patrick.net

Paralithodes says

LOL.. Another tatupo tautology... It's all "debatable" but thanks for the valuable observation.

Just pointing out that much of what you pretend is fact, is actually your (very suspect) opinion.

The GOP tax plan would help the wealthy, just like all previous GOP tax plans.

tatupu70 says

The GOP tax plan would help the wealthy, just like all previous GOP tax plans.

Given your unstated premise - specifically, that it would help the wealthy at the direct expense of all others ....

lol--that is highly debatable...

Paralithodes says

Given your unstated premise - specifically, that it would help the wealthy at the direct expense of all others ....

lol--that is highly debatable...

Please read below, math of Camp's plan. I posted this in February:

Is the plan revenue neutral? Details are emerging, but the answer cannot be "yes" while cutting tax rates at the top unless taxes are increased elsewhere.

Elimination of write off from State and local taxes while doubling the standard deduction to $22,000? This effectively removes the mortgage interest deduction as well.

Very few other itemized deductions large enough besides taxes paid and mortgage, therefore mortgage interest would have to exceed at least $15-17k to exceed the standard deduction. (assuming at most 5-7k in other itemized deductions)

At 4%, that means a mortgage balance of $375k. At 80% LTV, home value would be ~$470k. About twice the median home.

Effective capital gains tax rate increase from 23.8% to 24.8% for ultra-rich? Yawn. This will most likely be offset by the reduction in their ordinary income rate from 39.6% to 25%.

i.e. if 90% of your income is taxed 1% higher but 10% of your income is taxed 14.6% lower, .9% increase offset by 1.46% decrease. In order to pay more under this plan, the "mix" of income must be greater than about 93.5% capital gains and 6.5% ordinary income.

Anytime you see a reduction in the EIC, you know who is going to have an increased tax burden. With the EIC the working poor have an effective negative tax rate. You could make the standard deduction $100k, but you are never going to get a negative tax rate through deductions.

Lets look at a median income family of 4. $55k income, $100k mortgage balance, 6% state income tax rate, 1.5% property tax rate.

Under Camp's plan, this family would have standard deduction of $22k, taxable income of $33k and a tax rate of 10%, so taxes due $3300, less 2*$1500 child tax credits, taxes of $300.

Currently, this family has 4*personal exemptions ($3900) = $15,600. They have $4k in mortgage interest, $1.7k in property taxes, and $3600 in state income taxes. They take the standard deduction of $12,200 since it is greater. So $55k - $15.6k - $12.2k = $27,200 in taxable income. They pay $1,785 plus 15% of (27,200-17,850) = 1402+1785. Total 3187 less $2k in child tax credits, taxes of $1187. Plus they get EIC of $4455. This median family would get a refund of $3268.

Current law, they have net tax rate of -5.9%. Camp's plan would have a median income family of 4 PAY .5%. Effectively, the tax rate for a median income family of 4 would increase 6.4%.

control point says

Please read below, math of Camp's plan. I posted this in February:

I've read several different things, going back a few years. Some arguments against plans such as this either made specific but unfounded assumptions, or ignored other items ... according to other things I've read. Camp's plan has not been the only plan, and will not be the only plan ever proposed.

Conceptually, is it better to have a more simple tax system with fewer deductions than one with all sorts of special deductions that can be easily prone to manipulation for special interests? That's what some support.

Meanwhile... Getting rid of the mortgage interest deduction? Great idea!

Paralithodes says

I've read several different things, going back a few years. Some arguments against plans such as this either made specific but unfounded assumptions, or ignored other items ... according to other things I've read. Camp's plan has not been the only plan, and will not be the only plan ever proposed.

Camp's plan specifically:

1. Eliminated the EIC

Since I can assure you under current law, a median family of 4 with median income of $55k will get a refund due to the EIC, and it is not possible to get a refund under Camp's plan since it does not have and EIC, their taxes are going up. The only way to get a refund under his plan to have more children, which would give them a refund of $1500 per child.

Under the EIC, the refund would grow too.

All I am saying is the details released by Camp's camp on this specific plan, for this specific median income family of 4, would increase their taxes.

Meanwhile, a single capitalist that derives his income 90% from investments and 10% from working - his taxes would go down.

This is an indisputable fact. Respond to it or retract your "simplifying the tax system would impact the wealthy more than anyone else" statement.

