Okay, so I’ve covered some taxation issues this week with my post on the estate tax, so now it’s time to cover some spending issues and discuss which entitlements need to go. I’ve often wondered what would happen if those of us who actually pay federal taxes (hat tip TNA) were allowed to allocate where our tax dollars were spent. Think about it: how much more fun would filling out a 1040 be if there were a separate worksheet you could attach that laid out where you wanted your money spent. It’s an interesting exercise in democracy, when you think about it, because Congress clearly isn’t spending the money where the majority of voters (notice I didn’t say taxpayers, though that’s probably the case as well) would like to see it go.
Which programs would live and which would die if it were up to you? Would you allocate your entire tax bill to one program, or would you spread the wealth? How would our country be different if the government had to abide by taxpayer wishes?
I have a few sacred cows I'd like to escort to the slaughterhouse. I know you do, too. And if the defense industry is worried about sequestration, they better hope I never get to pick where my tax dollars go. Not that defense isn't important; on the contrary, it's critical. But there's a vast difference between defense and global force projection. With that said, here's how I'd save the country:
We're trying to find a trillion per year, right? Yesterday I pointed out where we could pull in $76 billion a year just by doing away with the ridiculous War on Drugs. Here's how I get us almost halfway to our goal without even breaking a sweat:
- Kill the mortgage interest deduction. (Total revenue: $100 billion.) Why are we encouraging people to own a home when that is typically one of the worst investments a person can make in their life? Gone.
- Kill the tax exemption for religious organizations. (Total revenue: $71 billion.) Ever heard of the Establishment Clause? Give me a break with this shit. Besides, 1 out of 5 Americans (and 1 out of 3 under 30) are atheist or agnostic, the fastest growing demographic of the American population. Religion is clearly selling a product (despite the fact that demand is dropping like a rock), so there's no reason they shouldn't be paying the same corporate taxes as any other sales organization. Gone.
- Kill foreign aid. (Total revenue: $50 billion.) Sorry guys, we just don't have it this year. Or any year. Fact is most of us here would rather use the money to feed our own homeless than to subsidize cell phone tower construction in your shitty 3rd-world backwater. Don't hate the player, hate the game. Gone.
- Kill charitable deductions. (Total revenue: $50 billion.) This one has the charities screaming bloody murder, but the fact is that we all have our pet causes and we'll donate the money whether or not we get the write off. This might, however, serve to eliminate some of the scummier charities out there, and that's a win for everyone. Gone.
So that's $350 billion before we even get to welfare and defense (same thing, in many ways).
Let's start with defense, because that's where a huge amount of the bloat is. We're spending $711 billion a year just on "defense" (in other words, that figure doesn't include total national security spending, just military spending). This is more than the next 13 countries on the list combined. You'd think with all that money someone in the Pentagon could afford a Rand-McNally globe, which might drastically alter our defense strategy going forward by calling the Joint Chiefs' attention to the fact that we're geographically isolated from every credible threat on Planet fucking Earth. There is no reason we should stay in the stepping-on-people's-throats business when we can just kick back and sell them the bombs to blow themselves up. Trust me, they'll do it.
When it comes to welfare reform I don't have a lot to add to the debate except that we need to do something to keep
from becoming a self-fulfilling prophecy. I'm not suggesting eugenics by any means, but I think it's safe to say that the gene pool could use a little chlorine and we probably accomplish that by removing incentives to have more children. Believe me, the rich, smart people have already figured out that kids pretty much suck. Get the rest of the country on board and maybe we run a little leaner and more efficient going forward.Social Security retirement age of 62 in some cases? GMAFB. With life expectancy projected over 80 years in the next decade, we just can't afford to have you sitting on your ass for the last 20 of them. Better yet, how about you fund your own retirement and quit whenever you want? Sounds like a better plan to me. Otherwise raise the retirement age to 75 and we'll keep you in Meow Mix for your last five years. I'm not a complete monster. And means test, for fuck's sake. You Social Security check isn't meant to cover your monthly foie gras and champagne tab.
