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Thanks For Paying Taxes. Here's A Receipt.

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Re: Thanks For Paying Taxes. Here's A Receipt.

#161

Post by jbooth »

TGJ wrote: post #159
philwelch wrote: post #153

Earlier quoted context omitted.

"Putting money in a jar" is a very handwavy way of addressing the problem of saving billions of dollars. You don't just put billions of dollars in a "jar". In practice, amounts that large have to be invested in some way. If you rule out federal treasury bills, what does that leave? State and municipal bonds? Pretty tricky (you could make a case for it though). How about stocks? No, that's de facto nationalization of…

Why do large amounts have to be invested? Is it because of inflation or large amounts of money cannot sit around without someone wanting to touch it?

Well, one way to avoid having to invest so much of the money would be to pay retirees directly out of the receipts for a given year. Then you only have to invest the surplus, which shrinks the investment problem considerably. That surplus could be invested in T-bills.

The above is roughly how the system works now, makes sense right?

Of course, you'll see various peopl with an axe to grind calling it a pyramid scheme for the pass-thru payout. And claim that the government is "raiding" the trust fund by selling it t-bills, or say that the trust fund is backed by quote "worthless IOUs". I didn't know t-bills were so disreputable! But aside from the silly rhetoric, it's a pretty sensible strategy.

It shouldn't be a surprise that the people who administer the program 40 hours a week actually kinda know what they're doing. Unless you come to the conversation pre-equipped with ideology and blinders.

Re: Thanks For Paying Taxes. Here's A Receipt.

#162

Post by jbooth »

ataggart wrote: post #127
DanielBMarkham wrote: post #28

The late senator Daniel Patrick Moynihan supported sending people statements of what was in their social security. His idea was that if people never saw what was in there, they'd never miss it when it was gone. I think this is a logical extension of that idea, and its great. I'd also like to see the flip side of the receipt contain a guess for how the same tax amount would break down the following year based on curre…

>His idea was that if people never saw what was in there... The problem of course is there's no "there" there. Any funds collected today by payroll taxes, and not used for today's benefits, are lent to the general fund and spent. There are no funds being saved for next year's benefits, much less the current tax payers. Now, it is true that the Social Security system then holds "assets" in exchange for that cash, name…

Quote: The problem of course is there's no "there" there. Any funds collected today by payroll taxes, and not used for today's benefits, are lent to the general fund and spent. There are no funds being saved for next year's benefits, much less the current tax payers.

You used the word "lent". Note that that is different from the word "given with no expectation of repayment". Care to revise your second sentence in light of your first?

Re: Thanks For Paying Taxes. Here's A Receipt.

#163

Post by jbooth »

Ratufa wrote: post #142
ataggart wrote: post #127

Earlier quoted context omitted.

>His idea was that if people never saw what was in there... The problem of course is there's no "there" there. Any funds collected today by payroll taxes, and not used for today's benefits, are lent to the general fund and spent. There are no funds being saved for next year's benefits, much less the current tax payers. Now, it is true that the Social Security system then holds "assets" in exchange for that cash, name…

Your scenarios, while technically accurate, leave something out. Here's another version: D) Your child spends his/her high-school years mowing lawns, doing part-time jobs, etc, in order to save some money to help pay their way through college. You encourage them to do so. The money earned is put in a jar. You take that money, replace it with an IOU, and use it to pay for household expenses along with more frivolous t…

I think government t-bills are a little more reliable than a hand-scrawled IOU note in a jar.

Re: Thanks For Paying Taxes. Here's A Receipt.

#164

Post by jbooth »

mkramlich wrote: post #135
timr wrote: post #118

Earlier quoted context omitted.

"I don't agree that all politicians are Democrats or Republicans, or that it's pointless to speak about issues where the parties in power aren't making good proposals." I didn't suggest that it was. I just think that if we're going to have an intellectually honest discussion about the matter, we have to disregard most of the Republican party rhetoric: the poor are not the problem. The elderly are the problem. As far…

I don't even think the elderly are the problem. I think Congress as a whole is the larger problem. And the structure of national elections, the existance/tactics of the Republican Party, as a close 2nd and 3rd.

Different sorts of problems - the elderly are a financial problem - not because they're bad people for being old, but because their retirement represents a huge financial liability.

The other problems you state are meta-problems - they're the reason we can't solve any actual problems. And possibly more concerning than actual problems.

Re: Thanks For Paying Taxes. Here's A Receipt.

#165

Post by philwelch »

TGJ wrote: post #159
philwelch wrote: post #153

Earlier quoted context omitted.