Come up with any example of tax system simplification that would benefit the poor at the expense of the wealthy.

control point says

Camp's plan specifically

Camp's plan, specifically, is Camp's plan specifically. There may be parts of it that I may agree with, and parts of it that I may agree with you on, upon further inspection. There may be other plans worth considering as well, as there have been over the years. If you want to get into a discussion about all of the details of one specific plan at one specific point in time, which has zero probability of passing anytime soon, and like all legislation would likely look different at the end anyway even if it could come close to passing, then start a different thread.

Otherwise, discussion of the details of one particular, imperfect proposal among many over time does not invalidate the concept of a more simplified scheme with fewer deductions. Nor does discussion of Camp's plan in particular mean that any cuts in taxes to the wealthy, in any case, always come at the expense of the poor.

Paralithodes says

Nor does discussion of Camp's plan in particular mean that any cuts in taxes to the wealthy, in any case, always come at the expense of the poor

If a plan is revenue neutral, and if you cut taxes on the wealthy - by math, the equalization must come from the "not wealthy."

Paralithodes says

Otherwise, discussion of the details of one particular, imperfect proposal among many over time does not invalidate the concept of a more simplified scheme with fewer deductions.

Fair. So give me an example of one simplified plan, that is revenue neutral, that will increase the tax burden on the wealthy by lowering taxes on the not wealthy.

But the "expand the base" Romney camp is always shifting burden from the wealthy to the not wealthy.

Like I said, give an example or retract your statement.

control point says

If a plan is revenue neutral, and if you cut taxes on the wealthy - by math, the equalization must come from the "not wealthy."

IF a plan is revenue neutral And IF you cut taxes on the wealthy... Both assumptions that *I* didn't argue. On the contrary, I said:

Paralithodes says

lower the marginal rates while eliminating many dedictions, that in the end, would impact the wealthy more than anyone else...

Instead of retract, I restate, because I should have been more clear: "impact the wealthy more than anyone else.." was refering to deductions. In other words, a plan by which the the net result was the "wealthy" as a group were paying a similar proportion as they are paying now (some of them would pay more). YES, there are Republicans who have proposed this very concept. The news media tried to call them on this, accusing them of calling for raising taxes. THAT is indisputable.

control point says

This is an indisputable fact. Respond to it or retract your "simplifying the tax system would impact the wealthy more than anyone else" statement.

Retract your misquoting of my statement, in which you - for whatever reasons - remove my entire clause about deductions. If you are going to quote someone yet leave out part of what they write, using a "..." would be a more honest approach than directly misquoting them. You may have an indisputable fact about the Camp plan - I don't know enough to dispute your fact about that specific plan. I'm not interested in discussing that specific plan.

control point says

Like I said, give an example or retract your statement.

No, you said to respond to your indisputable fact about a specific plan, or retract my statement. You did not say, give an example of a different plan, or retract my statement. First an intentional misquote, and then changing your demands... Want a specific debate about specific details of specific plans? Start another thread for those interested.

Meanwhile, why do you prefer high rates, with lots of special deductables and carveouts? Why do you prefer things to be more complicated? For better political manipulation and control by your side, or some other reason?

That's why we need tea party, get rid of most big government out there.

zzyzzx says

A plurality of voters think Barack Obama is the worst president since World War II

That should read:

"A plurality of voters think Barack Obama is the most recent president since World War II"

Republicans have ALWAYS been the "business" party, and by that I mean big business - small business doesn't exist for them because they don't make bribes, er, campaign contributions. They will ALWAYS propose tax increases on the working class and a tax reduction on their pals' billion-dollar incomes.

Democrats aren't much better, but they do some things for the working class such as the ACA, that will be remembered, when all the failed foreign policy of empire is forgotten.

indigenous says

The point is that as the tax rate is lowered the government revenue is increased.

Ok Barney?

Tax revenue has been between 30% and 34% of GDP since 1980. Where is the point that it increased at? Let's see, Reagan tax cuts, drop from 33% to 30% then slowly growing back to 32% over 12 years. Clinton tax increase raise from 32% to 34%. Bush tax cut, drop from 34% to 30% then bounce to 33% with the housing boom then down to 28% with the crash. Slowly rising back to 33% over the next 6 years.

Yep those tax cuts sure made the money roll in. Do you ever read anything other than standard republican dogma?

bob2356 says

Yep those tax cuts sure made the money roll in. Do you ever read anything other than standard republican dogma?

Go fetch some real numbers not a percentage of a growing GDP.

bob2356 says

Yep those tax cuts sure made the money roll in. Do you ever read anything other than standard republican dogma?

