Magox Posted June 16, 2009 Posted June 16, 2009 Obama Says ‘Robust’ Economic Growth Will Prevent Tax Increases http://www.bloomberg.com/apps/news?pid=206...id=akaJVOByDsHg here's a snippet: “One of the biggest variables in this whole thing is economic growth,” the president said in an interview with Bloomberg News at the White House. “If we are growing at a robust rate, then we can pay for the government that we need without having to raise taxes.” He has also promised to cut the budget deficit, forecast to hit $1.8 trillion this year, in half by the end of his first term. The budget he submitted to Congress in February anticipates that the government will still run what would be, by historical standards, large deficits for the foreseeable future. The nonpartisan Congressional Budget Office projects the shortfall will total at least $600 billion for each of the next 10 years. Fiscal discipline that leads to lower budget deficits is important, Obama said, to ensure investors around the world keep buying U.S. government debt.
DC Tom Posted June 16, 2009 Posted June 16, 2009 Obama Says ‘Robust’ Economic Growth Will Prevent Tax Increases http://www.bloomberg.com/apps/news?pid=206...id=akaJVOByDsHg here's a snippet: “One of the biggest variables in this whole thing is economic growth,” the president said in an interview with Bloomberg News at the White House. “If we are growing at a robust rate, then we can pay for the government that we need without having to raise taxes.” He has also promised to cut the budget deficit, forecast to hit $1.8 trillion this year, in half by the end of his first term. The budget he submitted to Congress in February anticipates that the government will still run what would be, by historical standards, large deficits for the foreseeable future. The nonpartisan Congressional Budget Office projects the shortfall will total at least $600 billion for each of the next 10 years. Fiscal discipline that leads to lower budget deficits is important, Obama said, to ensure investors around the world keep buying U.S. government debt. I remember when Bush said almost exactly that.
Magox Posted June 16, 2009 Author Posted June 16, 2009 I remember when Bush said almost exactly that. It must be in chapter 1 of the presidential handbook.
Magox Posted June 16, 2009 Author Posted June 16, 2009 “If we are growing at a robust rate, then we can pay for the government that we need without having to raise taxes,” Another words, get ready for me to go back on my words from the campaign trail.
Chef Jim Posted June 16, 2009 Posted June 16, 2009 “If we are growing at a robust rate, then we can pay for the government that we need without having to raise taxes,” Another words, get ready for me to go back on my words from the campaign trail. No, in other words get ready for a 25% cap gains rate.
Magox Posted June 16, 2009 Author Posted June 16, 2009 No, in other words get ready for a 25% cap gains rate. That is definitely in the works, but that won't nearly be enough. How many profits do you see in the near future?
TPS Posted June 17, 2009 Posted June 17, 2009 No, in other words get ready for a 25% cap gains rate. You need an "asset bubble" for that to have any significant impact on revenues, and I think we're out of those for awhile... My guess is we'll see one or both of these: increased taxes on the upper bracket (or let the Bush cut for the top expire); some type of national sales or value-added tax.
Chef Jim Posted June 17, 2009 Posted June 17, 2009 You need an "asset bubble" for that to have any significant impact on revenues, and I think we're out of those for awhile... My guess is we'll see one or both of these: increased taxes on the upper bracket (or let the Bush cut for the top expire); some type of national sales or value-added tax. A nearly 40% run up in the market since March maybe? But that will probably result in short term gains as people lock in those gains. You don't need a bubble for taxes on gains to take effect.
Magox Posted June 17, 2009 Author Posted June 17, 2009 A nearly 40% run up in the market since March maybe? But that will probably result in short term gains as people lock in those gains. You don't need a bubble for taxes on gains to take effect. ya, but most people aren't trading in and out, as the majority of people's funds are in retirement programs, where the trading activity is not as much as a lot of people would think. Remember, even after the 40% run up from the bottom, many stocks are still at a loss for the year. You are right that you don't need a bubble to have gains, but you would need a tremendous bubble in gains to make any sort of a significant impact on the deficit. Capital gains will only be a small portion of the solution.
TPS Posted June 17, 2009 Posted June 17, 2009 A nearly 40% run up in the market since March maybe? But that will probably result in short term gains as people lock in those gains. You don't need a bubble for taxes on gains to take effect. My point is that you need an increase in the revenues collected significantly higher than the "average" annual collected. The issue raised was how to bring down the deficit? Raising the cap gains rate won't raise significantly more revenue if you don't also have significant gains. Btw, won't the gains since March be offset by the losses over the previous 3 months?
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