MA: Mideast Budget 2012 (Statute)

[tmthforu94]

Income taxes are already extremely high from the federal government.

[tmthforu94]

I would like to propose that hot groceries be removed from exemption.

I would also like to propose putting the sales tax at an even 6%.

[tmthforu94]

I would be curious, Mr. X, on your opposition to removing hot groceries. That's how most states do it, Indiana for certain. Believe me, I worked in a grocery store for two years.

I would be open to a balanced effort of raising sales taxes, cutting credits, and cutting overall spending. However, I cannot support increasing our income taxes - Mideasterners already have enough pain on this front from the federal government.

[tmthforu94]

You must be logged in to read this quote.

I would like to debate this amendment, bringing the sales tax up to 6%.

[tmthforu94]

Can we discuss the sales tax for now?

[tmthforu94]

Governor, I'd really like to get some numbers for the current bill from the GM before we keep making changes, if that's all right with you.

Of course, but there's still going to be a deficit after the GM's numbers. Just trying to roll two balls at the same time, as I'm somewhat on a time crunch to try and get this done by the end of this session.

[tmthforu94]

Hey guys! Here are some numbers I received from GM Shua that should help move us along (Inks, if you could add these into the budget, that would be great!

You must be logged in to read this quote.

You must be logged in to read this quote.

GM Shua is still working on the pension tax. I also am assuming former Governor ZuWo's amendments to cut tax breaks has also been calculated in terms of what our deficit would be.


As it stands, once the $5.5 billion(ish) revenue is brought in from the lottery, we're looking at a deficit of around 17 billion. We also have a potential $3.1 billion from bringing the sales tax up to 6%, which would cut the deficit all the way down to $14 billion. We could discuss what we want to do in terms of that.

Also, I would recommend that both sides (proponents of the flat tax and progressive tax) submit their proposals on how the income (and corporate) tax rates should be set up, and let's send that to Shua to see how either/or would affect the deficit. Once we have that established, I'd recommend we all go through the budget once again with a toothpick, finding any area's where changes could possibly be made. We also have some government aid that'll need to be added in there (I'll start working on that).

Some scattered thoughts there, both hopefully it all makes sense!

[tmthforu94]

Governor Tmthforu94, would you be willing to support a further increase in the sales tax to 6.3%?

Well personally, I'd put it at 7%, as that's what I'm used to here in Indiana.

[tmthforu94]

Governor, we still need that increased revenue for the beer.  Also, wht is our estimated cost for keeping up the lottery?  We now need to add that to expenses as well.

I'll have to speak with GM Shua, then get back to you on that. Unfortunately I can't just figure numbers on this stuff, otherwise we'd have a balanced budget tomorrow.

EDIT: Here is what ZuWo said regarding the beer tax:

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.

[tmthforu94]

Also, wht is our estimated cost for keeping up the lottery? 

I just spoke with GM Shua - the estimates he gave were the total profit, so costs are included in that.

[tmthforu94]

For the pension tax, GM Shua estimates approximately $1.9 billion being brought in.

[tmthforu94]

Changing my vote on Amendment #2 to Aye if I still can

There aren't any amendments at a vote right now.  (Right? - Did I forget to close one?)

I think he might be referring to the gas tax.

[tmthforu94]

I've done a considerable amount of thinking on the issue of a progressive income tax, and at the end of the day, I just can't support those increases. First, I don't think it'll be necessary, as I think we can find other ways to balance our budget without raising taxes, especially by that much. But raising taxes on the wealthy is also raising taxes on thousands of small businesses across our region, and put together with the corporate tax, I just feel this would stifle job growth.

Considering that there is already a pretty steep progressive tax on the national level (shown below), I have to agree with Inks and 20RP12 and I ask the Assembly to please consider establishing a flat tax. I could probably be swayed to also limit it to two tax brackets, if the left feels strongly about a higher rate for the rich.

Federal level:

You must be logged in to read this quote.

[tmthforu94]

I'm willing to take a small progressive tax, with possibly only 2 or 3 brackets (though I prefer a flat tax). But I can't let it get too progressive - I don't too see too much of an increase, as the rich are already paying a pretty substantial tax rate from the federal government. I feel it'd be counterproductive.

We'll have to find some middle ground here, folks, as no one has a majority on this bill.

[tmthforu94]

I'm going to introduce my proposal, which originally had bi-partisan support until someone backtracked. Hopefully we can try and work with it, making small changes to find something acceptable to both sides.

Income Tax Rate:
0%    $0 - $13,000
3%    $13,001 - $250,000
5%    $250,001 - $1,000,000
7%    $1,000,001+

I'd personally rather do the income tax, see how much that cuts the deficit, then do the corporate tax instead of doing both at the same time.

[tmthforu94]

The original compromise was enough of a stretch for me - I can't support the proposed amendment to it.

[tmthforu94]

Income Tax Rate:
0%    $0 - $13,000
3%    $13,001 - $250,000
5%    $250,001 - $999,999
7%    $1,000,000-$10,000,000
9%    $10,000,001+

Mr. X, could you please clarify that this is a proposed amendment, not just a suggestion, so the Speaker will know that a vote will need to be brought on it?

[tmthforu94]

One has been requested.

[tmthforu94]

just to be clear, I haven't yet figured out how to analyze a regional tax plan that isn't either a flat tax or at least somewhat based on RL rates.

I'm assuming the gas tax will have a pretty substantial effect on our budget, considering how low it was originally. I'd like to see just how much that would have an impact, as that'll determine what needs done here in order to get a balanced budget.

Thank you!

[tmthforu94]

the gas and diesel tax revenue increases from 3.1 billion to 17.5 billion (14.4 billion increase). However, revenue from other sources can be expected to decrease by about 900 million due to lower consumer spending on other products. So, net increase of 13.5 billion.

This bring our deficit down to $1.64 billion! With us being so close to a balanced budget, I won't allow any increases to the income or corporate tax now, as I find it unnecessary.

[tmthforu94]

Our economy is already fragile enough as is - I don't believe we should be pushing for more tax hikes when we already are on track to having a balanced budget. There were some pretty lofty increases in the original compromise - I reverse my support for those now because those type of increases are unnecessary in reaching a balanced budget. Why do people want to increase taxes when we don't need to? Let's leave more money in individual's pockets so that they can go out there and invest in our economy and create more jobs.

Now, I'd be willing to go back to the drawing board on tax rates and come out with a fairer system than the current one, but I'm not going to continue to pound the wealthy with more taxes - the progressive tax laid down by the federal government is ridiculously high...are people forgetting that?

If these type of tax rates (federal and regional combined) were actually passed in RL, it'd simply cripple the economy. I don't want that to happen.

[tmthforu94]

Lastly, if we choose not to go the tax route, how do we get that last 1.64 billion?

I still have my proposed sales tax adjustment.

[tmthforu94]

 Increasing the sales tax to 6.0% would overall increase revenue by $3 billion, putting us several billion over a balanced budget, according to GM Shua.

That being said, I introduce:

You must be logged in to read this quote.

[tmthforu94]

Ladies and gentleman, I believe we now have a balanced budget! Congratulations.

[tmthforu94]

Well I'm not in favor of these taxes increases...but it is nice to see the budget I wrote so long ago make it through to just before the final vote to become law

I'd just like to say that while they are increases from the original numbers, they actually won't be increases in RL. In both of them, I found roughly what the average tax was from each state in the region - both the sales tax and gas/diesel taxes are actually slightly lower than what I found the average to be. So overall, this will be a tax cut for more Mideasterners. It's just not going to be as big of a cut as what it was before.