Boehner says 'no' to ambitious debt reduction deal

At the end of last week, though, Boehner’s representatives came back with a tax reform proposal that would simplify the system with three rates based on income, and all three lower than current levels, the administration official said. Democratic negotiators agreed to the idea, but insisted on families earning more than $250,000 a year taking on a greater overall tax burden, according to the official.

So, Obama said ‘no’ to a fairer tax proposal. Since those over 250k already pay a larger percentage of the taxes than during the Clinton administration, it is obviously all about soaking the rich.

We have a spending problem, not a tax problem.

But what about World War II, anyway? Coming in at 25.3 percent of GDP, federal spending is higher today than it has been in any year since 1945. What did we do at the end of World War II? We cut spending — radically. In 1944, federal spending was 43.6 percent of GDP. By 1948 it was down to 11.6 percent of GDP. It edged up after that, but from 1948–60, federal spending averaged less than 17 percent of GDP. (Those were not the worst years in the history of the republic.)

What that means is that if federal spending as a share of GDP were reduced to that postwar average from 2012–16, we could balance the budget, start paying down the national debt, and cut taxes by $1 trillion over those five years. Grover Norquist could get his tax cuts, I could get my balanced budget, and Barack Obama still would preside over a government considerably bigger than FDR’s New Deal regime. Not my ideal outcome, but a decent compromise.

Inescapable conclusion: Spending is what is out of whack.

No it is about the fairness of having those who can afford to pay even more, to do so. And not balancing the budget on the backs of the poor and middle class.

Pretty much everyone can “afford” to pay more than they do already. Taxation should not be to tax certain groups to the limit of their endurance. That’s not fairmess, just wealth redistribution.

As Mrs. Weasley would say, “…you seem to have missed a few crucial lessons”.

  1. Every working family in the United States pays a payroll tax to the Federal Government for Social Security (4.2%) and Medicare (1.42%). The wealthy, however, don’t pay Social Security on any income over $106,800. So in comparison to working class families who pay Social Security on their entire income, wealthy Americans pay Social Security on a progressively smaller proportion of their total income.

  2. From 1944 to 1948, the federal tax rate on people making over $200,000 was over 90%.

Here’s an interesting summary of the post WWII United States Economy (it doesn’t sound anything like what we have today):

Many Americans feared that the end of World War II and the subsequent drop in military spending might bring back the hard times of the Great Depression. But instead, pent-up consumer demand fueled exceptionally strong economic growth in the post war period. The automobile industry successfully converted back to producing cars, and new industries such as aviation and electronics grew by leaps and bounds. A housing boom, stimulated in part by easily affordable mortgages for returning members of the military, added to the expansion. The nation’s gross national product rose from about $200,000 million in 1940 to $300,000 million in 1950 and to more than $500,000 million in 1960. At the same time, the jump in postwar births, known as the “baby boom,” increased the number of consumers. More and more Americans joined the middle class.

  1. By your logic, if a recession causes GDP to decrease, then the federal response should be a corresponding decrease in federal spending in order to maintain a particular proportion, because if Federal spending simply stayed the same, it would naturally account for a larger proportion of the smaller GDP.

However, if you remove Federal money from the economy, that will simply cause GDP to contract further. The latest rise in unemployment is largely due to state and local governments having to lay off teachers, police officers, etc., because the Federal Stimulus money they used to close their budget gaps last year has run out. If people don’t have jobs, they don’t spend money. If there is no demand for goods & services, there is no reason to hire more workers to step up production. So, small businesses don’t expand and hire. Jobs are not created.

Lets not forget that the unregulated “too big to fail” banking industry caused this recession. It had nothing to do with Government spending. That’s just a red herring for Republicans who want to make people forget that it was George Bush and the GOP who got us into this mess in the first place.


Do you really consider a family income of over $106,800 to be "wealthy’?

