Volcker: Taxes likely to rise eventually to tame deficit

Source: Reuters

(Reuters) - The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker said on Tuesday.

Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax "was not as toxic an idea" as it has been in the past and also said a carbon or other energy-related tax may become necessary.

Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves. "If at the end of the day we need to raise taxes, we should raise taxes," he said.

Read more: http://www.reuters.com/article/idUSTRE6355N520100406

Pay the bills. You want China to own us - don't

:hi: Just say'n.

I think Americans should aspire to a more spartan lifestyle, with a goal of being a less obtrusive member of the world community.

Give us the basics, food, shelter, healthcare, and let the goverment take care of the rest.

We got healthcare. There are programs to get food, we need more. Shelter is an issue that can be dealt with.

We have the right people to make it happen.

As of right now, not the best idea ever. Starting in a couple years we have to though.

at least back to where it was in 1970.

These "take this over there, that over there, then divide by 3" con games only serves to increase the likelihood that those you need to increase the taxes on will find a dodge.

Simple changes are the hardest to cheat on.

if we raise taxes, we won't have jobs.

The rich create jobs!!

We can't tax them or our jobs will go to China and India!!

:sarcasm: :sarcasm:

The simple fact is that we are nearing the point of no return.

Taxes DO slow down the economy. Thus, simply looking at the total income of the rich and multiplying it by an increase in tax rates does not give you an accurate picture of what will be raised. Sadly, we as a nation have gotten to the point where everyone gets to share in the pain.

after WWII when the top tax bracket was 90%.

Let's go back to having corporations actually pay taxes....
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=8074983&mesg_id=8078964

Let's remove the lid on SS income.

Now we're talkin'!

Don't forget, back after WW2 there were a million exemptions so that nobody actually paid the 90% rate.

after all the shit we've seen... the bailouts, the tax cuts for the rich, the unbelievably bloated military budget, the death of the middle class, the horrific growth of imbalance between rich and poor, etc... why not give it a try?

Back in the 50s and early 60s the top marginal rate was 91% on income over $400,000. Using 1959 as the base year, the inflation-adjusted equivalent amount would be about $3,000,000. The top rate could be reserved for even higher incomes ($10,000,000 per year, for example) reflecting the startling expansion of income inequality in the intervening years.

In my belief system, compensation at that level is commonly mischaracterized as earnings when takings or just plain looting would usually be the appropriate description. A much higher top marginal income tax rate would also probably need to be supplemented by higher taxes on capital gains and dividends if one wanted to REVERSE the extraordinary inequality of wealth and income that has developed in recent years.

A more progressive tax system would reduce the incentive to loot the economy by confiscating an ever-increasing share of ill-gotten (but still not illegal) gains.

The 90% figure refers to the top marginal rate. It doesn't mean that someone who makes over $2 million pays 90% of their entire income in taxes. It means that the amount over $2 million is taxed at 90%. Nobody needs more than $2 million a year to live. Nobody.

Furthermore, the most productive period in our entire history was when the top rate was high like that (90% until Kennedy, then lowered to about 70%.) This also coincided with the largest growth of the middle class.

So, no, high taxes doesn't mean "hurt the economy." That's a 30-year-old canard started by, of course, the obscenely wealthy and their sycophants in the media and various right-wing "think tanks" who exist merely to get face time to spew the propaganda.

It's as simple as, nobody will put forth the effort for 10% of their wages.

The people who speak four or five languages and make the global phone calls on a Midnight to 6pm interrupted shift, to keep the production lines open, will go hit the golf course instead.

When in history did people refuse to make more money in order to reduce their tax burden? I only wish my income tax liability were a million bucks a year.

Besides, I don't think you understood Reply #17 and need to read it again: a 90% marginal tax rate does not leave people with only 10$ of their entire wages.

and thank you.

Alyce

Afterall, why should the rich pay taxes? All of them got their money fairly? Right?
:sarcasm:

I would like to see the capital gains tax raised to 50%.

They worked their ass off getting out of the womb.

Roads, airports, harbors, bridges, whatever.

And, they benefit from society more than do the poor, too.

