Apple could face huge tax bill as Obama calls for new taxes on offshore profits in FY2016 budget

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  • Reply 201 of 203
    Quote:
    Originally Posted by plovell View Post

     

    While this is true, it is only one part of the story.

     

    If revenue is fixed, the problem is spending.

     

    If spending is fixed, the problem is revenue.

     

    The crux of the issue is that "the problem" is when spending AND revenue are too far out of line with one another. It's neither SOLELY spending nor SOLELY revenue. We can discuss which should change, or both, and by how much. But to assert that spending is the problem is oversimplifying the issue.




    Read the Stockman interview. He argues that the Bush tax cuts should have lapsed simply because (as you mention) spending and revenue are drastically out of line. However, he doesn't believe the US government 'isn't spending enough', which is an argument that will only extend and deepen the debt. There are fewer taxpayers now and the number will only be decreasing as the Boomer generation continues to retire, draw on their pensions and unfunded entitlements and eventually die off. This will be a 20+ year process and the smaller succeeding generations will be stuck with all of those bills.

  • Reply 202 of 203
    plovellplovell Posts: 801member
    Quote:

    Originally Posted by SpamSandwich View Post

     
    Quote:
    Originally Posted by plovell View Post

     

    While this is true, it is only one part of the story.

     

    If revenue is fixed, the problem is spending.

     

    If spending is fixed, the problem is revenue.

     

    The crux of the issue is that "the problem" is when spending AND revenue are too far out of line with one another. It's neither SOLELY spending nor SOLELY revenue. We can discuss which should change, or both, and by how much. But to assert that spending is the problem is oversimplifying the issue.




    Read the Stockman interview. He argues that the Bush tax cuts should have lapsed simply because (as you mention) spending and revenue are drastically out of line. However, he doesn't believe the US government 'isn't spending enough', which is an argument that will only extend and deepen the debt.


    True - he accepts the choices (made by politicians and the populace) about spending, and highlights the mismatch. 

     

    At the time, in 2010, it was about as bad as it could be ($1.5T) with bailouts and fiscal stimulus and all. It's a lot lower now, about a third of that, I think.

     

    Quote:

    There are fewer taxpayers now and the number will only be decreasing as the Boomer generation continues to retire, draw on their pensions and unfunded entitlements and eventually die off. This will be a 20+ year process and the smaller succeeding generations will be stuck with all of those bills.


    This is the part where you lost me. The population in the U.S. is still growing at a reasonable rate, unlike that of other countries. It's true that there's a "boom" from the post-war years but I don't think that the number of taxpayers is going down. Maybe, but I don't think so. If you have a reference I'd love to see it because there are many other things that hinge on it. I'm not being sarcastic here - if the number really is going down that would good to know. Possibly you were saying that the proportion of taxpayers is decreasing? That's much more plausible and would not be a surprise. The "boomer bulge" will work its way through the system and there will be a bit more of a steady state. As you say, 20+ years.

     

    The population issue is one I hesitate to raise because it is so intensely political these days. The U.S. population is increasing at a better rate than that of [most of] Europe or Japan, and part of that increase is due to immigration, both "documented" and "undocumented". Setting aside for now the issues regarding "illegal immigration", population growth as a whole is needed for economic growth so there will be a growing pool of workers. Of course there are concerns about employment levels and wages but, without population growth, those won't expand the economy.

     

    A second issue is one that I'll only touch upon because I'm not an economist and don't want to venture into perilous waters. And that's the nature of debt. There's a fundamental difference between government debt and personal/corporate debt. The latter is something we owe and, except for processes such as bankruptcy, doesn't go away. It must be repaid. On the other hand, debt for a country/government which creates its own currency is fundamentally different. In that case, the value of the currency changes to account for the "worth" of the debt. This is why countries such as Greece, Spain and Italy are having their present troubles. They no longer have their own currencies but use Euros instead and therefore this mechanism is no longer available to them. The fact that other countries are willing, even clamoring, to buy U.S. Government securities at next-to-zero yield says that the economy is strong and the the debt is not a problem. If the U.S. debt were a problem then the yield on securities would have to be a lot higher, as it is in Greece, to entice buyers for Government securities.

  • Reply 203 of 203
    plovell wrote: »
    True - he accepts the choices (made by politicians and the populace) about spending, and highlights the mismatch. 

    At the time, in 2010, it was about as bad as it could be ($1.5T) with bailouts and fiscal stimulus and all. It's a lot lower now, about a third of that, I think.

    This is the part where you lost me. The population in the U.S. is still growing at a reasonable rate, unlike that of other countries. It's true that there's a "boom" from the post-war years but I don't think that the number of taxpayers is going down. Maybe, but I don't think so. If you have a reference I'd love to see it because there are many other things that hinge on it. I'm not being sarcastic here - if the number really is going down that would good to know. Possibly you were saying that the proportion of taxpayers is decreasing? That's much more plausible and would not be a surprise. The "boomer bulge" will work its way through the system and there will be a bit more of a steady state. As you say, 20+ years.

    The population issue is one I hesitate to raise because it is so intensely political these days. The U.S. population is increasing at a better rate than that of [most of] Europe or Japan, and part of that increase is due to immigration, both "documented" and "undocumented". Setting aside for now the issues regarding "illegal immigration", population growth as a whole is needed for economic growth so there will be a growing pool of workers. Of course there are concerns about employment levels and wages but, without population growth, those won't expand the economy.

    A second issue is one that I'll only touch upon because I'm not an economist and don't want to venture into perilous waters. And that's the nature of debt. There's a fundamental difference between government debt and personal/corporate debt. The latter is something we owe and, except for processes such as bankruptcy, doesn't go away. It must be repaid. On the other hand, debt for a country/government which creates its own currency is fundamentally different. In that case, the value of the currency changes to account for the "worth" of the debt. This is why countries such as Greece, Spain and Italy are having their present troubles. They no longer have their own currencies but use Euros instead and therefore this mechanism is no longer available to them. The fact that other countries are willing, even clamoring, to buy U.S. Government securities at next-to-zero yield says that the economy is strong and the the debt is not a problem. If the U.S. debt were a problem then the yield on securities would have to be a lot higher, as it is in Greece, to entice buyers for Government securities.

    http://www.businessinsider.com/us-demographic-changes-2014-4

    I'll find more.
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