So those are the broad strokes of my plan. What do you guys think? Where do the cuts need to happen? We've had some pretty good debate so far and a couple of you in the defense industry have been really forthcoming with tales of fraud, waste, and abuse. Is defense our nation's biggest boondoggle? Or is it something else?
If you could allocate where your tax dollars were spent, who would get the money and who wouldn't?
Nice plan you got up there! One of the bigger issues is really the way pensions are given out. Like clockwork you manage to find many stories of rampant fraud and stories that have in some cases led to cities to declare bankruptcy.
Here is a good article on how San Bernardino went bankrupt:
http://www.reuters.com/article/2012/11/13/us-bernardino-bankrupt-idUSBR…
The TL;DR version of it is essentially entitlements continued to increase, regardless of economic climate which culminated in a shit storm and a bankruptcy.
I agree with most of your plan up there, but read a great article on sports welfare. Here is the link:
http://www.sportsonearth.com/article/40595178/
Unlike most of what you outlined above, sports isn't a sacrificial cow, and is in fact a very profitable business that continues to subsist on handouts from the government. Closing these loopholes may allow for a little bit of relief, somewhere. Besides, the entire sports system could use a massive overhaul anyway. Just ask Miami Marlins fans and citizens of Miami how they feel being on the hook for the stadium (especially when their team is about to go the way of the Montreal Expos). Or the Sacramento Kings fans given that their owners are more adept at running businesses into the ground rather than run a business.
Ha! I was wondering if someone else was going to post the sportsonearth link!
Great minds..
Heh. The best part about it how it is a plan that favors both parties, allows sports businesses to sustain themselves and takes major burdens off of tax payers.
amen
I won't get into a big explanation as to why I don't think the defense budget should be cut; however, I think the way government and the military spends money when it comes to things in the defense category could be handled a lot better. As I mentioned in a previous post this week, divisions in the military and DoD are allotted X for their fiscal year budget (which ends at the end of each September). If they do not spend X, that money goes back to the treasury and ultimately, their budget for the next fiscal year will be lowered to at or around what they did spend. Usually, in an effort to retain or grow their budget, each department ends up spending X. The example I gave earlier is Unit A will break down. Instead of spending Z to fix it, the government ends up spending Z^1000 to replace it entirely in order to spend their allotted budget. This type of waste needs to be corrected. If and when it is corrected, you will see defense spending come down dramatically without having to lower the budget.
Other than that, shit government programs like the department of education need to be axed entirely.
I agree with ridding tax exemptions for religious organizations. Most are scams anyway.
Social Security needs to go. My father probably won't even see a dime from it, I sure as hell won't see any money from it, so it is useless to me.
This may sound callous, but I am a big proponent of natural selection. I feel like the government has created too many programs that go against nature's will of having the strongest survive. The world really doesn't have a use for a crack addicted mom spitting out a kid every year. She is a drain on the world and society and all she is doing is making sure her lazy, drug addicted legacy lives on by being able to reproduce. Does this mean that programs like welfare and unemployment need to go entirely? No. There are good, hard working people that catch a bad break in life and need the help to get back on their feet. There need to be tighter regulations for who gets money.
I am not sure if a lot of you are old enough to remember Old Dirty Bastard, but back in the 90s I remember seeing a video (on MTV?) of him getting in his limo and taking his family down to the welfare office to get food stamps or something. The guy was a millionaire at the time. That is a broken system.
http://en.wikipedia.org/wiki/Welfare_queen
Key quote: "Although American women can no longer stay on welfare indefinitely due to the Personal Responsibility and Work Opportunity Act, the term continues to shape American dialogue on poverty."
I think there is a ton of misconception out there about who exactly is cashing welfare checks. It's like people completely forgot about welfare reform under Clinton/Gingrich.Is there some fraud? Probably. But the vast majority of people are legitimate recipients.
