Mama Free Bird's Economics Plan
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  Mama Free Bird's Economics Plan
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Author Topic: Mama Free Bird's Economics Plan  (Read 2382 times)
Free Bird
TheHawk
Junior Chimp
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« on: October 12, 2015, 07:39:52 AM »
« edited: October 12, 2015, 07:41:40 AM by Free Bird »

My mom is an accountant and told me this is her idea for the tax code and spending. You guys are Atlas. Tell me what's wrong with it since you're all so good at it. The following is her typing, not me.

. Initially scrap it all so you can rebuild it from the ground up to make all possible tax forms simpler for people to read. There is no reason for it to be so complicated. Then you get the changes.

. Eliminate the income tax, period.

. Institute 20% national consumption tax, with essentials like food, clothes and the like exempt.

. Make a new business tax bracket. Small businesses, the real job creators, will pay little or nothing, and you gradually increase to 30% for large corporations, with no more loopholes (especially the home state loophole), and a 30% added tariff for outsourcing.

. Pass a Balanced Budget Amendment, with the exception of war and other crises, of course.

. Eliminate payroll taxes. Entitle people to the full fruits of their labor! Transition social security into a general budget item instead of its own trust fund funded by payrolls. Eliminate Medicare and Medicaid. Replace them with a space in the budget, which would be built from the ground up every year, that would be changed every year as needed to be used to pay for all the nation's previous year medical expenses. Basically, the government pays the bills.

. Do the same with community college, but through varying grants to the States every year to coincide with the elimination of the Department of Education. (By the way, other departments go away too. See the Plan to Restore America).

. Of course, you can't really balance a budget with such a heavy burden as that, even with the elimination/remodeling of two entitlements with a super entitlement, and funding a whole new level of education, even if it's by proxy.

. Withdraw most foreign aid, close bases, bring troops home, all the generally accepted, but never integrated because Congress is stupid defense cuts.

. If something isn't brought up, assume it is kept the same, but of course simplified.



Okay, then. There are things there I don't believe in there, but I figured I would let you guys dissect my mom's ideas. She's very proud of it.
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Taco Truck 🚚
Schadenfreude
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« Reply #1 on: October 12, 2015, 08:18:29 AM »
« Edited: October 12, 2015, 08:20:55 AM by Schadenfreude »


First of all that plan illustrates a complete lack of knowledge of the size and scope of the federal government.  Foreign aid is a tiny sliver of the budget.  Yet eliminating all of it would generate so much bad blood it would be catastrophic to our multinational corporations.  Actually we could eliminate almost 10% of our foreign aid budget quite easily and probably make some friends along the way.  Just stop giving money to two countries... Israel and Egypt.  Of course a duplicitous coward like Rand Paul would never cut off aid to the black hole that is Israel.

. Institute 20% national consumption tax, with essentials like food, clothes and the like exempt.

How did I know an extremely regressive tax that punishes the poor and middle class would be the answer?  So no taxes on cars and houses either?  Or are the poor supposed to walk everywhere and live under bridges?  Houses and cars are the two biggest expenditures for most people.

. Pass a Balanced Budget Amendment, with the exception of war and other crises, of course.

When in your life has there not been a crisis?  Who defines "crisis."  I would say there is a "crisis" for the poor and middle class right now.  Certainly more of a "crisis" that Iraq pre-Bush.

Anyway the plan just goes down hill from there.

Get serious.
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Foucaulf
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« Reply #2 on: October 12, 2015, 09:01:32 AM »

Okay, let's do some tag-teaming here

. Initially scrap it all so you can rebuild it from the ground up to make all possible tax forms simpler for people to read. There is no reason for it to be so complicated. Then you get the changes.
Over what duration? Will she lose her job in the transition?

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This is almost the opposite what many economists support, which is the elimination of the corporation tax and a more progressive income and consumption tax system. The arbitrary rates shows a lack of marginal thinking. For example, if the consumption tax has only two tiers - 20% vs. 0% - wouldn't firms lobby to classify their product as a necessity, given the significant drop-off in tax if they succeed?
Similarly, with a 30% tariff on outsourcing and transaction costs for a company to look for new contractors, there will be a serious contraction in economic activity in anticipation of the policy being law.

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The whole point of a fund is so that politicians can't just seize the whole thing if they want to pursue some project of their own.

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No, what this sounds like is a single-payer system that deprives the government of ways to ensure its solvency. What stops doctors, pharmaceuticals and hospitals to independently decide to overbill the government?

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Ditto the above, except now the actors are 50 states instead of healthcare firms. Not to mention one of the purposes of the DoE is to address within-state education inequality, which may be worse than between-state inequality.

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This plan sounds like your mother thinking what makes her work the easiest, as an accountant, is also what is best as public policy. This kind of thinking is narcissistic and self-defeating.
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Schadenfreude
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« Reply #3 on: October 12, 2015, 10:43:44 AM »

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The whole point of a fund is so that politicians can't just seize the whole thing if they want to pursue some project of their own.

Yeah... I was a bit dumbstruck by that one as well.  I mean the social security lock box is one of the few constraints in this wacky government.  It should be strengthened more so than anything else.  Frankly it would be nice to have more things like that and the Post Office.  Republicans complain about the Post Office constantly but fail to mention it is almost entirely self funded and solvent by any normal accounting standards.
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CrabCake
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« Reply #4 on: October 12, 2015, 12:21:17 PM »
« Edited: October 12, 2015, 12:32:59 PM by Crab »

A progressive corporation tax sounds fun in theory, but it isn't always so. It would effectively subsidise unprofitable start-ups which don't employ a lot of people, and penalise the salaries of working-class grunts who work for wall-mart.