"Putting money in a jar" is a very handwavy way of addressing the problem of saving billions of dollars. You don't just put billions of dollars in a "jar". In practice, amounts that large have to be invested in some way. If you rule out federal treasury bills, what does that leave? State and municipal bonds? Pretty tricky (you could make a case for it though). How about stocks? No, that's de facto nationalization of…

Why do large amounts have to be invested? Is it because of inflation or large amounts of money cannot sit around without someone wanting to touch it?

Inflation/time-value of money is a big part of it, actually--not collecting interest on that scale is an opportunity cost of billions of dollars.

There's a macroeconomic issue, as well--if you just let that money sit in an account for years on end, the money supply gets fucked up. Money just disappearing into a hole is essentially deflationary, and deflation is catastrophic. Then, when the money comes back out again, you have inflation (possibly hyperinflation if the amount is big enough). Better to hold onto that money somehow while still keeping the money supply relatively constant--in other words, invest the money somehow.

For very similar reasons, it's much more difficult for the government to carry reserves of funds from year to year than it is for them to carry a debt.

Re: Thanks For Paying Taxes. Here's A Receipt.

#167

Post by dminor »

ataggart wrote: post #127
DanielBMarkham wrote: post #28

The late senator Daniel Patrick Moynihan supported sending people statements of what was in their social security. His idea was that if people never saw what was in there, they'd never miss it when it was gone. I think this is a logical extension of that idea, and its great. I'd also like to see the flip side of the receipt contain a guess for how the same tax amount would break down the following year based on curre…

>His idea was that if people never saw what was in there... The problem of course is there's no "there" there. Any funds collected today by payroll taxes, and not used for today's benefits, are lent to the general fund and spent. There are no funds being saved for next year's benefits, much less the current tax payers. Now, it is true that the Social Security system then holds "assets" in exchange for that cash, name…

> Now, it is true that the Social Security system then holds "assets" in exchange for that cash, namely, government bonds. But this is just accounting fiction.

No, there's no fiction - legally it must be paid back. That's why Social Security debt is included in the gross national debt.

Re: Thanks For Paying Taxes. Here's A Receipt.

#168

Post by joezydeco »

brettmjohnson wrote: post #114
joezydeco wrote: post #37

Funny, my local county government lists where all the taxes go. It's amusing (or enraging, I guess) to see we still pay for a Tuberculosis sanitarium.

Why does this surprise you? Since deficit spending is generally disallowed for state and local governments, nearly all sizable projects are funded through bonds. Bonds are basically loans with a promise to pay back in the future, generally with tax revenues. So you are paying off that 99 year bond to build a TB sanatorium built in the 1930s. We are doing the same thing today. My grandchildren will be paying for the s…

Didn't think about the bond angle. Thanks!

Re: Thanks For Paying Taxes. Here's A Receipt.

#169

Post by jasonkester »

TGJ wrote: post #160
jasonkester wrote: post #144

Screw receipts. What I want is a bill. The IRS seems plenty good at figuring out how much I should have paid in taxes and hounding me about it. Why not do those calculations in February and send me a bill: "We calculated that you owe $14,278 in taxes this year. Please submit payment along with the stub below. Alternately, you may choose to submit a tax return for our review." Government gets their money. I save a bit…

I don't think your idea would ever work. I think the way the tax system gets by everyday with all the corruption and waste associated with it is by the simple premise "Out of sight, out of mind". Taxes are paid by the average Joe a little at a time, I think most Joe's would simply freak out if they received a total sum bill at the end of the year. Actually, your idea would work in a perfect system, but we know how ra…

I imagine they'd keep track of your withholding, so the "bill" would be for the difference between what you'd paid already and what you owe. Just like your current tax return.

In the case of a refund, it might even take the form of a check that, if cashed signifies your intention not to file a return.

Re: Thanks For Paying Taxes. Here's A Receipt.

#170

Post by [deleted] »

yummyfajitas wrote: post #91
timr wrote: post #39

Earlier quoted context omitted.

It's definitely a great idea, given that members of both major political parties are absolutely loathe to touch the biggest sources of government expenditure: old person benefits (social security + medicare), and the military. Medical services for the poor (medicaid) are comparatively minor, but you wouldn't know it, given how much emphasis the Republicans place on the question of the "welfare state". With greater pu…

Medical services for the poor (medicaid) are comparatively minor, but you wouldn't know it, given how much emphasis the Republicans place on the question of the "welfare state". I'm not sure I'd describe medicaid as "comparatively minor". Medicare is $390B, medicaid $247B ($290B including the state contributions). I guess the threshold for expenses that don't matter must bet somewhere between $290B and $390B. http://…

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