However, the existing power structure is beyond direct challenge, so targeting certain groups for 'natural selection' seems to be rather fecitious.
Yes?
Yep, I fat fingered it for a double entry
DELETED
Not disagreeing with you here, just curious. Are you suggesting we don't help the crack mom at all? Just take her kids and wait for "survival of the fittest" to kill her off?
In a perfect world this person wouldn't be allowed to breed. In a realistic world the state should take her children. This person is a lost cause.
Also, I am not sure if any of you saw this, but this is the type of cancerous thinking that is plaguing politics. How this woman is an elected official blows my fucking mind.
http://www.theblaze.com/stories/detroit-councilwomans-actual-rant-we-vo…
[quote=Nefarious-]Also, I am not sure if any of you saw this, but this is the type of cancerous thinking that is plaguing politics. How this woman is an elected official blows my fucking mind.
http://www.theblaze.com/stories/detroit-councilwomans-actual-rant-we-vo…]
Good example of the type of person Marcus Halberstram was referring to in his top comment.
I think you've hit the issue with charitable donations on the head, but your solution misses the major problem. The issue isn't that people can deduct a charitable donation, but that "charities" are so poorly defined in the tax code. A 501c3 non-profit is both your local dog park, with a budget of maybe $5,000 a year reliant completely on donations, and major hospitals with billion dollar budgets who get to collect donations and charge ridiculous prices to insurers. Or, hell, a 501c6 is both your local chamber of commerce and, somehow, the NFL (seriously?).
I'm all about slaughtering some sacred cows, but maybe we should take a long hard look at the tax code first.
From a lot of the work running across my desk this week I've seen pension contributions rise for local governments as much as 25% in a year while their taxable value DROPPED in the same year. There is no way that this is sustainable. Something should be done about that.
I really like a lot of these ideas. I had no idea it cost the country $71Bn to subsidize religious organizations (that's insane). I'm also glad to hear 1/3 of young Americans are atheist/agnostic. I'm not a fan of doing away with charitable deductions, though. Sure, it might get rid of a few shady organizations, but a lot of really good causes run on shoestring budgets as it is and without incentive to donate we'll undoubtedly see, at the very least, a little less money being allocated and a little less can be more than enough to sink some of them.
I'd also like to see the defense budget cut but I honestly have no idea what's appropriate/necessary, but I'm sure we don't need to be spending as much as the next 13 countries combined. That number becomes even more troubling when you consider the fact that most of those 13 are allies.
I think 75 is way too steep for the retirement age. I think I heard the number 68 being tossed around a bit and I think that or 70 is more reasonable than 75 and a hell of a lot more reasonable than 62.
And yeah, poor/stupid people need to stop reproducing like rabbits.
In regards to raising the retirement age for SS purposes, I'm all for it. But we need to be careful about throwing around life expectancy numbers. Working class people have shorter lifespans and tend to become less employable than white collar workers as they age. There are plenty of professions simply unsuitable for a 74 year old. I think the retirement age should be bumped up a few years, but I think a better solution is strict means testing.
Edit: Just to add, I'm loving these posts by Eddie and TheKing. Eddie, agree with most of what you laid out in your post.
Remove the child tax credit. Why should we incentivize people to reproduce? If anything we should provide a disincentive.
Cut all defections, have a threshold of say 25K-30K in income which is tax free and let everyone pay into the system. That will keep the truly poor from shouldering anymore than they already have to and widen the base appropriately.
And while I would support say a $100-200B cut in defense, I have no issue with defense spending since it is something which makes us directly stronger. Being able to bully and force people into compliance is a strength. It is also a true task of the Federal government, unlike the majority of bullshit the nanny state does now.
Like someone said above, we need to get rid of SS. Phase it out over 20+ years with some needs based testing in there as well. Defense spending needs to be cut some as well. Fix unemployment benefits so they are limited to the 20 weeks (or whatever it is) that companies actually take out of your paycheck. People shouldn't be on unemployment for 2+ years.