Ignore list should be a pretty high bar, but "supply sider" is a shit-colored stain on the wall well above that bar.

sbh says

But, but, but there's this 700 page book.

Listen hear you illiterate tree fucker. I'm not a Republican. I have done my due diligence on this subject. It is a known and accepted fact that lower taxes increases revenue. If nothing else when the highest marginal tax rate is 70% people are going to spend more time avoiding or evading them. But the real reason is that the money gets invested into the business. That is the ONE driving factor in business growth which occurs in small business.

sbh says

The ignore function is a marvelous thing. I can almost hear the village indigiot clawing at the door......almost.

My ignore number is still at 7, try again.

indigenous says

bob2356 says

Yep those tax cuts sure made the money roll in. Do you ever read anything other than standard republican dogma?

Go fetch some real numbers not a percentage of a growing GDP.

So ignoring growing population and inflation is your idea of real numbers? Perfect. You just can't make this stuff up.

indigenous says

It is a known and accepted fact that lower taxes increases revenue.

So zero tax rate will result in infinite revenue? Why don't governments understand such simple logic?

indigenous says

If nothing else when the highest marginal tax rate is 70% people are going to spend more time avoiding or evading them. But the real reason is that the money gets invested into the business. That is the ONE driving factor in business growth which occurs in small business.

You are saying there was no business growth in the 1950's and 1960's? That's an interesting concept.

People that were in the 70 or 90% tax bracket were not small business people. Small business is defined as having gross receipts of 7 million or less a year. Those tax brackets started at what would be 4 million dollars in today's money. No one pulls 4 million out of a 7 million gross. So that comment makes zero sense.

The easiest way to avoid taxes pre reagan rewriting of the tax code was to reinvest the money you earned in highest tax brackets. That's exactly what people and businesses did. Read flying high some time. It's a history of boeing. The only reason the 747 and 737 exist is reinvestment of top rate income in high profit years rather than distributing it as profits and paying taxes. I wonder how boeing would be doing today without those 2 planes.

If reagan lowering the taxe rates is so great then why has so much of the income moved to the upper couple % since 1980? Where is the trickle down? You remember trickle down don't you? The concept david stockman sold to congress? The same david stockman who wrote the 700 page book. I remember seeing stockman pitching trickle down on news/talk shows and thinking that the concept made no sense at all.

bob2356 says

You are saying there was no business growth in the 1950's and 1960's? That's an interesting concept.

No, the less money wasted on government, is more money available to invest in small business. Where do get the idea that the investment has to come from the owner of the small business?

bob2356 says

The only reason the 747 and 737 exist is reinvestment of top rate income in high profit years rather than distributing it as profits and paying taxes.

Ok?, I wonder where they would be without the Export-Import bank?

The thing that creates jobs is reinvestment in small business, Not Boeing, this would be less likely to occur if they have to pay 70-90% taxes before they invest the money.

bob2356 says

If reagan lowering the taxe rates is so great then why has so much of the income moved to the upper couple % since 1980?

According to your Pikkety (recently) and the Austrians for at least a few decades the reason is INFLATION. Those who invest reap the lion's share of the rewards from investing as inflation is not even.

bob2356 says

Where is the trickle down?

Trickle down was a name some media mutt came up with. But the idea of lowering taxes increasing economic activity is sound, Stockman was 100% correct.

bob2356 says

So ignoring growing population and inflation is your idea of real numbers? Perfect. You just can't make this stuff up.

But it is ok to use to demonstrate your point? in years when we had double digit inflation.

bob2356 says

So zero tax rate will result in infinite revenue? Why don't governments understand such simple logic?

Is that your use of logic? (cold weather results in more gun crime) It is also a known fact that the maximum revenue a government can collect is around 19% so the higher tax rate thing is a canard, something that evades the CBO.

I think the core problem with the economy is the effects of mercantilism caused by going off of the gold standard combined with Friedman's idea of targeting the US to have 3% inflation.

This has allowed war to be financed with borrowed money through Bush and Obama.

This also allowed the Fed to be oblivious to effects of China and Japan devaluing their currency to pull commerce to their countries and manufacturing to be off-shored.

It has allowed investment to go offshore. Which is the main reason for the dearth of jobs in the US.

It is also the reason the standard of living has gone down in the US because as the money is devalued the purchasing power of the avg Joe goes down.

bob2356 says

So zero tax rate will result in infinite revenue? Why don't governments understand such simple logic?