You missed a rather important point in your calculation. The ceiling on SSI only applies to a single wage earner. A couple with two $80,000 wage earners or even two $100,000 wage earners pays SSI on their total income, as well.

  1. Federal Income Tax as a percentage of the GDP has ZERO (0) to do with Social Security.

  2. The 17% average he was comparing it to was post 1948, so your point is moot.

  3. Our federal bureaucracy is bloated. Your argument is that our downturn is because of federal job losses, so recovery requires us to pour more money into our federal system? That is silly.

Oh…and btw…it wasn’t my logic. It is the author’s logic. Feel free to comment on the attached article. He participates in the comments, so I’m sure he will answer you.

And, how much is enough?

Besides that, your idea of fairness doesn’t compute for me. Should retailers price their goods that way? Gallon of milk for someone making minimum wage = free. Gallon of milk for someone making $250k = $1,000? Is that what you mean? If not, how are government services different?

I’m okay with a progressive tax system, but with liberals it seems that it won’t be “progressive” enough until the top 1% pay all of the taxes. :shrug:

As I already stated, the top 1% pay a greater percentage now than they did before the Bush tax cuts. If liberals were logical, which they are not, they would be happy with that outcome.

Matt, with all due respect, the poor pay no income taxes and that encompasses about 50% of our citizens. And if taxes are raised on the “rich”, that will bring in many in the middle class. I am really tired of hearing about fairness. Just how much more should those who have worked and been successful pay than they already are. It is not government’s job to redistribute the fruits of the labor of others.

Who pays more in taxes, the poor widow or the rich Pharisee?

I believe it was your comment that Obama’s proposal is obviously “all about soaking the rich”. If that were true, then the rich should also be soaked by SS taxes, but they hardly get damp. The SS tax rate for someone making over $250,000 is less than half of what it is for someone making $100,000, and beyond that it just goes down, down, down. The Government has been “borrowing” money from the SS trust fund for years. Money predominately paid into it by lower wage earners. Now the GOP wants to cut SS and give more tax breaks to the rich in order to lower the national debt. Stealing from the poor to give to the rich - that is class warfare in my mind.

Really? When what is this supposed to mean?

What did we do at the end of World War II? We cut spending — radically. In 1944, federal spending was 43.6 percent of GDP. By 1948 it was down to 11.6 percent of GDP.

Was spending cut or did GDP rise? GDP rose dramatically, and did so during the very years when income over $200,000 was taxed at 90%. Today the highest tax rate is at 35%. History proves that the rich can afford to pay more without undermining the economy.

What is silly is to misquote someone and then argue against something they never said. Go back and reread my post. I said state and local governments cut jobs not the federal government.

Here are the numbers from last quarter broken down by type of employment:

Private hiring, which excludes government agencies, rose 57,000 last month after a 73,000 gain.

Factory payrolls climbed 6,000 in June after a 2,000 decline in the previous month.

Employment at service providers increased 14,000 in June, the least since a decline in September.

Construction employment fell by 9,000 workers, while retailers added 5,200 workers.

Government payrolls declined by 39,000 in June, the eighth straight decrease. Employment at state and local governments fell 25,000.

Oh…and btw…it wasn’t my logic. It is the author’s logic. Feel free to comment on the attached article. He participates in the comments, so I’m sure he will answer you.

Well, then I feel free to say that the “author” seems to be playing some dishonest number games. What could possibly be his motivation to mislead readers? I bet he’s a Republican. :rolleyes:

What’s your deal with SS tax? Are you advocating rich people pay for your retirement? SS never was intended to be a tax in the first place. This cradle to grave, poor me, pay my way mentality is ridiculous.

Does the federal government “borrow” from Social Security?

What do they do with the money?

Give tax breaks to the wealthy.

So you are saying that those who earn more, it isn’t REALLY their money, it belongs to the Federal Government and they should be thankful for what they are allowed to keep? Even the Church recognizes the natural right of private property.