I'm all for all of these ideas. Where I have an issue is envisioning Obama standing up and announcing this in the next State of the Union address. Can't quite see it. Maybe some LSD will fix that (missed out legalising that too). To be frank, most of this stuff centralises around, yes they are noble causes for money to go to, but the obligation of the US government is to the US population as a whole. The rest of the world has their own governments to do that. It's my main objection in charitable donations. If they deserve it, let us donate it. I don't see why the leaders should get the credit for handing over my cash to a charity.
I think Obama will cut a bunch of stuff. Republicans aren't going to raise taxes without the cuts. I mean lets get real, Obama could care less about the poor, just like the Republicans. No one cares about them because they are a) poor, b) powerless and c) generally ignorant.
So Obama will cut shit since he isn't running for re-election, Republicans will allow some tax increases (and probably slip in deductions to offset them) and the poor will get fucked, as always happens since the dawn of time.
We should all just focus on doing everything possible to minimize our tax burden, thereby starving the parasite from its much needed lifeblood.
You're crazy. The poor and ignorant are the base of the Democratic party. Why would Obama want to piss them off?
Cause they will always vote Democrat no matter what and Obama isn't facing re-election again. The poor have been screwed under Obama as they will continue to be screwed.
VOTE BY EDUCATION TOTAL Democrat Republican No High School (3%) 64% 35% H.S. Graduate (21%) 55% 44% Some College (31%) 51% 47% College Graduate (27%) 49% 49% Postgraduate (18%) 58% 41%
One could say, depending on one's side, that (a) education has a liberal bias or (b) stupid people tend to vote conservative. I leave that up to you to determine. Both parties are run by very, very smart people who are good at shaping the mass perception of reality....
Realistically, Obama has most of the power in this bargaining process. 100% uncut fiscal cliff is actually what he wants, so everything from that starting point is negotiable. For deficit hawks, I'm not sure why they'd worry given a rise in income + expdenditure reduction -> net budget reduction, but then again I'm not a macro economist so what the hell do I know. Personally, I've got the backup food, guns, and wilderness cabin ready, so yeah, WHEEEEEEE hold on to your hats folks!
Am I the only one that got a nice big laugh out of this line? Eddie, I'm not sure if that was intended, but it is golden. As far as funding cuts, you really have a solid plan there. I really feel that a major problem with our deficit is the "entitlement" programs. Social Security was never meant to be your sole means of retirement and was never designed to be the only means to live on. And that isn't even including the shift in workers to retirees since the program was enacted.
And don't even get me started on welfare spending. Where I went to undergrad (Minnesota) I knew a woman living entirely on checks from the government. She was a single mother.... of 6 kids! She made so much in "support" checks every month that there was absolutely no incentive for her to get a job. Habitat for Humanity came in and built her a house. FOR FREE. Brand new, 2 story, 3 bedroom home free and clear. They picked up the bill for construction, maintenance, AND TAXES.
How can this continue?
Retirement age means testing will bring back the workman's comp/disability fraud of yesteryear.
Lets talk short-to-medium terms effects though. Eliminating the mortgage interest tax deduction is one where the arguments against (i.e. it would kill the mortgage market) are less relevant because of where rates are currently. It also brings in a lot more if/when rates go up.
Why are student loan tax deductions not similarly on the table. An individual is not a corporation, and in 'Merica we tax income not consumption.
2 only works if you also do 4, and as a conservative, I'm scared of that leading to further privately provided social services cuts (which will lead to greater publicly provided social services). Charities are less efficient than the business environment we are used to. They also attract generally less capable people (at least the ones doing the line management for any extended period of time) and government is much worse.
The amount we spend on foreign aid is well worth it from a market opening standpoint and probably provides more national benefit dollar for marginal dollar than military spending. I'm all for conditioning grants on reasonable corruption reduction and reform goals though (less so democracy promotion).
