How are we going to pay for all this shit?

[txdot-guy]

Originally Posted by Tiny

I agree with your solution, except the part about "a rise of a few percent in the tax rate." It's not that simple, if you want to improve the system. Yeah, the tax rate should go up on, say, carried interest. Should you jack it up on the self employed California businessman who's already paying 54%? I don't think so. IMO loopholes should be removed, the tax system should be simplified, and tax rates flattened from their current steeply progressive levels. Also, growth would help, obviously. If we kept the deficit at $1.9 trillion a year and doubled GDP things don't look so bad. But fat chance the politicians will make that happen. Based on historical GDP growth and inflation, nominal GDP may double in 10 to 15 years, which would cut the deficit as a % of GDP from 6.5% to 3.3% if the deficit remained constant.

The numbers are

USA -27.6 trillion (about 87% of GDP)
Singapore +900 billion
Switzerland +$1.3 trillion
Ireland -$387 billion (67% of GDP)
Hong Kong +$2.3 trillion

Gemini says about 50% of assets and liabilities used to calculate NIIP is accounted for by borrowings/debt.

If you look strictly at net government debt held by the public, the figure for the USA is over 100%, while for the other countries it's under 35%.

NIIP numbers can be found here as well. https://en.wikipedia.org/wiki/Net_in...tment_position

Information that was previously unknown to me. But I think it just provides more context to support my opinion that we need to raise revenues to get out from under our deficit problems.

A 3% income tax increase across the board without other changes would only raise about 186 billion in revenue. With a deficit of 1.8 trillion we’ll have to raise revenues elsewhere including increasing the capital gains rate as well as significantly cutting spending.

In 2025 we raised $264 billion in tariff revenue which is highly regressive. As someone who is squarely in the middle class I would much prefer to see a rise in income tax revenues and capital gains than tariff revenues.

[Texas Contrarian]

Originally Posted by txdot-guy

NIIP numbers can be found here as well. https://en.wikipedia.org/wiki/Net_in...tment_position

Information that was previously unknown to me. But I think it just provides more context to support my opinion that we need to raise revenues to get out from under our deficit problems.

A 3% income tax increase across the board without other changes would only raise about 186 billion in revenue. With a deficit of 1.8 trillion we’ll have to raise revenues elsewhere including increasing the capital gains rate as well as significantly cutting spending.

In 2025 we raised $264 billion in tariff revenue which is highly regressive. As someone who is squarely in the middle class I would much prefer to see a rise in income tax revenues and capital gains than tariff revenues.

I don't think most people realize the enormity of the problem.

As you noted, raising all the income tax brackets relatively modestly wouldn't make much of a dent in the deficit.

But raising the capital gains tax rate would make even less of a dent in the deficit. The rate now is 23.8%; increasing it to 28% (which is about what most knowledgeable students believe is the revenue-maximizing rate) wouldn't be likely to raise more than about a penny of every deficit dollar. And raising it to levels much higher than that would actually lower revenue. (See: Policy discussions leading up the the capital gains tax cut of 1978.)

And let's get real here. No one is going to cut spending to any appreciable extent.

Anyone remember all the caterwauling in 2011 when the new Republican House majority wanted to cut domestic discretionary spending by a couple of percentage points? Exploding media heads convinced much of the nation that stuff would start collapsing all across the land if any spending was reduced.

And do you remember what happened in 1989, when Rostenkowski got attacked by a bunch of old people at a town hall-style event when he proposed some very small adjustments to Medicare? They literally chased him into his car!

So, I'm pretty sure we're just going to run humongous deficits until some crisis forces a course correction, which it eventually will.

Unfortunately, we're a nation that's adrift with no serious leadership; acting like an alcoholic who has to "hit bottom," as they say, before seeking treatment.

[pxmcc]

^^TC, if you were the deficit/debt all-powerful tsar, how would you close the deficit gap-that's a pre-requisite-and then go on to pay off the debt?

it bears mentioning that what we cannot fix, the markets will fix for us, starting with the 10 year treasuries yield going through the roof. and whose fantasy is it that the fed will never default? why is that bedtime story somehow etched in indelible granite? i don't buy it for a second. all you need is a couple of Trumpkins at the controls, and that's that..

