MA: Mideast Budget 2012 (Debating)

[ZuWo]

I'm wary of raising taxes but can agree on a tax hike if it's necessary (I just fear the vengeance of the beer drinkers ).
However, we should also look into spending cuts in order to balance the budget. The education, for example, is by far the biggest part of the budget. Even if it's not a popular thing to do, we might have to consider spending cuts in this area as well.

[ZuWo]

I suppot the beer tax amendment, if only to make sure wine and beer are treated equally.

[ZuWo]

So now that we've decided to raise taxes on beer (we still need to figure out how much money this generates), are there more ideas as to how we can balance the budget?

[ZuWo]

I'm leaning towards supporting shua's idea and ask the members of the Assembly: Which specific tax expenditure(s) are you ready to sacrifice in return for a balanced budget?

[ZuWo]

If we want to do away with some of the tax expenditures/tax cuts in order to move closer to a balanced budget we need concrete suggestions.

We could, for example, reduce tax deductions for charitable contributions (these tax exemptions currently account for $3.62 billion of our budget). We could also cut the so-called R&D (Research & Development) tax breaks for corporations (they make up $7.0 billion of the budget). If you don't like that feel free to put forward your own ideas.

[ZuWo]

GM shua has informed me that the higher beer taxes generates an additional revenue of $150 million. That's not much more than a drop in the ocean. In fact, our debt is still at $32 billion even with this small tax hike.

[ZuWo]

I propose the following amendment (what A-Bob and shua said makes sense; it's hard to cut a lot of money in the "Spending" part but we have room to cut some of the tax breaks):

You must be logged in to read this quote.

[ZuWo]

This isn't necessarily "raising taxes," it's cutting tax breaks we don't need to try and balance the budget. I'm in favour so far.

Even if what I'm proposing is not a direct spending cut, proposals such as my amendment always hurt. For instance, if there is a smaller tax break for charitable contributions some people may be less inclined to give to charity. But that's the price we have to pay for a more balanced budget - I'm not necessarily talking about a completely balanced budget anymore. It seems that we will end up with some sort of deficit but I want that deficit to be as small as possible.

[ZuWo]

Believe me, I don't want to cut education spending but we might have to do it if we want to avoid a deficit because the education is a huge part of the budget. It is easy to say "I don't want spending cuts in this area etc." but it's more difficult to make concrete suggestions. If you are fine with a $28, 29 or 30 billion deficit I can live with that. If not, you are free to put forward a concrete plan to reduce the deficit.

I for my part have made a concrete amendment and I am looking forward to your comments.

[ZuWo]

I once again urge the members of the Assembly to vote AYE on this amendment. By approving this amendment, we can cut the deficit to roughly $27 billion. Still too high, but undoubtedly better.

[ZuWo]

I've got a new amendment for you if the current amendment gets passed.

You must be logged in to read this quote.

[ZuWo]

Thanks for pointing that out. I'll correct these errors.

[ZuWo]

Thank you, shua, for these insights.

I never claimed my amendment would not be painful but at this point we simply don't have many choices. As A-Bob and shua pointed out earlier in this thread, we can't cut a lot from the budget because certain programs are actually nearly underfunded in this budget. That's why, as shua suggested, we are probably forced to focus on tax expenditures instead.

[ZuWo]

Alright, the debt is down to roughly $22 billion now (from $32 billion). If anyone has other suggestions for cuts to the budget, feel free to post them here.
If we establish a regional lottery we can do something against the deficit on the revenue side. This might be an effective plan to solve some of our problems because there is not a lot of (if any) room for cuts in government programs.

[ZuWo]

I can live with that.

[ZuWo]

The net revenue from the sale of lottery tickets alone (excluding taxes on winnings) is around $4.8 according to an estimate by GM shua. Once we have figured out how much money we collect by the tax on lottery winnings and the pension tax, our budget seems to be ready.

[ZuWo]

EDIT: $4.8 billion of course. $4.8 would be a bit disappointing.