So, taxing the rich more is only fair.

Granted, that is a generalization. Some rich folk may do nothing but sit and think about how much income their inherited wealth is earning while they blink. But tax is blunt instrument, not an individualized matter anyway.

I would Value add tax all luxury items, and I mean median luxury stuff too like LCD flat panels, Small boats, all cars except moderate hybrid sedans, hot tubs, Computers, high level appliances the point of the tax would be if you want something of luxury it is going to cost you a pretty penny the rest of us make due with second hand things now and fix what we have instead of out buying new.

If I really had my way I would make the rich pay more for gas, food, and utilities it hardly seems fair that Tom Brady and I pay the same for a gallon of gas if the price goes up even modestly then one of us has to reduce their food consumption in order to accomplish the simple task of getting to work and the other one could care less if gas was $100 per gallon they still wouldn't blink about their transporation needs.

A luxury tax on LCD TV's and cars? I'd refuse to pay.

Because that would trigger a massive revolution.

and we need to get rid of the tax cutes for the wealthy. What's happening with that?

You mean like nearly all new televisions sold today (except for plasma and LED)? Tubes are down to a percentage or two, and trade mostly on the used market. That would also push more people to keep tube TVs in service, which means more electrical demand and thus more emissions from coal-fired plants. It also means more EM radiation directed at your face - great idea there.

Tax computers? You mean make more people reliant on Fox News and CNN, or their local Richard Mellon Scaife-owned birdcage liner. Great way to make them Republican fodder or make them tune out of current events entirely. "High level appliances"? Does that include dishwashers, washing machines, dryers, furnaces, and fitness equipment? Heavily taxing every car except for those that cost upwards of $33,000? Yeah, that's going to resonate with voters!

The US is socially balkanized and something needs to connect us together as good "Americans". Dana ; )

Break it down for the warmongers just how much of a socialist leech they've become.

Whenever they say "tax cut", it means cut taxes for rich people. But whenever they say "raise taxes" or "entitlement reform", it means screw the poor... again. They only call it class warfare when we fight back.

Not so fucking funny though is it! :hi:

how about that

1.) Raise the Social Security tax ceiling from $107K to $500K.

2.) Increase the marginal income tax rate to 40% for amounts above $400K and 50% for amounts above $1 million.

Those two things won't affect the poor or middle class at all, and bring in about $200 billion extra annually.

Use $100 billion to pay for healthcare and Social Security, and the other $100 billion to pay off the debt.

Wealthy people always complain about taxes, yet when taxes are cut for them, they don't use the extra money to contribute to the economy or society at all. If a person who makes $1 million gets an extra $25,000 back because of high tax cuts, are they going to spend that $25K, contributing to the economy? If they are a corporate exec, and their company is suddenly flush with cash from tax cuts, are they going to hire a bunch of new people and create jobs? In reality, no. They report great profits, causing stock prices (and their own stock options) to increase in value. However, no new jobs.

Or they just sock it away in offshore bank accounts, accruing interest. I'd rather it be used to generate GDP and American jobs by the government if the individual wealthy person or company won't.

Leave the $107,000 cap as is, but have the tax kick in again at around $250k. That way, you don't overly burden those who might have come to depend on the extra income.

But really, we should be reducing FICA to pre-Reagan levels, stopping our illegal and expensive wars and bringing back Eisenhower-level taxes on the rich.

.

Income taxes consist of TWO components - taxable income and tax rate. Sure, tax rates were a ton higher back then. However, you could deduct damn near anything. The result back then was an effective rate of next to zero (even with a 90% marginal rate). In fact that is the reason the enacted the AMT. While tax rates were dropped, the number of items deductible in calculating taxable income were greatly reduced as well.

$100 billion would only be a drop in the bucket and would not even put a small dent in our multi trillion dollar national debt. Get real.

Whether or not a VAT would work is beside the point, as others here have pointed out already. Maybe it would be worth considering once a real progressive income tax structure was put into place, ridiculous war spending was stopped, corporate tax loopholes closed, etc.

They've sucked enough out of us.

We've spent too much defending other countries. Let's pare down to a small defense force. That's all we need.