If I were among the top percentage of the rich, after reading the words of Jesus in Matt 19:23, 24, I’d be jumping up & down to pay more taxes. :smiley:

So…that passage is about taxation? Interesting misinterpretation.

Ostensibly, Social Security is supposed to be a tax to pay for Social Security. If liberals really cared about the poor (they don’t), they would be in favor of a retirement program that actually gave a better return than Social Security. As far as the SS taxable limit. I don’t know if the payout is also adjusted accordingly. It should be, but I’m not aware. Either way, we still have a spending problem, not a tax problem.

It means you obviously didn’t read the next sentence and make the connection from that sentence to the following paragraph.

You are using interesting math. GDP did rise dramatically since that time period, so there is no reason for us to be spending more than 17% of our current GDP. We spend over 20% because spending rose even more dramatically.

BTW…the poor paid taxes in the 20-40% range during that time period, so I’m guessing you are good with that, too?

State jobs are funded by state taxes. Your conclusion is still illogical. The economy has a lot more to do with private enterprise than government jobs…regardless of the level of the jobs. The fact some states have also grown their bureaucracy to unsustainable levels also doesn’t impress me. California is an extremely wealthy state with very high taxes and they are suffering…it’s called poor management.

Well, at least his math and logic make sense. Yours don’t. I bet you are a liberal. :rolleyes:

Yep, which is why it’s a joke and should be done away with. A centralized government has proven itself ineffective and unable to perform the duties it has assigned itself beyond the power of the document which is supposed to prevent it from creating those duties in the first place.

What do they do with the money?

Blow it or lose it, or give it to some other country.

Give tax breaks to the wealthy.

As they should. It’s not your money for your retirement. Save your own damn pennies.

I’d say your a pretty shallow rich person if you think paying more taxes fulfills your duties to be a charitable Christian.

Envy and coveting your neighbors goods are both deadly sins.

Then I would suggest you get out there and work harder instead of coveting your neighbors wealth.

It’s always easy to say what you would do. Try doing it.

Jesus said give away everything and follow Him. Have you? Are you homeless? Jesus was.

President Barack Obama could have done two things that might have saved his Mother of All Budget Deals.

First, he could have embraced market-centered, consumer -focused reforms to Medicare. That was about as likely as him accepting an Obamacare rollback. *Second, he could have agreed — as House Speaker John Boehner and Republicans suggested — *to sharply reduce tax rates in return for fewer special tax deductions/breaks/loopholes/subsidies. Recall that is what his own debt commission recommended.

Instead, he apparently offered to keep top individual rates where they are, at 35 percent, in exchange for tax reform.*Now that’s a big tax hike. But it’s also revealing. As a GOP source on the Hill put it:

Their fierce insistence on higher taxes is beyond bizarre. *… *The bipartisan consensus on tax reform (broader base & lower rates) was championed by President’s fiscal commission, and yet now is being rebuked by the President. Lowering top rates that would help make America more competitive was too large a leap for a true class warrior.

Obama agrees with the left-of-center consensus that America is dramatically undertaxed. Those tax rates from his fiscal commission would have resulted in revenue higher than the historical 18-19 percent of GDP. But 21 percent of GDP — the highest in U.S. history — isn’t nearly enough for the Obamacrats. Even if Obamacare is successful in bringing down health costs, top liberal policy wonks think far more revenue will be needed to deal with an aging America. First, this budget from the Economic Policy Institute. It sees revenue at 24.1 percent of GDP, which still leaves a huge budget gap.

Then there is this plan from the George Soros-backed Center for American Progress, which operates as the White House’s outside think tank. It sees revenue at 23.8 percent of GDP, even adding a carbon tax and transaction tax into the mix.

In short, Obama sees a need for a permanently bigger government and a lot more tax revenue to fund it. *Had Obama agreed with his own debt commission and Republicans, a big agreement was possible. Or he could have proposed real reforms to entitlements. But he declined and there wasn’t a mega-deal. Don’t blame Boehner for that.

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