Thread: I don't understand how this works

Florida's new governor is planning on fixing the budget by cutting costs by $5 billion and lowering taxes by $4 billion.

Maybe it's just me, but I don't see how this strategy gets you out of the hole.

In his first budget proposal, Gov. Rick Scott (R) called Monday for cutting more than $5 billion from state spending while also slashing taxes.

Much of the savings - nearly $4 billion over two years - would come through overhauling Medicaid, the health insurance program for poor people. Scott, a former health-care executive, also called for saving $2.8 billion over two years by revamping Florida's state pension system.

And he proposed cutting taxes by more than $4 billion over two years. This would include a roll-back of corporate income taxes from 5 percent to 3.5 percent and reductions in property taxes.

Florida faces a deficit of nearly $4 billion.

To add to the problems they already have, they've got 12% unemployment already.

Critics of Scott's budget plan said it would cut nearly 9,000 positions from state payrolls and slash billions of dollars from spending on education.

*snip*

Florida's unemployment rate in December remained at 12 percent, compared with an adjusted national figure in December of 9.4 percent, and requires high spending on jobless benefits while hurting sales taxes and other government revenue.

Also:

The current fiscal 2011 budget totals $70 billion, including about $23 billion of general revenue spending, and was helped by federal stimulus funds that are running out.

I'm not seeing this working.

Fla. governor plans Medicaid changes as he seeks to cut taxes and spending

It doesn't. It's all a farce for ignorant people to think he is doing something. It's the typical "cut taxes" for votes, then claim to be cutting spending when doing nothing of the sort.

VOODOO economics. LOL

Originally Posted by michaelr

You assume there is no waste in Medicare?

Cutting taxes is always good for the economy. Hey no worries Blue, there wont be jobs, and you socialist society will collapse with the abundance of dependents. That you be assured of.

I'm not against the cuts per se. But I think lowering taxes right now isn't going to help. You know what I think would help? Raise taxes on outsourcing, deriviates and all profits made by NOT hiring people. You want a tax cut? Hire somebody.

Originally Posted by Blueneck

Florida's new governor is planning on fixing the budget by cutting costs by $5 billion and lowering taxes by $4 billion.

Maybe it's just me, but I don't see how this strategy gets you out of the hole.



To add to the problems they already have, they've got 12% unemployment already.



Also:



I'm not seeing this working.

Fla. governor plans Medicaid changes as he seeks to cut taxes and spending

If you cut 5 billion from the budget that is a 5 billion savings. If you cut 4 billion from income the savings is only 1 billion. It is a matter of subtraction and it is in favor of the savings side. Having cut taxes it will put money into the pockets of the people who will spend it. If the people spend more it will add to the taxes paid. This may also add jobs and take people off of the welfare rolls. This will also add to the taxes paid. The logic behind this is that at first sight the state saves 1 billion and if the added revenue from new the gained earnings adds say, 1 billion, the state gains 2 billion overall. I hate to question you but what is there to understand beyond simple addition and subtraction? It may not be the fast way of doing this but the tax cuts will help the people to a degree and right now the people do need to be helped to any degree that they can.

Originally Posted by OldFashioned

If you cut 5 billion from the budget that is a 5 billion savings. If you cut 4 billion from income the savings is only 1 billion. It is a matter of subtraction and it is in favor of the savings side. Having cut taxes it will put money into the pockets of the people who will spend it. If the people spend more it will add to the taxes paid. This may also add jobs and take people off of the welfare rolls. This will also add to the taxes paid. The logic behind this is that at first sight the state saves 1 billion and if the added revenue from new the gained earnings adds say, 1 billion, the state gains 2 billion overall. I hate to question you but what is there to understand beyond simple addition and subtraction? It may not be the fast way of doing this but the tax cuts will help the people to a degree and right now the people do need to be helped to any degree that they can.

What if the people who are paying less taxes just invest in emerging markets instead?

Originally Posted by michaelr

Cutting taxes is always good for the economy.

This, like all similar absolute statements, is just not true, unless you think a zero percent tax rate is a good idea.

Certain services are mandatory. If you don't fund them, your society will fall apart, and your economy along with it. America would not exist as anything close to what it is, for example, without the interstate system. So collecting enough taxes to fund that project was, without any question, an excellent idea for the economy.