FY 2015 Budget (Passed)

[Fmr President & Senator Polnut]

Senator TNF? Really? No chance I'm supporting that amendment.

[Fmr President & Senator Polnut]

I'm going to interpret Polnut as objecting to TNF's amendment, so senators a vote is now open on TNF's amendment, please vote aye nay or abstain

I should say, as President I oversaw a reduction in overall military spending. So that's not my concern. My concern is the tax structure. Thinking you can finance the Federal Government by only taxing the wealthy isn't realistic and is not a panacea to all economic ills.

I believe in fair and progressive income taxation - this is not progressive or especially practical. Tax evasion and income/asset shifting would become a growth industry in Atlasia. Didn't think Senator TNF would be supporting increasing the incomes of accountants and tax attorneys.

I said we need to re-examine our tax policy, but this isn't workable or realistic. I'm happy to look at other options for tax reform.

[Fmr President & Senator Polnut]

NAY

[Fmr President & Senator Polnut]

I cannot do anything until I can see what the White House is proposing. If we are going down completely different paths, while some clearly wish to delay for their own sake, I don't want to delay this process based on not actually having a discussion first.

[Fmr President & Senator Polnut]

NAY

[Fmr President & Senator Polnut]

I wish to apologise, my Christmas travel process started earlier than anticipated.

I will not support any measure that contains the tax rates in Senator TNF's amendment. I understand the desire and reaction for those rates, but I see massive perverse outcomes from them.

 

[Fmr President & Senator Polnut]

I will not support this because the tax structure is in need of systemic reform and taxing 60% percent on those making over a million is a non starter with me.

My income tax structure proposal

9,500-20,000 5%
20,001-100,000 10%
100,001-500,000 20%
500,001-5,000,000 30%
5,000,001+ 40 %

Would be helpful if you could provide a workable option, not a personal wish-list

[Fmr President & Senator Polnut]

The vast majority of people making under $100K are doing so through honest means. I see no reason to tax them at exorbitant rates.

For God's sake... therefore everyone earning over $100k is earning through dishonest means? Long story short, this short-sighted view on this issue only creates a massive revenue problem for the future.

[Fmr President & Senator Polnut]

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[Fmr President & Senator Polnut]

This is my Budget proposal. It sees the introduction of new higher-end tax brackets as well as a small expansion of the lowest bracket from 80-85k and a reduction of the rate from 22-20%. I think it addresses the very odd creation of that jump from 41-60% in the brackets which doesn't make a lot of sense. So this creates a much more gentle increase up $10m, from where the 60% tax rate kicks in.

I have also created a new upper bracket of corporate taxes for those corporations who earn above $25m - this is aligned with a small reduction for those smaller businesses, who are the primary employer in Atlasia. With other small excise increases.

On spending, there are small cuts in the military procurement Budget and the deferment of $5m of the Smart Grid spending into the next financial year. There are some adjustments to account for some recent legislative changes. There is a cut in funding for highways, and some of that directed toward high-speed rail, public transport and railways. It contains an increase in international humanitarian aid, with a reduction in foreign military aid.

I have held onto some of the other spending cuts from other Budget proposals as well as some administrative reductions.

I believe this strikes a balance of maintaining strong services, doing so in a responsive and responsible manner and not reducing our capacity in any field, including militarily.

[Fmr President & Senator Polnut]

More or less, yes, and most are made from the Nix budget. The exception would be transportation, which I believe was in my initial basic proposal.

I'm actually supportive of Bore's amendment, and I am happy to see most of the cuts retained. I'm not sure if I am the actual sponsor here since I'm not a Senator, but the amendment is mostly friendly for me.

That said, I would like to see the possibility of increasing the NASA budget (I believe it's far too low if we can to get more ambitious things done in that front), and, if the proposal raises enough revenue, reverting some of minor cuts in the international area. I'm not sure if Bore's proposal actuall raises the Healthcare Payroll tax back to 8%, but if that was the case then the situation may not be as nearly as complicated.

