look that one up. Of course he did!!! Now, he might have added a qualifier or two. Like it might or it might come close to eliminated the income tax.
 
One reason I hate Trump's assface so much (maybe the main reason) is his infantilization of our language. The fact that he has named this bullshit "the big beautiful bill" and that people are actually referring to it as such (and "BBB" isn't much better) is depressing. It's like a stupider version of Pee Wee's Playhouse but without the fun...
 
hedge said:
One reason I hate Trump's assface so much (maybe the main reason) is his infantilization of our language. The fact that he has named this bullshit "the big beautiful bill" and that people are actually referring to it as such (and "BBB" isn't much better) is depressing. It's like a stupider version of Pee Wee's Playhouse but without the fun...
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Try as I might, I couldn't get "OBs" (i.e. "obese") to catch on for the One Big Beautiful Bill...
 


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I highlighted the legal status portion not as an objection but because I have seen POTUS and other GOP pols claim that only illegal immigrants and fraudsters will lose Medicaid coverage under the House bill.

What’s crazy is Trump just commuted the sentence of a an actual convicted Medicaid fraudster who was serving 30 years for defrauding Medicaid and Medicare of tens of millions of dollars with tens of thousands of fake claims. So top down Medicaid fraud is fine, I guess(??)
 
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