The Myth of Tax Raises

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Күн бұрын

Professor Antony Davies explains the many miss-understandings about Government Debt.
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Myth number one, the government owes $20 trillion. How much is $20 trillion? Suppose you go to Germany, and in Germany, you go to every town. In every town, you visit every store. In every store, you look at every shelf and grab everything that is for sale. The amount of money you spend will not be $20 trillion. If you go to Germany and then to France and you go to every town, and within every town, you go to every store. In every store, you look on every shelf and you buy everything. You still will not have spent $20 trillion. You can go to England and while you’re there, you can go to the North Countries and buy everything that’s for sale, and you still will not have spent $20 trillion. In fact, to spend $20 trillion, you have to go to every country in Europe, visit every town, in every town, go to every store. In every store, look on every shelf and buy everything. And then you will have spent about $20 trillion.
But the myth is that this is how much money the government owes. It turns out that there’s more, called unfunded obligations. Unfunded obligations is money the Federal Government has promised but which it does not and will not have the money to pay. Largely, this consists of promises of retirement and medical benefits. If you would take the present value of all the future promises of retirement and medical benefits the government has made and subtract from that the amount of money that’s in the government’s Social Security and Medicare trust funds, and then subtract from that the amount of money the Federal Government anticipates collecting under the current law from future Social Security and Medicare taxes, you will still have an amount of money left over that the government does not have.
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LEARN MORE:
How Big is the U.S. Debt? (video): A stunning visual representation of the ever-growing amount of debt and unfunded liabilities being accumulated by the federal government, narrated by Prof. Antony Davies.
• How Big is the U.S. De...
How Should Governments Deal With Debt? (video): Nations that spend themselves into debt face very difficult choices. Prof. Steve Davies describes the three main choices that governments have to fix their debt problems.
• How Should Governments...
Debts, Deficits, and Spending Cuts (video): Prof. Jeff Miron of Harvard University explains we should focus on reducing spending, rather than managing the deficit, if we want to reign-in the runaway national debt.
• Debts, Deficits, and S...
TRANSCRIPT:
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Пікірлер: 43

@ripcut28 2 ай бұрын

First rule of economics: there isn't enough to go around to make everyone happy. First rule of politics: ignore the first rule of economics. Policy makers aren't dumb. They understand this. They use taxes as a form of control.

@toiletpaperwarrior 2 ай бұрын

Can we get a chart from all the way back to the pre-income-tax era?

@maximos905 10 күн бұрын

Yes, economists from all over the political spectrum admit that the government typically loses tax revenue when they raise tax rates

@TreDogOfficial Ай бұрын

I'm in favor of a 17% flat tax over the progressive tax system we have today. The tax code is a labyrinth.

@johnc1014 Ай бұрын

I used to be in favor of this. Then I realized how much you can use the federal tax code to your own benefit. Personally, I'm against income tax 100%. I want it completely abolished. But, since that isn't happening, I use real estate to get massive deductions and offset the tax I pay on my W2 income. Last year, my effective tax rate after everything was a little less than 2%. This year, it will probably be in the negative. A flat tax sounds great, in theory. But, then you don't get anything like child tax credits, or the vast deductions from real estate, starting businesses, etc.

@TreDogOfficial 11 күн бұрын

@@johnc1014 tax evasion is very interesting and underreported. A lot of it happens when people write off their small business expenses. I wonder if a flat tax could address that somehow

@johnc1014 11 күн бұрын

@@TreDogOfficial Well, the tax code has all sorts of ways to legally evade federal income tax. I could technically write off more expenses than I'm supposed to, but then I'm in huge trouble if I'm ever audited. I much prefer to just be 100% truthful. I don't get in any trouble and I get plenty of benefits already. With a flat tax, it would simplify things, but it would take away all these benefits. And, corrupt politicians will never do it because their corporate donors benefit so much more from a progressive tax system. I benefit too, just to a much smaller degree. Like I said, I want the federal income tax abolished 100%. But, since we have it, I like the system we have now. Actually, this year, I'm almost guaranteed a negative effective tax rate. I now own 6 rental properties.

@MexicanOREOz 21 күн бұрын

refuse to pay any income tax ladies and gentlemen. why sacrifice you and your families pay to give that slice to the federal government when they have the worst track record of handling money

@trumpetpunk42 11 күн бұрын

Why? To avoid jail...? Sad but true

@ovariantrolley2327 10 күн бұрын

Tax collection in France is about 50 percent. Some European countries its 30. Some countries its less than 10.

@omarg4075 2 ай бұрын

why so much...set to max of 1%

@gangsta8929 2 ай бұрын

Ok so it seems like we could raise taxes on high income earners and shift the tax burden away from low income earners then. Since the total receipts will stay constant. Is that not the point you were trying to make?

@AusFirewing 2 ай бұрын

In another short he shows that isn't the case at all. The only taxes that increase revenue as they're raised are Social Security and Medicare taxes, which fall most heavily on the poor and working.

@gangsta8929 2 ай бұрын

@@AusFirewing yea and that’s what I’m saying. Raising rates on high earners would keep total tax revenue flat. Since high earners would be paying more, that means that people earning less would have to be paying less for total tax to remain constant. That would effectively shift the tax burden from lower income earners to higher income earners.

@AusFirewing 2 ай бұрын

You didn't read what I posted, did you?

@gangsta8929 2 ай бұрын

@@AusFirewing you don’t understand what I’m saying, do you?

@AusFirewing 2 ай бұрын

No, I understand perfectly what you're saying, and it's wrong. A tax rates increase, those who are able shift their economic activity from things that are taxed at a high rate to things that are taxed at a lower rate. This is why total tax revenues as a percentage of GDP remain the same. It also doesn't take into account changes in total GDP, which may in fact decrease as a result of reduced economic activity because of this behaviour. Finally, the people most able to avoid the new higher taxes, as well as the people with the greatest incentive to do so, *are the rich*.

@moose7336 2 ай бұрын

garbage graphs

@gsquared2394 4 күн бұрын

Explain

@moose7336 4 күн бұрын

@@gsquared2394the y-axis is zoomed out to make the changes in its values seem small and insignificant. There is no reason for the data to only take up like 10% of the area of the graph. He also used a pie chart which is....