[txdot-guy]

Originally Posted by Texas Contrarian

I don't think most people realize the enormity of the problem.

As you noted, raising all the income tax brackets relatively modestly wouldn't make much of a dent in the deficit.

But raising the capital gains tax rate would make even less of a dent in the deficit. The rate now is 23.8%; increasing it to 28% (which is about what most knowledgeable students believe is the revenue-maximizing rate) wouldn't be likely to raise more than about a penny of every deficit dollar. And raising it to levels much higher than that would actually lower revenue. (See: Policy discussions leading up the the capital gains tax cut of 1978.)

And let's get real here. No one is going to cut spending to any appreciable extent.

So, I'm pretty sure we're just going to run humongous deficits until some crisis forces a course correction, which it eventually will.

Unfortunately, we're a nation that's adrift with no serious leadership; acting like an alcoholic who has to "hit bottom," as they say, before seeking treatment.

We’re almost to the point where we’re going to have to take some calamitous actions to rectify our problems. A good first start is solving our Social Security funding so that it will continue to last for the foreseeable future.

Secondly a serious debate on raising taxes up to same levels as before the first bush tax cuts.

Thirdly a straight up 5% to 10% spending cut across the board for every single government program except SS.

We’re going to have to get serious people to work out these issues and come up with a solution that the majority of congress can live with.

[Turner2099]

Originally Posted by txdot-guy

We’re almost to the point where we’re going to have to take some calamitous actions to rectify our problems. A good first start is solving our Social Security funding so that it will continue to last for the foreseeable future.

Medicare is right there with Social Security and is pretty much just as necessary, if not more, for the same group of people.

Healthcare is getting more expensive---getting healthcare under control would benefit more than just Medicare.

[txdot-guy]

The Wall Street Journal recently published an editorial arguing for a tax increase on billionaires. Are things going so poorly that even the Journal recognizes the danger of an oligarchy in America?

Here is a few paragraphs excerpted from the article. Click the link to read the full article.

https://archive.ph/1MkAW
Billionaires’ Low Taxes Are Becoming a Problem for the Economy
Tax avoidance by the superwealthy is an economic issue as well as a political one

Data from the Federal Reserve shows that only the richest 1% of households have grown their share of overall U.S. wealth since 1990. Their share hit a record 32% in the third quarter of 2025, equivalent to $54.8 trillion.

Gains made by the billionaire class, the very top 0.1% of households and a subset of the 1%, have eclipsed the merely extremely rich. This group’s share of U.S. net wealth has risen nearly 6 percentage points to 14.4% since 1990.

Meanwhile, the bottom half of American households have lost ground. Their 2.5% cut of the country’s wealth has slipped from 3.5% in 1990. Also striking: The share owned by the decile of wealthy households that rank just below the top 1% has shrunk slightly.

Billionaires have ways to lower their tax bills that aren’t available to most Americans. A common strategy is to avoid salaries, which are heavily taxed. Ray Madoff, a law professor at Boston College and author of The Second Estate: How the Tax Code Made an American Aristocracy, points to Mark Zuckerberg’s dollar-a-year wage at Meta. Warren Buffett took an annual salary of $100,000 for decades.

Billionaires prefer to be paid in shares, which are subject to capital-gains taxes when sold. But they don’t need to sell to fund their lifestyles. Billionaires use borrowed money for living expenses, pledging their shares or other assets as collateral. The interest on the debt is much lower than a capital-gains tax bill would be, and their stock portfolios can continue accumulating paper gains.

A third of America’s billionaires have inherited their wealth. The ultrarich can use structures such as dynasty trusts to shield their assets from estate taxes for generations, while the step-up provision adjusts the cost basis of an inherited asset to its fair market value.

Amassing assets like stocks, borrowing against them rather than selling during the owner’s lifetime, and passing them to the next generation after death is sometimes called the “buy borrow die” tax-avoidance strategy.

Billionaires put less into the tax pot as a percentage of their wealth than wage earners. One working paper by the National Bureau of Economic Research found that the effective tax rate for the U.S.’s 400 wealthiest individuals is 24%—compared with 45% for top labor income earners.