Okay thank you.

I too think that Senator bore's amendments are sensible, and likewise as Senator Polnut, I can not approve of Senator TNF's tax rates. It just makes no sense at all just starting to tax people making more than 100K, we can in no way fund our budget with such a tax structure. (I better not start talking about Senator JCL's proposal)

With all do respect I want to hear what you think about my proposal for a pro-growth tax structure.

I also object to Polnut's amendment in the basis of maintaining a bracket of taxing our wealthiest more than 40%.

With all due respect to you - is there anything you use here except baseless strawmen?

[Fmr President & Senator Polnut]

I must say I actually Bore's proposal is better in some aspects, especially given that our Financial Transaction Tax is already high by OTL standards and increasing it might not be a good idea. Likewise, why does it say that spending is actually increased despite the cuts? Is that a typo?

There are cuts, but the Scott/Duke education stuff spending puts upward pressure on that side of the ledger.

I have no issue is putting the FTT back to 0.50... it's not going to make a lot of difference.

[Fmr President & Senator Polnut]

More or less, yes, and most are made from the Nix budget. The exception would be transportation, which I believe was in my initial basic proposal.

I'm actually supportive of Bore's amendment, and I am happy to see most of the cuts retained. I'm not sure if I am the actual sponsor here since I'm not a Senator, but the amendment is mostly friendly for me.

That said, I would like to see the possibility of increasing the NASA budget (I believe it's far too low if we can to get more ambitious things done in that front), and, if the proposal raises enough revenue, reverting some of minor cuts in the international area. I'm not sure if Bore's proposal actuall raises the Healthcare Payroll tax back to 8%, but if that was the case then the situation may not be as nearly as complicated.

Okay thank you.

I too think that Senator bore's amendments are sensible, and likewise as Senator Polnut, I can not approve of Senator TNF's tax rates. It just makes no sense at all just starting to tax people making more than 100K, we can in no way fund our budget with such a tax structure. (I better not start talking about Senator JCL's proposal)

With all do respect I want to hear what you think about my proposal for a pro-growth tax structure.

I also object to Polnut's amendment in the basis of maintaining a bracket of taxing our wealthiest more than 40%.

With all due respect to you - is there anything you use here except baseless strawmen?

Are you familiar with the Laffer curve?

Indeed - the tax rates you seek will NEVER pass. My plan deals with some of the more extreme applications. I agree that higher and higher taxes deliver diminishing returns, but so do artificially low tax rates.

Our growth rates arent driven by superficial elements like personal income tax rates. Yet another strawman.

[Fmr President & Senator Polnut]

I am concerned about increasing the number of brackets and that it could add to the complexity of the tax code.

Trust me, so was I. But I don't see any other way to make the system more progressive without significant cuts to spending to account for lost revenues.

[Fmr President & Senator Polnut]

Could the 58% bracket at least be gotten rid of since it means having two in the 50's and the highest is just 3% above it?

My concern is not the number of brackets in and of itself, but that the brackets are representative.

[Fmr President & Senator Polnut]

I wanted to lower taxes during my presidency but we just can't afford to do it with all of the programs we have in atlasia.

My tax plan was pretty much dead on arrival, but I mainly introduced it for the debate more than anything. I couldn't let the senate stall on my watch.

And yeah, my education bill didn't help but I felt it implemented some necessary changes.

All in all, I think we are really going to need to change the way we all deal of economic policy, since we had to wait until the budget to see the negatives of programs that looked fantastic and easy to support on paper.

I am concerned about increasing the number of brackets and that it could add to the complexity of the tax code.

Trust me, so was I. But I don't see any other way to make the system more progressive without significant cuts to spending to account for lost revenues.

Well, another alternative comes forward if we are able to get an estimate on the effects of the Health Care Reform (I just couldn't find the right data myself), as one of the arguments we put forward was that it could reduce the high spending that the old system meant. I chose to propose a trillion for Health Care as a very conservative estimate, but it the effects were more positive than originally thought we could reduce enough spending to reduce some of the changes in the tax code. 