The logic that defies even Laffer!

bob2356 says

If reagan lowering the taxe rates is so great

I was looking at new job growth . . . the 1970s were actually a pretty damn expansive era

http://research.stlouisfed.org/fred2/graph/?g=F2o

shows sustained 3-5% YOY job growth for most of Carter's time.

Clinton's good times was 2.5% and with both Bush II and Obama 2% is the best we can ask for.

This is of course thanks to the influx of both boomers and women into the workforce, 1975-1995, but whatever changes we did to the economy in the 1980s we didn't fix it!

Well they did, but they didn't improve our macro situation for "the 99%".

Conservatives talking about tax revenues in the 80s is a shell-game of correlation vs. causation.

Theoretically, 20-30% of whatever gov't spends comes right back to them via income taxes.

http://research.stlouisfed.org/fred2/graph/?g=F2r

shows Federal receipts rose 50% under Reagan.

BUT SPENDING DOUBLED!

http://research.stlouisfed.org/fred2/graph/?g=F2s

Also, we started leveraging up seriously after Volcker threw in the towel on austerity in 1983:

http://research.stlouisfed.org/fred2/graph/?g=CV9

These are causative, not just correlations, LOL

GOP does this same shell game with the Bush tax cuts, assigning them the credit for the 2004-2007 expansion, when it was really the mother of all credit bubbles along with Bush's unrestrained Keynesian spending (at its most useless, unfortunately).

Bush was given a $2T budget in 2000 and pushed it up to $3T+ by 2008, half of that expansion being war and the national security state.

Thanks, Ralph!

indigenous says

Not Boeing, this would be less likely to occur if they have to pay 70-90% taxes before they invest the money.

Money invested in the business is tax free. Only profits are taxed. Profit by definition is income taken out of the company.

Regardless of size.

Bellingham Bill says

shows sustained 3-5% YOY job growth for most of Carter's time.

It is true Reagan doubled spending (don't forget Tip O'Neil) so it is hard to separate the effects of increased spending.

How do you reconcile your graph with this one? Reagan supporters will say the tax cuts produced a boom until the mid 90s.

Bellingham Bill says

Theoretically, 20-30% of whatever gov't spends comes right back to them via income taxes.

20-30% of what? If you hire an individual who does nothing productive it is 20-30% of nothing, it just dilutes the value of money.

indigenous says

Seems to me, the 3% compounded over 43 years would be over 250%

Well, 209% anyway.

indigenous says

Or if I look at an inflation calculator from 1971 to today it would 587%

Jan 1971, CPI 39.8
May 2014, CPI 237.9

597%. Or roughly 4.2% annually. Or since 1981, which is 274% or 2.96% annually.

control point says

Money invested in the business is tax free. Only profits are taxed. Profit by definition is income taken out of the company.

Regardless of size.

Curious about a response to this one, indige.

control point says

control point says

Money invested in the business is tax free. Only profits are taxed. Profit by definition is income taken out of the company.

Regardless of size.

Curious about a response to this one, indige.

Bob is assuming the investment comes from the owners of the company. Small companies by definition (more or less) don't have any money therefore have to get investment from outside sources.

indigenous says

How do you reconcile your graph with this one? Reagan supporters will say the tax cuts produced a boom until the mid 90s.

Reagan supporters say a lot of stupid stuff, like "Deficits don't matter", "A tree is a tree, how many do you need to look at" (wait, that was St Reagan himself).

I already showed major dynamics that gave us economic tailwinds in the latter half of the 80s -- Volcker finally allowing the baby boom to borrow

http://research.stlouisfed.org/fred2/graph/?g=F4i

and government spending doubling (more about that later).

Also, imports from China and Mexico were $24B in 1985, $45B in 1990, $105B in 1995, $235B in 2000, $410B in 2005.

This was an immense transformation of our economy; certain sectors got hit hard:

http://research.stlouisfed.org/fred2/graph/?g=F4b

shows mfg employment has fallen from 14% of the potential workforce in 1980 to 6% today.

but everyone else benefited from the cheap imports and rise of big-box retailing, which also drove prices down as Walmart, Home Depot, etc transformed how things were sold in America.

Speaking of lower prices, gasoline falling 50% in real terms 1980-2000:

http://research.stlouisfed.org/fred2/graph/?g=F4e

was another nice tailwind for the 80s ~ 90s economy.