But the very fact of the rising concentration of wealth in the hands of the superwealthy means the issue of how to tax it won’t be going away, and pressure could build for ever-more populist measures, including at the national level. In the meantime, expect businesses that cater to billionaires to outperform those aiming at everyone else.

[The_Waco_Kid]

Originally Posted by txdot-guy

The Wall Street Journal recently published an editorial arguing for a tax increase on billionaires. Are things going so poorly that even the Journal recognizes the danger of an oligarchy in America?

Here is a few paragraphs excerpted from the article. Click the link to read the full article.

https://archive.ph/1MkAW
Billionaires’ Low Taxes Are Becoming a Problem for the Economy
Tax avoidance by the superwealthy is an economic issue as well as a political one

Data from the Federal Reserve shows that only the richest 1% of households have grown their share of overall U.S. wealth since 1990. Their share hit a record 32% in the third quarter of 2025, equivalent to $54.8 trillion.

Gains made by the billionaire class, the very top 0.1% of households and a subset of the 1%, have eclipsed the merely extremely rich. This group’s share of U.S. net wealth has risen nearly 6 percentage points to 14.4% since 1990.

Meanwhile, the bottom half of American households have lost ground. Their 2.5% cut of the country’s wealth has slipped from 3.5% in 1990. Also striking: The share owned by the decile of wealthy households that rank just below the top 1% has shrunk slightly.

Billionaires have ways to lower their tax bills that aren’t available to most Americans. A common strategy is to avoid salaries, which are heavily taxed. Ray Madoff, a law professor at Boston College and author of The Second Estate: How the Tax Code Made an American Aristocracy, points to Mark Zuckerberg’s dollar-a-year wage at Meta. Warren Buffett took an annual salary of $100,000 for decades.

Billionaires prefer to be paid in shares, which are subject to capital-gains taxes when sold. But they don’t need to sell to fund their lifestyles. Billionaires use borrowed money for living expenses, pledging their shares or other assets as collateral. The interest on the debt is much lower than a capital-gains tax bill would be, and their stock portfolios can continue accumulating paper gains.

A third of America’s billionaires have inherited their wealth. The ultrarich can use structures such as dynasty trusts to shield their assets from estate taxes for generations, while the step-up provision adjusts the cost basis of an inherited asset to its fair market value.

Amassing assets like stocks, borrowing against them rather than selling during the owner’s lifetime, and passing them to the next generation after death is sometimes called the “buy borrow die” tax-avoidance strategy.

Billionaires put less into the tax pot as a percentage of their wealth than wage earners. One working paper by the National Bureau of Economic Research found that the effective tax rate for the U.S.’s 400 wealthiest individuals is 24%—compared with 45% for top labor income earners.

But the very fact of the rising concentration of wealth in the hands of the superwealthy means the issue of how to tax it won’t be going away, and pressure could build for ever-more populist measures, including at the national level. In the meantime, expect businesses that cater to billionaires to outperform those aiming at everyone else.

the wealthy are carrying our debt on their backs and have been for decades. and you want more from them? why not just take 38 trillion from them and pay off the debt? most would still be rich but would that be fair? and what would that solve? Congress is the problem. they spend money they don't have like drunk sailors on leave.



if you took 38 trillion from the ultra wealthy in 5 years we'd be trillions in debt again because Congress won't stop spending more than we gain in taxes.



so take that 38 trillion. then what happens when the ultra rich aren't rich? who's gonna pay now?



taxing the rich more isn't the solution. forcing Congress to stop overspending is.



According to the latest available
IRS data for the 2022 tax year, the top 1% of earners—those with an adjusted gross income (AGI) of $663,164 or higher—paid 40.4% of all federal individual income taxes. In the same year, the top 50% of all taxpayers combined were responsible for 97% of all federal individual income taxes.