The consumption tax exemptions, (from somebody who supports the general idea) are less simple than you think. Here are the current  VAT rates for my country:

https://en.wikipedia.org/wiki/Value_Added_Tax_(United_Kingdom)#Rates

Hardly a less complicated system! In particular, you have a constant stream of lobbyists trying to reclassify their products as essential, and other such shenanigans. (Witness the debacle when the government tried to reclassify hot take-away as under the standard-rate, as opposed to cooled-down-heated-goods which would fall under the reduced rates. Or the legal dilemmas surrounding the Jaffa Cake - is it a cake (no VAT) or is it a chocolate-covered biscuit (standard rate, although biscuits without chocolate do not pay VAT for some reason).

Tariffs are always bad.

The medical stuff sounds good from a left perspective, BUT it would hit a brick wall as effectively handing hospitals and clinics blank cheques would be a bad idea. You would have to dramatically increase oversight, maybe even quasi-nationalise them. That would increase the old worry of "government panels" picking and choosing who gets Lifesaving Treatment A.

What percentage of each tax would make up the government revenue? I assume with elimination of the income and payoll taxes, the bulk would be paid for by consumption tax, or perhaps more feasibly a VAT? as in that darn FairTax plan?
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Ebsy
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« Reply #5 on: October 12, 2015, 01:46:13 PM »

Further evidence that Accounting and Finance are joke majors.
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Taco Truck 🚚
Schadenfreude
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« Reply #6 on: October 12, 2015, 03:07:41 PM »

Further evidence that Accounting and Finance are joke majors.

Because violin performance majors probably have a better idea about what percentage of the federal budget goes to foreign aid?

There are ideologs in all fields.  Look at Ben Carson.  I think if you asked most life sciences majors and professionals they would tell you evolution is a fact.  Just because Ben Carson acts like a jackass doesn't mean we should shut down all medical schools.
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King
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« Reply #7 on: October 12, 2015, 04:31:10 PM »

Being a cashier doesn't qualify your mother as an accountant.
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Free Bird
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« Reply #8 on: October 12, 2015, 04:37:02 PM »
« Edited: October 12, 2015, 04:40:25 PM by Free Bird »

a) King, now you're just being a prick for its own sake. She's a controller at a major company.
b) Good discussion. I want to stress that I don't agree with some of the ideas, like the government-billed healthcare for reasons you guys described.
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Schadenfreude
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« Reply #9 on: October 12, 2015, 05:57:31 PM »

a) King, now you're just being a prick for its own sake. She's a controller at a major company.

I don't really take note when liberals take video cameras and stick a mic in the face of some uneducated toothless redneck living in a trailer park and coax them into saying something obtuse or racist.  But when someone with a 4 year degree says something like "eliminate most of foreign aid" I sit up and pay attention.

If your mother was working at a company that had a department that handled a lot of supplier and customer relations but counted for less than 1% of the company's budget would she honestly try and balance the books buy cutting most of that department's budget?  Your bang for the buck with that maneuver is terrible.
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RI
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« Reply #10 on: October 12, 2015, 08:35:25 PM »

Yeah, no. Corporate income taxes are almost completely ineffectual, eliminating the income tax is asinine, BBA would be debilitating, consumption taxes are highly regressive, tariffs do nothing but generate deadweight loss, foreign aid is almost irrelevant, etc. etc.
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ag
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« Reply #11 on: October 13, 2015, 01:18:07 PM »
« Edited: October 13, 2015, 01:20:16 PM by ag »

a) King, now you're just being a prick for its own sake. She's a controller at a major company.

I don't really take note when liberals take video cameras and stick a mic in the face of some uneducated toothless redneck living in a trailer park and coax them into saying something obtuse or racist.  But when someone with a 4 year degree says something like "eliminate most of foreign aid" I sit up and pay attention.


The parts that do not concern foreign adi are no better. Though, of course, that item itself is remarkably indicative of the "plan authorīs" relationship with reality. We do not have unscientific fiction board here, unfortunately, or I would suggest moving it there.
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ingemann
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« Reply #12 on: October 13, 2015, 02:31:04 PM »

a) King, now you're just being a prick for its own sake. She's a controller at a major company.

I don't really take note when liberals take video cameras and stick a mic in the face of some uneducated toothless redneck living in a trailer park and coax them into saying something obtuse or racist.  But when someone with a 4 year degree says something like "eliminate most of foreign aid" I sit up and pay attention.

Just because you're smart enough to get a degree and have a successful career, it doesn't mean you know anything about the national budget. Of course being successful in the private sector often give you the arrogance to think that you know more than you do We have seen it often successful business people who come with their solution to society's ills, and when come with a solution which at best is rather stupid and at worst is a disaster.
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Kingpoleon
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« Reply #13 on: October 31, 2015, 04:36:54 PM »

What if we did a progressive business tax with a 5:3:2 ratio? Income:avg. salary:expenses. Half of the tax is to come from money made, three-tenths is to be based on the average salary per non-board member/CEO employees, and one-fifth is to be based on the money spent.
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Intell
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« Reply #14 on: October 31, 2015, 10:45:51 PM »

While I don't agree with her plans, you guys are being dic*s.
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