Another surge factor was simple demographics. The baby boom was age 16-34 in 1980 and by 2000 they had finished flooding into the workforce.

As for government spending being wasteful, my point was government taxes incomes, so if it spends $2T, $200B to $600B is going to come right back to it in the form of income taxes. Gov't spending never disappears into a black hole, unless the GOP has control over it, then it might . . .

And as for waste, you really need to start understanding the demand-side argument, and how if the paycheck -- aka "Joe Sixpack" -- economy doesn't have money, capitalists are fucked since without customers, there can be no profit.

I'm no great economic scholar, but I gather this was Keynes' point -- it's better to get people cashing paychecks even if the work they do is not particularly wealth-accreting, rather than wait on the blessed Invisible Hand / Job Fairy to come and start distributing jobs to people, since that doesn't actually happen here in the real world.

Reagan didn't invent the PC or windowing mouse-driven GUI, and that was a major driver of growth 1985-1995, too.

Bill

Yup a lot of moving parts. One has to determine which one are important and which aren't.

I don't know how you determine how much of off shoring was good and how much was bad. On one hand you have cheaper prices for consumers on the other you have jobs disappearing. On one hand you have automation increasing production on the other you have big time inflation since 1971. etc etc

To me the true north on this subject is real value. ANYTIME you deviate you have trouble.The usual reason for deviation is hubris and justifying some government mutts job and some cronies' profit. This is ALL conducted through the threat of force.

If Nixon had not perverted our money if Friedman had not further perverted our money with the floating exchange rate.

I don't China or Japan would have been able to offshore as much as they have.

The Amercan worker would not have become as expensive as he had.

Consumers would have had extra money to invest. People characterize the consumer as some dumb slob. Michael Pettis goes over this in his book, culture is controlled by the exchange rate of that countries money. Chinese are not necessarily frugal but have to be because the Yuan has been devalued. The US dollar is worth 20% of it's value since 1971.This leaves little left over for investment for the avg consumer in the US.

Consequently the dearth of investment has created a dearth of jobs.

http://slackwire.blogspot.com/2013/01/what-is-business-borrowing-for.html

http://research.stlouisfed.org/fred2/graph/?g=F4P

Real per-capita trade imbalance.

Half of that is energy

Housing and health care has risen $10,000 per capita while the trade deficit in mfg goods has risen $1,500 maybe.

And what economics refuses to understand is all the savings we've gotten offshoring to cheap-labor economies has been plowed directly into higher prices -- economic rents -- in housing and health care.

We're awash in consumer goods -- capitalism has solved that problem now -- but we've got immense shortages in health care and housing to deal with now.

And these are the tough problems, since it's always politically easy to shaft a minority like factory workers, but people who've "got theirs" in housing and health care are very very powerful lobbies, both on the provider side and the consumer side.

control point says

Only profits are taxed. Profit by definition is income taken out of the company.

Yes only profits are taxed and typically paid at a low rate. C corp tax liability can be manipulated so that even with substantial profits companies can pay at a very low rate or no taxes at all. It really isn’t that difficult given the current tax laws.

But regarding profits being income taken out of a company this is not necessarily true. Retained earnings are profits retained in a company and can be used for many things from nothing sitting in a bank account to working capital, capital expenditures, special dividends, stock buy backs and so forth. Some of these are deductible or depreciable items that can be used to claw back any taxes paid in previous years, because if you pay taxes in one tax year as a C Corp if you loose money even if on paper you can recapture the taxes you paid in previous years. I believe you can go back 3 years (not positive on the number of years as I disolved my C corp in 2005). A good accounting firm is a necessity for any C corp. Life is good as a corporation.

bob2356 says

So zero tax rate will result in infinite revenue? Why don't governments understand such simple logic?

Good point: It's pretty silly to think that zero tax rates will result in infinite revenue. You don't have to explain much more than above to dispute your own strawman, argued by almost no one. But since there are people in this forum who have actually suggested tax rates near 100%, I can see how you'd immediately assume the extreme....

bob2356 says

If reagan lowering the taxe rates is so great then why has so much of the income moved to the upper couple % since 1980?

What happens if one factors in changes to corporate structures, e.g., LLCs? If LLCs did not exist as a corporate & tax structure, and all those profits were recognized in corporate statements vs. owner individual income taxes, would the numbers appear any different?

Bellingham Bill says

Reagan supporters say a lot of stupid stuff, like "Deficits don't matter",

They mattered then, but not anymore?