The concentration of the tax burden among high-income earners reflects the progressive nature of the U.S. federal income tax system. Additional context on the tax contributions of different income groups includes:

• The Top 10%: This group accounted for 72% of all federal income taxes paid in 2022.
• The Bottom 50%: Taxpayers in the bottom half of the income distribution (those with an AGI below $50,339) contributed 3% of all federal income taxes.
• Average Tax Rates: While the average income tax rate for all taxpayers was 14.5% in 2022, the top 1% faced an average income tax rate of 23.1%, compared to 3.7% for the bottom 50%

[elghund]

Originally Posted by The_Waco_Kid

the wealthy are carrying our debt on their backs and have been for decades. and you want more from them? why not just take 38 trillion from them and pay off the debt? most would still be rich but would that be fair? and what would that solve? Congress is the problem. they spend money they don't have like drunk sailors on leave.



if you took 38 trillion from the ultra wealthy in 5 years we'd be trillions in debt again because Congress won't stop spending more than we gain in taxes.



so take that 38 trillion. then what happens when the ultra rich aren't rich? who's gonna pay now?



taxing the rich more isn't the solution. forcing Congress to stop overspending is.



According to the latest available
IRS data for the 2022 tax year, the top 1% of earners—those with an adjusted gross income (AGI) of $663,164 or higher—paid 40.4% of all federal individual income taxes. In the same year, the top 50% of all taxpayers combined were responsible for 97% of all federal individual income taxes.



The concentration of the tax burden among high-income earners reflects the progressive nature of the U.S. federal income tax system. Additional context on the tax contributions of different income groups includes:

• The Top 10%: This group accounted for 72% of all federal income taxes paid in 2022.
• The Bottom 50%: Taxpayers in the bottom half of the income distribution (those with an AGI below $50,339) contributed 3% of all federal income taxes.
• Average Tax Rates: While the average income tax rate for all taxpayers was 14.5% in 2022, the top 1% faced an average income tax rate of 23.1%, compared to 3.7% for the bottom 50%

Like anyone cares about billionaires having to pay more taxes.

Boo Fucking Hoo.

elg….

[The_Waco_Kid]

Originally Posted by elghund

Like anyone cares about billionaires having to pay more taxes.

Boo Fucking Hoo.

elg….

and when the billionaires run out of money? what then? who are we gonna tax?


fyi the ultra wealthy will pull their money out of the US before they let the wasteful GOV to take it all.


interestingly many billionaires have said they'd pay more in tax IF the GOV didn't continue to spend more than they take in.


Congress is the problem. don't blame the ultra wealthy for it.

[elghund]

Originally Posted by The_Waco_Kid

and when the billionaires run out of money? what then? who are we gonna tax?


fyi the ultra wealthy will pull their money out of the US before they let the wasteful GOV to take it all.


interestingly many billionaires have said they'd pay more in tax IF the GOV didn't continue to spend more than they take in.


Congress is the problem. don't blame the ultra wealthy for it.

History shows there are always ultra rich people. Greed is never out of style……

You actually make me laugh. Like people who make 50K annually really care if billionaires have to pay more taxes!



Again….no one gives a fuck about billionaires.( And I agree Congress is the biggest problem……but two separate issues.)

elg…

[The_Waco_Kid]

Originally Posted by elghund

History shows there are always ultra rich people. Greed is never out of style……

You actually make me laugh. Like people who make 50K annually really care if billionaires have to pay more taxes!



Again….no one gives a fuck about billionaires.( And I agree Congress is the biggest problem……but two separate issues.)

elg…

Congress IS THE ISSUE. remember that when Bernie and AOC yell tax the rich!



like that will fix it!!!



NOT

[txdot-guy]

Originally Posted by The_Waco_Kid

• The Top 10%: This group accounted for 72% of all federal income taxes paid in 2022.
• The Bottom 50%: Taxpayers in the bottom half of the income distribution (those with an AGI below $50,339) contributed 3% of all federal income taxes.
• Average Tax Rates: While the average income tax rate for all taxpayers was 14.5% in 2022, the top 1% faced an average income tax rate of 23.1%, compared to 3.7% for the bottom 50%

Every time I see this particular piece of information used to justify tax cuts or income inequality it just makes me want to scream.

The reason why the bottom fifty percent pay practically no taxes is because they practically don’t own anything and are living paycheck to paycheck.

”A recent snapshot of U.S. wealth from the Federal Reserve depicts a nation where the top 50% of households controls 97.5% of the country's assets.”

I agree that congress should cut spending but the top .00001 percent should be paying more taxes and their generational wealth should be taxed more than it is. A number of loopholes that the ultra wealthy have added to our tax code really does need to be reformed.