Most of what we need to do is limit inflation in education (higher education) and healthcare costs per outcome unit.
Lets have safety nets like welfare and SSI for the poor. But lets not have all encompassing nanny state programs. This is why I don't understand the push for national healthcare. We already cover the old, poor and young. If you are able bodied you need to man up and take responsibility, whether this is for healthcare, insurance or retirement.
And we need to end this idea of retirement. I have zero plans to ever stop work. This concept that you reach and age and then go rock in a chair is detrimental to human beings. People worked until they were physically unable to do so. Think of all the expertise and knowledge we throw out with early retirement, not to mention the expanse and cost of government.
We all have no illusions of ever getting retirement funds from the government and are ok with that. Let's raise the age and slowly phase the program out for everyone but the poor and infirm, exactly who the program was started for in the first place.
Remove deductions. I can't deduct my interest on my student loans and am just fine with it. Remove the mortgage interest deduction, the marriage tax benefit, etc. All these give backs and pet deductions. Gone.
I think this is a good start. It really is amazing how much you could cut and the average person wouldn't even notice anything missing. There obviously countless other things too (FCC, FDA, EPA, farming subsidies, etc.).
You could probably cut at least 100 of these and not notice, while saving some money: www.usa.gov
So.....................am I going to have any $$$ left for wine /women / song?
I agree with everything posted. There was a special in Bloomberg Markets last month on these borderline fraudulent non-profits, such as the American Bureau of Shipbuilding and the US Polo Association (yes, the clothing brand).
Also agree with cutting out the child tax credit, and really subsidies for children in general. There are waiting lists for adoptions. If you can't take care of your kid without government aid, somebody else can (and desperately wants to). This is why I actually support free, publicly funded birth control. It might not be the most libertarian initiative, but the cost savings to society would be huge (like mandating and subsidizing vaccines).
As for welfare fraud, I have examples in my own family. Claiming unprovable, nebulous ailments, shopping for a compliant physician, then submitting SS disability claims. The benefits were more generous than a minimum wage job.
Most of this doesn't even make any sense. The only thing on this list that makes any sense is getting rid of the mortgage interest deduction, but even then it would require 15-30 years to phase out so you don't destroy the value of people's homes in one fell swoop. Getting rid of it in an instant would send the US into a recession just by itself.
How can you tax religious organizations? They are set up just like college athletic departments--they spend what they take in, and what they don't spend is set aside for capital improvements. When you do the final accounting, virtually no religious organizations turn actual profits, just like most athletic departments don't. There's no profit on which the government could levy taxes!
I'm not a huge fan of foreign aid, especially when we send money to more or less terrorist states that use our foreign aid to subsidize their dictators' rich lifestyles or to subsidize anti-American propaganda and terrorism. But foreign aid is, relatively speaking, an extremely cheap way of conducting foreign policy. If you cut defense spending then foreign aid becomes even more important for conducting effective foreign relations. A rounding error in the US budget--$100 million--could make the difference in friendly and profitable relationships or antagonistic and profitless relationships.
Finally, the charitable contribution deduction is one of the few rational deductions! If someone earns $100,000 and gives away $75,000 to charity, but is levied taxes on the full $100,000, that person could end up owing the state his entire paycheck after donating money to charity. Also, it seems pretty smug to suggest that some charities are of less value than others--this is America, and what I do with my money or what you do with your money is my own or your own business. Certainly giving money to an animal rescue is of greater value than pissing away your money to the federal budget, which wastes hundreds of billions of dollars every single year. Who the heck are you to determine what's of value and what's not?
Ummm...a taxpayer. Kinda the point of the whole post. I'm guessing you would make different decisions as to where your tax dollars would be spent if you had the choice.
