Republicans Don't Really Care About The Deficit

Discussion in 'Too Hot for Swamp Gas' started by fastsix, Jul 13, 2014.

  1. Bushmaster
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    Bushmaster Well-Known Member

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    Again, you are working from the position that all money belongs to the federal government.

    How does the company owner who spent $100,000 while receiving a tax deduction of $14,286 pay tax on $85,714 pay his tax bill?
  2. philobeddoe
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    philobeddoe Well-Known Member

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    DC can cut waste and fraud in entitlement programs ... oh wait, lefties think that is too difficult, "costly", and only hurts those who would vote for a leftist candidate.

    $US$ are fungible, once they're in the treasury ..... you really can't assert one spend or another or the continuation of a specific tax law is increasing the deficit and national debt. The deficit exists because the federal government overspends it's financial resources ..... and the national debt exists because the federal government sells bonds and note to cover its deficit.

    It's patently leftist to say the federal government telling a taxpayer they are not going to raise their taxes by changing USC Title 26 .... increases the deficit!
    Last edited: Jul 16, 2014
  3. GatorBen
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    GatorBen Well-Known Member

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    Ok, so the way we pay for the deficit that creates is by cutting spending. Something this bill didn't do.

    Ergo, this bill increased the deficit. Glad we're all on the same page now.
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  4. Bushmaster
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    Bushmaster Well-Known Member

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    Not a different argument at all. Deficits happen when people spend more than they bring in. YOU not getting money in year 1 because of a change in a law that YOU passed is not MY fault. YOU spending money YOU don't have is not MY fault.
  5. Bushmaster
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    Bushmaster Well-Known Member

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    But to answer your question, by taxes collected on the profit of the equipment I purchased.

    Forgot about that huh?
  6. Bushmaster
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    Bushmaster Well-Known Member

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    In year 1, that was discussed further up the page. In years 2-8 as shown above, less deduction means more tax paid in.

    At the end, it zeros out resulting in NO additional debt.
  7. philobeddoe
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    philobeddoe Well-Known Member

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    If the nation at issue has a relatively high tax rate on individuals and corporations ..... and it is running a deficit ... then yes, you reduce the deficit by reducing your spend. If you increase effective tax rates ... then you exacerbate the "high tax rate" the nation already suffers.

    But, to this specific issue at hand ... the legislation simply continues the tax law - accounting - that has been in place for a number of years. It is not new "tax cut" for "robber barons". In fact, the bonus depreciation deduction is a tax deduction used by many, many US federal income taxpayers - corporate and individual. So, elimination of the bonus depreciation tax accounting would result in a tax increase on those "people", including C-corp shareholders, who are already paying the vast majority of all federal income taxes collected by the US Treasury. Screw that .... and anyone who wants to increase taxes on those already paying federal income taxes. :)
  8. GatorBen
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    GatorBen Well-Known Member

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    Absent a spending cut, no it doesn't.

    And hell, even if we didn't have a deficit and the government was just going to sit on the money, the government still lost money on the deal because it agreed to be paid in non-inflation adjusted dollars in the future rather than being paid the money now and earning a return on it.
  9. philobeddoe
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    philobeddoe Well-Known Member

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    Why must this legislation reduce the deficit? Your guys request for $3.7 billion to pay for the keep and care of your illegal buddies doesn't reduce the deficit. You guy's ACA didn't reduce the deficit.
  10. persegator
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    persegator Active Member

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    Those taxes are the same under both alternatives. The only question here is when will the entity be permitted to deduct a capital expense. If it's in year one, that will result in a larger federal deficit in that year. Since we have a policy on not defaulting on our obligations, how will that larger deficit be covered?
  11. persegator
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    persegator Active Member

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    That's a separate issue. There are two questions:

    #1 - What is the effect of the altered depreciation schedule?

    #2 - Is that effect desirable?

    We are stuck on number one.
  12. philobeddoe
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    philobeddoe Well-Known Member

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    I don't think you really understand what bonus depreciation is .... versus accelerated depreciation methods and straight-line depreciation and the fact these different methods only result in timing difference between when an assets tax basis is expensed.
  13. GatorBen
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    Because Republicans are purportedly the ones who care about reducing the deficit.

    If you're happy to pass a deficit increasing bill and the justification is "why should it be deficit neutral, things Democrats like aren't," the premise of the thread is absolutely correct. Republicans don't really care about reducing the deficit.
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  14. philobeddoe
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    philobeddoe Well-Known Member

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    But .. if the deduction existed in years X1, X2, and X3 ... then is extended through years X4, X5, and X6 ... there is no decrease in tax revenues in years X4 through X6 relative to X1 through X3. So, the extension has no impact, especially an increase, on the current operating deficits of X4 through X6.

    Your argument is .... "well, if we don't increase the tax burden on you ... there will be an increase in the operating deficit". That's bullsnap.
  15. GatorBen
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    GatorBen Well-Known Member

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    I don't think you understand time value of money if you are still having trouble understanding this.

    Let's put it this way: someone owes you $100,000. They tell you that, instead of giving it to you now, they'll send you $10,ooo per year for the next ten years. Under your explanation you should be okay with that proposal, because you'll still have your $100,000, the only difference is timing on when you'll have it.

    You won't agree to that, because it's a bad deal for you for the exact same reason that it's a bad deal for the government. You're either having to borrow (and pay interest) to pay for things that you need to spend that money on now, or you're foregoing the return you could have earned on the money.

    Getting the same amount "with just a timing difference" isn't getting the same amount if you're going to be getting non-inflation adjusted dollars in the future.
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  16. philobeddoe
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    philobeddoe Well-Known Member

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    Well, they may very well be but ... they seem to be opposed to increasing their own tax burden so you lefties can piss away even more money on wasteful, inefficient, ineffective boondoggles. I think they want to reign in the leftist waste that has given the US a $17 trillion national debt.
  17. Bushmaster
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    When the company that sold the equipment reports the profit earned on that piece of equipment.

    If you want to discuss all the inequities the federal government puts on businesses and how they report income, we can go that route. They weigh in favor of the government in my experience especially as they relate to installment sales by dealers.

    But the argument here is false. CNN is claiming, as are others, that unless the government does away with the 50% bonus, deficits will increase. That is a false claim.

    What they should state is that deficits will NOT DECREASE if this law stays in effect, but that is only true for year 1.

    I can state that unless we raise corporate tax rates to 50%, deficits will increase!! Doesn't make that true.

    Much like saying "unless you give me more money, my overspending will increase". Again, YOUR overspending is not MY fault.
  18. philobeddoe
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    philobeddoe Well-Known Member

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    Look ... I know USC Title 26 .... and I now know a leftie lawyer who hasn't a clue what the hell he/she is talking about. You're so flipping lost on this matter you're just now throwing obama against the wall hoping it will stick. You'll never get your leftie self out of this hole!
  19. persegator
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    By law, the bonus depreciation schedule is set to expire. It would require a new law to extend it. If no action means lower deficits and higher taxes, then I would view an action to renew or extend as a tax cut. At the very least its allowing a tax cut to continue despite its effect on the deficit.

    That's perspective though. Lots of laws are passed that impact the deficit (such as yearly spending bills), that doesn't mean they are all bad or necessarily indicate hypocrisy with respect to it.
  20. Bushmaster
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    Bushmaster Well-Known Member

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    1. The government does "agree" to anything. It dictates policy and us peasants execute.

    2. The government isn't "losing" anything. You are forced to give the government a % of your income as dictated by law.

    Not one time have you complained about a business spending $100,000 NOW and having to wait 8 years before getting the entire deduction. Does time value of money apply to the business or just the federal government?

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