Specifics I don’t have but the data doesn’t lie. Rich people are getting richer and poor people are getting poorer.

[Tiny]

The editor in chief of the Economist regularly appears on MSNBC's Morning Joe. The publication made the following endorsements in US general elections.

2008 Barrack Obama
2012 Barrack Obama
2016 Hillary Clinton
2020 Joe Biden
2024 Kamala Harris.

I believe this is from their lead article last week,

...Plans to fill budgetary gaps by raising levies on the rich are flawed. Taxes are one way governments can redistribute income from the rich to the poor. But that is not their only function: they must also raise revenue without distorting the economy. The system today is failing on all counts. Arguments that high earners do not pay their fair share are mostly empty. And squeezing the rich further will raise trifling sums of money, while causing real economic damage.

Consider revenues first. There are simply not enough fat cats to fund welfare states by themselves. The proposed wealth tax in California would raise about 2% of the state’s annual output—not much for a swingeing one-time levy in the place with one of the world’s greatest concentrations of billionaires. The figure for Mr Mamdani’s proposal is around 0.25% of output annually. The limited revenue-raising power of the rich is why European governments have to fund their big spending with broad-based levies, such as taxes on consumption. By contrast, America, with its low overall tax burden, can get by with one of the world’s most progressive tax systems.

...Another problem with increasing taxes on the rich is that it damages the economy. True, it would take a lot to stop bankers and lawyers turning up for work. Yet in New York they already face a combined federal, state and local top tax rate of 52%. And the cumulative impact of such levies on risk-taking, enterprise and innovation—the lifeblood of economic growth—may cause real harm. Recent research finds that facing a one-percentage-point higher income-tax rate reduces the likelihood that someone will file a patent in the following three years by 0.6 percentage points. This loss of entrepreneurial effort hurts society more than it hurts innovators, who by one estimate capture just 2% of the value they generate.

You might think that the one unassailable argument for taxing the rich would be fairness. But even that idea is dubious. The presumption that governments have failed to ensure taxes on the rich keep up with their income is mostly wrong. The rich world does more redistribution than ever. In Britain, France and Japan income inequality has fallen after taxes and spending. Since 1990, America has offset much of the rise in pre-tax inequality with more redistribution. Taxes on the top 1% are higher, and spending on the poor, such as on health care, has grown. Besides, fairness is not just about making incomes equal. A fair system would also respect property rights, be reasonably predictable and allow people to reap the rewards of their efforts and risk-taking.

...Broad-based taxes do not only raise much more money. They are also politically healthier. A society where the many pay tax and benefit from spending is stronger than one where the few have to pay for the many. If progress on artificial intelligence concentrates incomes at the top, as almost everyone in Silicon Valley expects, then the tax system will require fresh thinking. But that world, if it comes at all, is some way off.

Today, polls and experiments show that voters pay woefully little attention to the nasty side-effects taxes have on the economy. Without a personal stake in keeping taxes low, they are less likely to keep hare-brained public schemes in check. Only by exposing voters to both sides of the ledger can you expect them to pay heed to the benefits and costs of government spending, rather than always favouring more handouts.

At a time of rising public spending, it is dangerous to suppose that the rich can always just pay a little bit more. Yet most left-wing governments would gladly embrace their inner Robin Hood and raid away. When pressures on the public purse are great, it is tempting for leaders to reach for ways to raise revenue that, in the short term at least, impose the least political cost. Taxing the rich will wreak economic and political damage in the long term, however—and will fail even to bring in the revenue that governments need. Emulating Robin Hood and his merry men might look tempting. But it is a trap.

https://www.economist.com/leaders/20...broken-budgets

In the same issue, the Economist got into the weeds, here,

https://www.economist.com/internatio...g-for-the-rich

A graph shows the percentage of income held by the top 1%. Before tax, it's risen from around 8% in 1965 to 22% in 2022. But after tax, it's only up from around 8% to 10%. In other words, taxes on the top 1% have gone up so much that income inequality hasn't increased much.

Another interesting item, "We estimate that if America had kept the estate tax as high as it was in 1960 (a rate of 77% on inheritances over $10m), the overall tax burden on the 1% today would be 46.0%, not 45.3%."

