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It's Budget Week at the White House!
enlightenedbum
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So today and tomorrow we're seeing the rollout of Obama's first budget.
Right now there's a Fiscal Responsibility Summit. Live video here.
Tomorrow the President is giving a State of the Union type thing introducing his budget and making the initial argument for it.
The Washington Post has a preview here.
So I thought I'd make a thread to discuss the introduction of the budget plan and hopefully we can discuss all the progressive taxation stuff here instead of in the now fundamentally defunct Stimulus thread. Enjoy!
Right now there's a Fiscal Responsibility Summit. Live video here.
Tomorrow the President is giving a State of the Union type thing introducing his budget and making the initial argument for it.
The Washington Post has a preview here.
President Obama is putting the finishing touches on an ambitious first budget that seeks to cut the federal deficit in half over the next four years, primarily by raising taxes on businesses and the wealthy and by slashing spending on the wars in Iraq and Afghanistan, administration officials said.
In addition to tackling a deficit swollen by the $787 billion stimulus package and other efforts to ease the nation's economic crisis, the budget blueprint will press aggressively for progress on the domestic agenda Obama outlined during the presidential campaign. This would include key changes to environmental policies and a major expansion of health coverage that he hopes to enact later this year.
A summary of Obama's budget request for the fiscal year that begins in October will be delivered to Congress on Thursday, with the complete, multi-hundred-page document to follow in April. But Obama plans to unveil his goals for scaling back record deficits and rebuilding the nation's costly and inefficient health care system tomorrow, when he addresses lawmakers and budget experts at a White House summit on restoring "fiscal responsibility" to Washington.
Yesterday in his weekly radio and Internet address, Obama said he is determined to "get exploding deficits under control" and said his budget request is "sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don't, and restoring fiscal discipline."
Reducing the deficit, he said, is critical: "We can't generate sustained growth without getting our deficits under control."
Obama faces the long-term challenge of retirement and health programs that threaten to bankrupt the government years down the road, as well as the more immediate problem of deficits bloated by spending on the economy and financial system bailouts. His budget proposal takes aim at the short-term problem, administration officials said, but also would begin to address the nation's chronic budget imbalance by squeezing savings from federal health programs for the elderly and the poor.
Even before Congress approved the stimulus package this month, congressional budget analysts forecast that this year's deficit would approach $1.2 trillion -- 8.3 percent of the overall economy, the highest since World War II. With the stimulus and other expenses, some analysts say, the annual gap between federal spending and income could reach $2 trillion when the fiscal year ends in September.
Obama proposes to dramatically reduce those numbers, said White House budget director Peter Orszag: "We will cut the deficit in half by the end of the president's first term." The plan would keep the deficit hovering near $1 trillion in 2010 and 2011, but shows it dropping to $533 billion by 2013, he said -- still high but a more manageable 3 percent of the economy.
To get there, Obama proposes to cut spending and raise taxes. The savings would come primarily from "winding down the war" in Iraq, a senior administration official said. The budget assumes continued spending on "overseas military contingency operations" throughout Obama's presidency, the official said, but that number is lower than the nearly $190 billion budgeted for Iraq and Afghanistan last year.
Obama also seeks to increase tax collections, mainly by making good on his promise to eliminate some of the temporary tax cuts enacted in 2001 and 2003. While the budget would keep the breaks that benefit middle-income families, it would eliminate them for wealthy taxpayers, defined as families earning more than $250,000 a year. Those tax breaks would be permitted to expire on schedule in 2011. That means the top tax rate would rise from 35 percent to 39.6 percent, the tax on capital gains would jump to 20 percent from 15 percent for wealthy filers and the tax on estates worth more than $3.5 million would be maintained at the current rate of 45 percent.
Obama also proposes "a fairly aggressive effort on tax enforcement" that would target corporate loopholes, the official said. And Obama's budget seeks to tax the earnings of hedge fund managers as normal income rather than at the lower 15 percent capital gains rate.
Overall, tax collections under the plan would rise from about 16 percent of the economy this year to 19 percent in 2013, while federal spending would drop from about 26 percent of the economy, another post-World War II high, to 22 percent.
Republicans, who are already painting Obama as a profligate spender, are laying plans to attack him on taxes as well. Even some nonpartisan observers question the wisdom of announcing a plan to raise taxes in the midst of a recession. But senior White House adviser David Axelrod said in an interview that the proposals reflect the ideas that won the election.
"This is consistent with what the president talked about throughout the campaign," and "restores some balance to the tax code in a way that protects the middle class," Axelrod said. "Most Americans will come out very well here."
The budget also puts in place the building blocks of what administration officials say will be a broad restructuring of the U.S. health system, an effort aimed at covering some of the estimated 46 million Americans who lack insurance while controlling costs and improving quality.