Well, I'm not a deficit hawk. I'd be hesitant to reduce tax revenues too deeply at the moment. I just don't want us to get into a structural deficit scenario, where we use spending reductions or newly found resources and the natural instinct is to cut taxes with it.

It's a reasonable idea - but we need structurally stable revenues and demands, if you want to build in a permanent change in the tax code. The changes in my plan won't have significant impacts on the bottom line, plus we need to encourage spending at the lower end of the scale and get more small businesses hiring. If that delivers, then we should get increased revenues. But we can't risk valuable programs because we a) can't have a deficit b) we'd prefer lower taxes.

[Fmr President & Senator Polnut]

How comfortable is everyone with this?

[Fmr President & Senator Polnut]

Yes, I also object. We don't know for sure the demands of the health budget, so I would prefer to over-estimate the amount required, than under-provide. So I'm not quite sure where we got the final health number from.

Plus, there are very very few who would be impacted by a 0.25% increase in the FTT.

Most people are not going to be flying about with massive stock purchases. Let's say a regular person makes a stock purchase of $15,000 worth of stock.

0.5% = $75
0.75% = $112.50

I understand the President is concerned about a deficit... but we still have unemployment (particularly under-employment) that's too high, inflation is above wage-growth (therefore a drop in real earnings)... the Government needs to be able to do what it does best. I'm happy to pursue a surplus, as we had before, but I'm not going to take risks with the health and welfare of the Atlasian people to do it.

[Fmr President & Senator Polnut]

NAY

[Fmr President & Senator Polnut]

Well, I would like to propose another amendment that most of the Senate can support, so I ask again:

What type of cuts could you support when it comes to health care spending? And, what tax cuts would you be willing to consider and for which brackets?

I think we need to know what cuts in the health area could be expected due to other circumstances.

In relation to tax cuts - my proposal does give a small cut to those on lower incomes and small businesses (personally I think the $35k threshold is way too high, considering what average wages are but that's done and dusted). I also created a more graduated and progressive set of brackets up to the highest level. There might be some effective cuts, but considering such a small proportion of Atlasian are in those brackets, the impact on revenue would very slight.

But Senator Lief does raise the issue of inflation. I don't see cuts in here, that are inflationary. If we were talking about cutting the lowest two brackets (where a huge proportion of the population sit) by 5-10% and you have a flood of new liquidity in the market - that would absolutely place upward pressure on inflation. Very minor cuts along the brackets I doubt would have much impact at all.

My chief concern is that with wage growth being outstripped by inflation, we are getting into a wage deficit situation, so wages in real terms are dropping. The only issue in relation to our inflation rate... I'm not quite sure why our inflation rate is so high, it's not being triggered by high economic growth nor by pricing demands...

Some context and justification for these rates, when in our situation, you'd probably expect lower inflation ... rather than higher, would be useful.

[Fmr President & Senator Polnut]

My position is clear - our priority should be to get this thing passed.

I believe my proposal addresses issues of increasing the progressive nature of the tax code - and eliminating unnecessary jumps in taxes. Considering the proportion of people who fall under those higher brackets, the revenue changes should be minor. I do believe we should continue with a small tax cut for the lowest income bracket to enable greater liquidity and a small cut for the smallest business covered to give them more capacity to hire.

But I couldn't support deeper tax cuts, when we're also talking about cutting health funding... without being sure of what might be needed. If it comes down to maintaining current tax rates over a reduction in funding for essential services, I know which side I'll be taking.

It is too late for broad tax reform in this cycle.

[Fmr President & Senator Polnut]

I won't support this amendment

[Fmr President & Senator Polnut]

NAY

[Fmr President & Senator Polnut]

I'm going to suggest we suspend debate until we get an idea of revenue.

[Fmr President & Senator Polnut]

And I was afraid you would finish without me.

You know better than that.

On topic - if we don't get numbers on revenue by early next week - we're going to have to act without them.