As to the idea the billionaire's are making out like bandits by borrowing against their fortunes, "In America “buy, borrow, die” is a minority pursuit, find Edward Fox of the University of Michigan and Zachary Liscow of Yale University in a recent paper. Gerald Auten of the Treasury Department and David Splinter of the Joint Committee on Taxation, a non-partisan arm of Congress, recently published a study in the Journal of Political Economy that analysed the effective tax rates of different parts of the income distribution through a very broad lens that encompasses taxes on wages, profits, capital gains and bequests. In this work and updates to it, they find that the very richest Americans tend to pay the very highest shares of their income to the taxman (see chart 3). Someone in the top 0.01% pays about 50% tax overall, they conclude. In addition, the very richest people face higher effective tax rates today than did their counterparts in the 1960s or 1970s.


On that topic (bold text), there's a chart showing the average tax payments as a % of post-transfer income. For the top .01%, or for that matter the top 0.5%, the tax rate in 2022 was about 50%. In 1979 it was 40%, and in 1962 43%. In other words, when the maximum tax rate was 91% (1962) and 70% (1979), the effective tax rate was lower than it is now. Texas Contrarian has addressed this several times, how changes in the tax code during the Reagan administration actually increased tax collection from the wealthy.

Another quote, "The big question is whether, in the pursuit of equality, governments are raising taxes on the rich so high that they are becoming counter-productive. At some point swingeing levies will start to discourage work and so harm the economy. Some see the exodus of billionaires from California as proof that it has gone too far. Others argue the same of the small number of wealthy foreigners who have left Britain in response to its tax changes."

[CPT Savajo]

Originally Posted by Tiny

OK, The COVID relief bill just passed will cost 1.9 trillion. Biden has just proposed another 2.2 trillion for Democratic priorities and infrastructure, and reportedly will propose another 2 trillion spending bill in April for more Democratic Party priorities. That adds up to about 6 trillion in round numbers.

Alexandria Ocasio Cortez and Joe Manchin believe the $2.2 trillion just announced is too low. AOC wants it upped to $10 trillion and Manchin wants $4 trillion.

And then there's the Green New Deal, beloved by all the progressive Democratic Politicians. The American Action Forum estimates that would take $51 trillion to $93 trillion over the next ten years.

The Fed has a printing press problem solved. America will print (inflate) it's way to momentary prosperity only to realize that it isn't working. Trump has already signaled this 2nd term.

Tiny scrap those Green New Deal figures from 2021 of $51 trillion and $93 trillion and muliply those figures by 3X or 4X with the Chinese Communist Party essentially cutting off strategic physical silver exports to the West that began 1 January 2026. They'll need a shit ton of copper and silver to envision the Green New Deal reality of net zero emissions in 2050 but a massive Chinese wrench has been thrown into the engine of the Green New Deal.

Push the date back for the completion of the Green New Deal it's not going to happen on time. Impossible. China won't let the West have ALL the critical minerals they need to accomplish such task.

[txdot-guy]

Originally Posted by txdot-guy

The Wall Street Journal recently published an editorial arguing for a tax increase on billionaires. Are things going so poorly that even the Journal recognizes the danger of an oligarchy in America?

Here is a few paragraphs excerpted from the article. Click the link to read the full article.

https://archive.ph/1MkAW
Billionaires’ Low Taxes Are Becoming a Problem for the Economy
Tax avoidance by the superwealthy is an economic issue as well as a political one

Billionaires put less into the tax pot as a percentage of their wealth than wage earners. One working paper by the National Bureau of Economic Research found that the effective tax rate for the U.S.’s 400 wealthiest individuals is 24%—compared with 45% for top labor income earners.

But the very fact of the rising concentration of wealth in the hands of the superwealthy means the issue of how to tax it won’t be going away, and pressure could build for ever-more populist measures, including at the national level. In the meantime, expect businesses that cater to billionaires to outperform those aiming at everyone else.

I think that people have missed the point of both my post and the WSJ article.

Data from the fed shows that billionaires pay a far less percentage of their wealth in taxes than the highest paid wage earners. People see that as unfair.

This issue isn’t going away and will need to be dealt with sooner or later.