"The budget will kick off or facilitate a focus on getting health care done this year," the senior official said, adding that the White House is planning a health care summit. The event has been delayed by former senator Thomas A. Daschle's decision to withdraw from consideration as health secretary because of tax problems, a move that left Obama without a key member of his health team.
Administration officials and outside experts say the most likely path to revamping the health system is to begin with Medicare, the federal program for retirees and people with disabilities, and Medicaid, which serves the poor. Together, the two programs cover about 100 million people at a cost of $561 billion in 2007. Making policy changes in those programs -- such as rewarding physicians who computerize their medical records or paying doctors for results rather than procedures -- could improve care while generating long-term savings, experts say.
Obama's budget request would create "running room for health reform," the official said, by reducing spending on some health programs so the administration would have money to devote to initiatives to expand coverage. The biggest target is bonus payments to insurance companies that run managed-care programs under Medicare, known as Medicare Advantage.
The Bush-era program has attracted nearly a quarter of Medicare beneficiaries to private health insurance plans that cover a package of services such as doctor visits, prescription drugs and eyeglasses. But the government pays the plans 13 to 17 percent more than it pays for traditional fee-for-service coverage, according to the Medicare Payment Advisory Commission, which advises Congress on Medicare financing issues.
Officials also are debating whether to permit people as young as 55 to purchase coverage through Medicare. That age group is particularly vulnerable in today's weakened economy, as many have lost jobs or seen insurance premiums rise rapidly. The cost would depend on whether recipients received a discount or were required to pay the full price.
In addition to the substantive proposals, Obama's team boasts of improving the budget process itself. For years, budget analysts complained that former president George W. Bush tried to make his deficits look smaller by excluding cost estimates for the war in Iraq and domestic disasters, minimizing the cost of payments to Medicare doctors and assuming that millions more families would pay the costly alternative minimum tax. Obama has banned those techniques, the senior official said.
So I thought I'd make a thread to discuss the introduction of the budget plan and hopefully we can discuss all the progressive taxation stuff here instead of in the now fundamentally defunct Stimulus thread. Enjoy!
The idea that your vote is a moral statement about you or who you vote for is some backwards ass libertarian nonsense. Your vote is about society. Vote to protect the vulnerable.
enlightenedbum on
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Weren't you the one who predicted back in 2006 that raising the minimum wage would tank the economy and cause unimaginable inflation?
well the economy has tanked....
next up, inflation!
I don't get the point you're making here. Are you saying that it's a good thing that corporations aren't pay taxes they're supposed to be paying already? You're seriously in favor of corporate tax evasion?
And I'd love to hear you make a case for how a rich person's income tax going up 4 percent in the highest bracket will lead to higher prices on goods.
they're "suggestions"
I think he's specifically talking about the tax rate on the wealthy, not sewing shut corporate evasion holes.
This implies that corporations are intentionally not maximizing their profits now, as having to pay their taxes would not alter the market structure. This doesn't pass the milk-out-of-the-nose test. As such, I think its pretty clear that you're coming from an ill-informed "Taxes are bad!" school of non-thought and we can all move on to actual rational debate.
QEDMF xbl: PantsB G+
― Dr. Seuss, Oh, the Places You'll Go!
And no, I'm not happy that corporations can avoid their taxes and/or pass them on to the consumer. But you're all fools if you think that closing the loopholes isn't going to affect the current price of everything any company currently exploiting those loopholes produces. This also has the effect of being a tax on the consumer, not just because the goods are now priced higher but because the sales tax, while the same percentage, will bring in more money for the state.
You don't know how pricing works. Corporations set the prices the market will bear according to supply and demand.
basic economics here.
price is originally Pe and quantity Qe. increasing taxes makes the price go to Pc and quantity Qt.
heres your wikipedia example
Now, if the across the board price starts to curtail demand, as gas prices did last year, then you'll see adjustments down.
No one said that they wouldn't pass the taxes on to the consumer. It's only really a problem to us if demand is inelastic across the board, which it demonstrably is not. We managed to bear the brunt of speculation in oil and the price increases that led to in other sectors. We did this, in part, by consuming less oil and adjusting our spending practices when prices went up on other goods. As a result, downward pressure was placed on the price of oil (thanks also to OPEC's over-correction in their supply line) and prices went down. I think we'll be okay if corporations decided to jack up prices on optional goods. Besides, considering we're in a down economic cycle in which demand is already placing downward pressure on prices, I don't think it'd make good business sense to up prices too much even if the corporations are finally going to have to pay their taxes.
QEDMF xbl: PantsB G+
This would be the part where you show us that this has ever been the case.