The question is, who are you to tell me or anyone else that the charity I give my money to is of lesser value than any other charity? If there is fraud among charities than the government should be going after fraud, not disbanding the charitable contribution deduction. There is as much as $100 billion per year of entitlement and welfare waste, fraud and abuse and you're telling me that we should economically discourage giving to charities so that we can piss our money down the drain with the federal budget?
Do you still pay US taxes? Thought you lived in France/eat croissants now. Am I wrong?
'murica.
This is a well thought out answer and spot on. Don't let all these tough guys push you around. Bros around here think that because they pay a few bucks in taxes that they're clutching the steering wheel of the USS Budget, when really they're in a windowless passenger room on the lower deck. Democracy is a myth.
The issue I have with Churches having tax exemption is that there are a number of Churches that take very vocal sides in elections. There were pastors and churches outright backing Romney in the election. You get political, you lose your tax exemption.
Also - god is dead and we're all alone.
Not that I'm against this... BWAHAHAHAHA
Fuck I need a drinkThere were churches outright backing Obama, too. The freaking Red Cross let Obama present a political ad a week before the election on its dime, using the hurricane as a justification. A week before the election! I almost fell out of my chair when I saw that ad run on national TV. Maybe we should just thank God for freedom of speech and for the good that the Red Cross, Salvation Army and religiously affiliated organizations do. We should encourage free speech, not seek to squash it, even if we disagree with the speech.
Again, what tax could you levy against a church? Churches don't run profits. They spend what they take in.
Yeah. That's why the Pope is the 3rd most landed person on the planet. I think they can afford it.
http://www.businessinsider.com/worlds-biggest-landowners-2011-3?op=1
I'm against churches making political statements for either side, period. I'm not seeking to squash speech, simply take away tax exemption when they get political. Especially when they deem to know what their so-called "god" would want in an election. Oh yes, in a universe of billions and billions of stars, that is billions and billions of years old, clearly there is a god that gives a shit about our elections. What a joke.
Also, why stop at thanking religiously affiliated organizations? Why not thank the many non-religious organizations that do good as well? You don't need religion to do good.
Why did no one mention this:
Absolutely no sort of government benefit for Legal Immigrants until they have resided in the country for more than 10 years.
I am an immigrant myself.
While I can see the advantage of this, part of me wouldn't be for this as I respect immigrants. It is what this country was founded with and built upon.
I have more respect for Juan, hanging out at the local Home Depot waiting to be picked up by Ricky Bob for an afternoon of "deck building" only to get paid 6 bucks an hour and half a sandwich than most Americans living in this country and bitching about how unfair everything is when the real issue is they are fucking lazy.
This just hit Drudge. Evidently I'm not the only one who thinks charitable deductions are nonsense:
http://www.washingtonpost.com/politics/white-house-nonprofit-groups-bat…
Of course Obama is against charitable giving. Take a look at charity rates in the USSR. Non existent. The government wants to control all giving out of a desire to control those it gives to.
However
A substantial portion of America's labor as well as its capital has been offshored or is in the country but off the books: the net result being that we don't even formally know the full parameters of our own system. Is the pay fair, unfair, or too generous? I don't think anyone even really knows given that a large percent of our formal system is either off balance sheet or completely unaccounted for.
Given that I'm not on either side, this absurd dynamic is funny to me. Were I a politician, I'd be very worried. Not because I couldn't control it, but because we don't really even know what exists: it's not even possible to really know if one is doing a good job of governing.
From my perspective, this is hilarious.
Did I say people are Communist? In Communist Russia, a place where the state did everything for you, there was nearly zero charitable giving. When the government assumes the roll that society normally takes up, people check out.
Government doesn't help because it cares, it helps because it can acquire power. If you think Obama or anyone else gives a shit about small town America or anyone individually you are nuts. Look at the lock step voting of the welfare and immigrant crowd to the Democrat party. It is isn't charity it is graft.
Nef, I seriously love you. Wherever you live, I shall visit and drinks shall be consumed.
See below:
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