Paralithodes says

What happens if one factors in changes to corporate structures, e.g., LLCs? If LLCs did not exist as a corporate & tax structure, and all those profits were recognized in corporate statements vs. owner individual income taxes, would the numbers appear any different?

One of the big factors is flow through taxation in the Regan era. The Libs yammer about how much the upper quintile's income went up. What they fail to realize is that tax law changes allowed for lower taxes to be paid as individuals. So it appeared like their income went up even though it hadn't changed at all. It was just reported as a subchapter S instead of a C corp.

Paralithodes says

If LLCs did not exist as a corporate & tax structure,

LLC's are not taxed at corporate rates typically they are taxed like partnerships; there is no double taxation. Distributions to the owners are not taxed but profits flow through to the various owners and they pay at the their individual rates. In real estate and some other types of LLC's one can generate substantial cash flow for the owners (often called members) but because of depreciation show little profit or a tax loss, thus creating tax free income for the members. As the name implies they exist to limit the personal liability of the owners without incurring any of the "potential" double taxation of a C corp. Life can be good as an LLC.

Paralithodes says

They mattered then, but not anymore?

Deficits 2003-2010 push our monetary regime into ZIRP.

I'm not a big fan of big deficits, but I understand why we need Big Government recirculating $6T/yr:

http://research.stlouisfed.org/fred2/series/W068RCQ027SBEA

to keep the wheels on this cart.

We ~could~ theoretically cut defense 50%, eliminate Medicaid entirely (cash or F- YOU)

http://research.stlouisfed.org/fred2/graph/?g=FkO

but this specific spending is now 5% of GDP alone and its loss would obliterate many local economies dependent on Uncle Sugar, not to mention all the well-paid health-care jobs dependent on gov't subsidies:

http://research.stlouisfed.org/fred2/graph/?g=FkQ

% workforce doing healthcare

At this point though, as far as deficits go we're kinda like at 1993, we've put austerity into place and if we maintain the status quo we can probably ride out some growth to get our debt-to-GDP looking better by 2020.

http://research.stlouisfed.org/fred2/series/GFDEGDQ188S

shows the 2008-2012 excursion was 3X that of 1990-1994

So the deficit did matter in 2001 when Cheney wanted his tax cuts -- the Bush tax cuts just went into inflation in housing, health care, and energy, since these are the heavy-hitters of rent-seeking.

Now, however, what's done is done. I'd like to see higher taxes on the top 10% to bring down deficit spending more, but we've got a whole party against that now, and corporate america and "the 1%" have funded a well-oiled propaganda web to keep enough of the electorate bamboozled, unaware of the reality.

Over the TTM the deficit has been ~$600B.

Top 10% paid $700B in taxes, asking another $300B from them would put their tax rate up to 26% from 19%.

The other $300B could come from http://research.stlouisfed.org/fred2/series/CP/

of course

Dirty liberals will be sorry when the Bush tax cuts start to work, in a couple of years.

Obamacare has already failed, but it's still to early to know about those tax cuts!

Bellingham Bill says

Now, however, what's done is done. I'd like to see higher taxes on the top 10% to bring down deficit spending more, but we've got a whole party against that now, and corporate america and "the 1%" have funded a well-oiled propaganda web to keep enough of the electorate bamboozled, unaware of the reality.

I agree with this wholeheartedly. But in order for any kind of tax reform happens there needs to be a few steps taken as well as a different tonal quality developed to reset the conversation.

As it is now the situation with taxation has become too politicized with one party taking a sort of Robin Hood stance with regards to higher taxes for the wealthy while the other party has taken the stance that any rise in taxes period is unacceptable while at the same time not coming up with any means in which to collect future taxation.

This is a purely economic problem. One idea I've thought of goes back to what FDR did during the first days of the depression. The immediate result of the crash was a run on the banks. FDR had the banks take a holiday and then that same evening came on the radio and explained in lamen's terms how the banking system worked in an effort to get people to stop pulling their cash. This worked fairly well. These would later be known as FDR's fireside chats.

That same sort of totally frank and to the point discussion about taxes and what they are used for needs to be had. Explain how things are paid for. Then show a chart or charts of where the nation's wealth is divided amongst the classes and then show the potential for future income if those charts were more normalized and adjusted.

But basically people need to become more educated about taxes in general. Its totally unrealistic to continue on with the expectations people have with regard to even basic needs and public institutions without even considering a conversation about taxes and its usage.