Except that new corporations will fill the niche and rise up to fuck you with lube so as to feel better in the process. Ignoring the simple fact that the government is collecting those revenues for a purpose rather than just to burn in a gleeful bonfire of the vanities. A purpose that may well prove beneficial to your swollen asshole.
Anyways someone link me somewhere that will educate me about what is being discussed.
They're already doing that. That's what they do.
QEDMF xbl: PantsB G+
More like guidelines really.
Also the budget proposal that's being unveiled is for FY-2010. The 2009 budget was what Bush rolled out last year. The first $1trillion budget and the first electronic budget, rather than paper, to save on printing costs.
Almost makes you want to laugh.
i thought you were talking about corporation tax which is fundamentally the same.
also, you were reading the graph wrong or didn't understand the example. $1.20 is a higher price than $1. the 70 cents would be where the dashed blue line meets the supply line at the bottom of the tax profit cube. the good was never sold for 70 cents.
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No it is not the same. A corporate tax is an income tax. If I'm taxed 10% of my income (profit), that doesn't have anything to do with the mechanisms I use to generate that profit.
And 1.20 is not the price set by the business, that is the cost to the consumer. If you actually read the example (or understood economics), the supply side "price" is $.70 (down from 1.00) with the supplier absorbing part of the sales tax.
QEDMF xbl: PantsB G+
It's been mentioned already, but I think this reasoning is more directed at an excise tax rather than income (or profit) taxes. The burden of excise taxes is shared between the buyer and seller dependent upon the relative elasticities (slopes of the curves) of supply and demand rather than who is nominally charged the tax. So across the board sales taxes should vary on who takes more of a hit across different goods and services being traded.
However, just the basic supply and demand curves don't get into the subject of profit by themselves, which depends upon other things including competition, so it seems like this line of reasoning is far too basic for discussing the effect of increasing corporate income taxes.
Still, he has the advantage that he is starting from a ridiculously huge deficit, so he can reduce the gap from ridiculous to merely very alarming and, rightfully, claim to have successfully cut it in half.
Double click it on the main page, then hit stop so as to not continue into the thread. It's how I do it since editing the post no longer seems to work.
oh ok.... so your definition of price is not cost to the consumer but the useless whole sale price....
i hear nike shoes cost 3 dollars too. what a bunch of bull.
Sorry, I'm feeling particularly 80s today.
Anyway, I'm... somewhat displeased. The sales pitch sounds good - unprecedented spending now, but we will address this in the coming years with spending cuts and tax hikes.
Okay, fine, this is consistent with Obama's campaign platform, and after a trillion dollar deficit for the next couple years, we better fucking cut some of that spending, because the stimulus spending is supposed to be a short-term thing and not the new status quo.
Except as best I can tell, the "spending cuts" are just from pulling out of Iraq, and almost all of the reduction in deficit will come from increasing tax revenue. I don't have a problem with the taxes at all, but am I to understand that the extra trillion we just added to our annual budget is going to be a permanent thing? I didn't hop on the Obama train in order to see hundreds of billions of dollars in increased spending right out of the gate.
So is it just that the short-term spending bill we just passed is going to be gradually paid for over the next four years or so, and we should see additional cuts in spending as that fades away after Obama's first term? Or is this some sort of sneaky spending hocus-pocus where the stimulus bill is serving as a Trojan Horse for massive permanent spending hikes?
Somebody please talk me off my ledge.
1) Inherit massive trillion dollar deficit
2) Add something like 300 billion this year and 500 billion next year in the form of stimulus package
3) Take away about 150 billion with Iraq withdrawal, some of which is negated by build up in Afghanistan
4) Bush tax cuts expire, which builds rather a lot of additional revenue.
5) And this is the spending increase: sometime this year pass health reform which will require a large initial investment, but the idea of which is to 1) provide access to health care to everyone 2) lower the long term cost increases that would cripple the budget in 40 years so both a public good and long term a lowering of costs.
That's how I understand things and why the deficit remains projected at a half trillion dollars in 2013. Also note that my understanding is that this projection is very conservative in terms of any recovery that might happen. Numbers could improve if the economy does better.
Which parts specifically are you concerned about?
However, I don't think Obama ever promised a cut to the fundamental size of government. More efficient, yes. More transparent, yes. Focused in different areas, yes. But smaller?
I simplify it for you.
You're wrong because you don't understand the difference between an income tax and a sales tax.
You're doubly wrong because even if it was a sales tax, the corporation would not increase prices to maintain profits, but decrease pre-tax (which is not "wholesale") prices to maintain the same supply/demand equilibrium. (Dropping it now)
QEDMF xbl: PantsB G+
I don't think that they're being intentionally sneaky about anything, but you're right that health care reform will look cheap by comparison with the stimulus, which might ease its passage a tiny bit (the obvious catch being that health care will be permanent).