Deficit commission proposal

[Lusankya]

Originally Posted by Starkipraggy

If you increase tax but increase subsidies to the lower and middle class to offset the tax, wouldn't that work out as well?

I was under the impression that people would be trying to save whatever they can, so instead of letting them save the little money it can get taxed so you can subsidise them.

The theory is, people are more likely to spend money that they keep as opposed to money that they get in a check from the government.

Your method is also just unnecessarily complicated and takes more paperwork, which takes more money.

[Lord Fedora]

Originally Posted by Starkipraggy

If you increase tax but increase subsidies to the lower and middle class to offset the tax, wouldn't that work out as well?

I was under the impression that people would be trying to save whatever they can, so instead of letting them save the little money it can get taxed so you can subsidise them.

So... we'd be taking their money and giving it right back to them? What, if anything, does that accomplish, if the money's all ending up right back where it started, other than, as Lus pointed out, creating more paperwork and therefore costing more money?

Aside from that, compare the Bush tax refund, which no one spent, to the Obama tax cut in the stimulus, which people did spend (and barely knew about but yeah). Lus is correct, the point isn't that they have money, it's that they're not just being given money.

[Blood Red Lucario]

I was highly disappointed in the compromise. But unfortunately the Republicans are going to make congress as stagnant as possible. Why must the upper 2 percent keep its tax break I wonder? The party focused so hard on the countries debt in the midterm elections only to sit and do nothing about it when a possible solution comes.

Before focusing on taxes how about legislation focusing on gutting out outsourcing. Or even tax the companies that outsource even more to promote local jobs. People don't create jobs, corporations do, and right now our corporations are running free with 800% profits from cheaper labor for foreigners. Some companies deny their work force a 5% pay raise just because it will hurt the overwhelming surplus.

I propose Capital Hill focuses elsewhere now that this compromise has been made.

[Starkipraggy]

It's more paperwork which costs money, but by taxing the upper classes, you get that much more money.

[tl;dr]

Say we have 3 people: A, B and C. A earns $1 a day. B earns $10 per day. C earns $1000 a day. Increase taxes for all of them by 10%, and you're getting an extra of $0.10 + $1 + $100. You can then spend like $5 on subsidies for A and B and have a net gain of around $96.10. C has like 900 dollars left when A is getting by on a dollar a day, so he doesn't need any subsidies. On the other hand you can like give A $3 and B $2 using that $5 for subsidies, and they'll probably die of happiness or something. Even if we have like 10 each of A and 10 each of B but only 1 of C, you collect $1 + $10 + $100. Then you spend like $25 on subsidies for all the As and Bs. You give each A $1 and you give every B $1.50, and you have a net gain of $86 bucks. That's still quite a hefty sum.

[/tl;dr]

If you're barely getting by you'll be spending whatever money you can get anyway. If you kind of need like an extra dollar a day to maintain your habit of eating Macs everyday and you hear the government is giving out cheques for 30 bucks a month, you will probably take it and spend it. If you can scrimp, you save the rest. And more paperwork = more jobs = boost the economy. More useful than giving tax breaks to the top 2% in the hope that they create jobs for the Americans. Hell, as if, they'll continue shifting production overseas and stagnating your pay. Go and find a game that simulates running a business, and come back and tell me that you played without maximising your profit; without completely ripping off every single person that so much as crosses your path as much as possible. Without lying. What you do in the game is exactly what those rich guys are doing.