12. The Government is taking stringent measures aimed at collecting taxes due from local businesses in order to alleviate the Territory s deficit.

Fiscal consolidation. Large budget deficits are absorbing the national savings that should be used to expand business investment, and are increasing the national debt that will have to be financed by future taxes.

America s gravest fiscal problem is the short and medium run deficit between tax revenues and spending. This deficit is entirely of Bush s own creation, having enacted and now seeking to extend tax cuts that are not cuts at all, because they merely shift the burden of fiscal consolidation onto future generations.

The virtue of such a framework is to take into account the impact of temporarily weaker output on fiscal outcomes. Thus, a deficit is acceptable when it results from abnormally low tax revenues, but not when revenues are at their normal level.

The Government had introduced tax legislation aimed at reducing the fiscal deficit.

Republicans have proposed tax reforms in lieu of rate hikes on high income taxpayers to raise revenues for deficit reduction. Obama has signaled that he is willing to consider this approach, provided it increases tax revenues from the top 2 3 by at least the same amount as higher rates while protecting other taxpayers.

Good and Bad Deficits

Similarly, a modest carbon tax or value added tax, with credits or subsidies to offset the regressive effects on low income households, could generate enough revenue both to pay for a significant reduction in the corporate tax rate and to make a meaningful contribution to deficit reduction.

Because of economic recession, it was often not possible to reduce budget deficits, either by reducing government expenditures or by increasing taxes.

Lowering taxes on the poor and raising unemployment benefits while simultaneously increasing taxes on the rich can stimulate the economy, reduce the deficit, and reduce inequality. Cutting expenditures on the Iraq war and increasing expenditures on education can simultaneously increase output in the short and long run and reduce the deficit.

19. Public finances are characterized by a large structural deficit. The State s tax receipts remained low in 1996, at 12.8 per cent of GDP and came essentially from indirect taxes on foreign trade. This is due to the overall weakness of the economy.

America s current account deficit, which was an alarming 5.8 of GDP as recently as 2006, has now shrunk to just 2.7 of GDP a level that the US can easily finance from its royalty income and returns on prior foreign investments without incurring additional foreign debt. Even more impressive, China s current account surplus, which reached an extraordinary 10 of GDP in 2007, is now barely 2.5 of national income.

We can apply this reasoning to the United States unsustainable fiscal deficit. As is well known, closing this deficit requires less spending or more taxes.

The opposite side of the high absorption GDP ratio is an equally high trade deficit.

The balance of payments registered a deficit of US 155.6 million in the first quarter of 1998.

A deficit?

BERKELEY The United States is beset by four deficits a fiscal deficit, a jobs deficit, a deficit in public investment, and an opportunity deficit. The budget proposals put forward by presidential candidate Mitt Romney and his running mate, Paul Ryan, could reduce the fiscal deficit, but would exacerbate the other three.

Tax revenue can be raised without increasing marginal tax rates by limiting the tax subsidies that are built into the current tax code. Those subsidies are a hidden form of government spending on everything from home mortgages and health insurance to the purchase of hybrid cars and residential solar panels.

Output growth in the US remains anemic, and the economy continues to face three significant deficits a jobs deficit, an investment deficit, and a long run fiscal deficit, none of which is likely to be addressed in an election year.

16. Recent poverty eradication initiatives in the United States had included an increase in the minimum wage, expanded tax credits for working families, a reduction in the federal deficit and improvements in education and teaching.

These revenue losses could be offset by curtailing so called corporate tax expenditures deductions, credits, and other special tax provisions that subsidize some economic activities while penalizing others and broadening the corporate tax base. Both President Barack Obama s plan for business tax reform and the Simpson Bowles deficit reduction plan propose reducing such expenditures to pay for a reduction in the corporate tax rate.

The Energy Deficit

Budget deficit

Likewise, the government s deficit might fall not because of austerity, but because the stock market s anticipation of economic growth fuels higher revenues from capital gains tax. Once again, we would see what might appear, from looking at the government deficit, to be an austerity to prosperity scenario.

With tax revenue collapsing and expenditure ballooning, the government found itself running such large deficits that the markets were spooked government bond prices collapsed, interest rates soared, and the country found itself unable to finance its deficit. Where were the rock bottom interest rates that are supposed to characterize periods of weak growth and high unemployment?

Obama, by contrast, would run larger deficits his spending increase is much larger than his tax increase which imply large tax hikes in the future. Moreover, he would run far larger debt ratios than Romney, because the main driver of the debt is entitlement spending.

So the key to raising revenue is to reduce tax expenditures, use some of the resulting revenue to reduce tax rates, and devote the rest to reducing future deficits. Opponents of tax increases should see that, because such revenue raising is really cutting government spending, it does not imply the adverse incentive effects of raising marginal tax rates.

On the fiscal front, the shift from a complex system of state level indirect taxes to a national goods and services tax (a type of value added tax) will improve efficiency and raise revenue. Lowering the subsidy for diesel fuel was politically difficult, but will reduce both the fiscal deficit and excessive use of diesel products.

And 2004, the net profit, after taxes very serious taxes was 120 million dollars.

With respect to Africa s own progress on tariff reduction, the international community should be sensitive to the possible impact of tariff reduction on budget revenues, fiscal deficits, macroeconomic instability and debt service burden.

The majority of citizens agree with President Barack Obama that tax increases for deficit reduction should fall on the top 2 3 of taxpayers, who have enjoyed the largest gains in income and wealth over the last 30 years. That is why he is proposing that the 2001 and 2003 rate cuts for these taxpayers be allowed to expire at the end of the year, while the rate cuts for other taxpayers are extended.

The IMF estimates that these cyclical effects on revenue and outlays have raised the overall deficit by nearly 5 of Greek GDP. On a cyclically adjusted basis, Greece s overall budget would show a surplus of 0.6 of GDP this year.

The move account was being retained pending receipt of additional funding to cover the cumulative deficit.

This is where America s multilateral trade deficit enters the equation, for it has long accounted for the bulk of America s balance of payments gap. Since 2000, it has made up fully 96 of the cumulative current account shortfall.

The Sino American Trust Deficit

The Global Trust Deficit

Statement XLII (concluded)

(Signed) Jean Pierre Halbwachs

While French public spending which stood at 56 of GDP in 2011 is at or above Scandinavian levels, French households pay lower tax rates on consumption and personal income. The gap is bridged by a mixture of deficit spending and high taxation on employment.

According to the Public Auditor, the Government of Guam already faced a significant deficit in early January 2005, on the order of 300 million. It was noted that the 300 million deficit did not take into account millions of dollars of unpaid tax refunds and pending earned income tax credits, which has been an outstanding issue in Guam.

Given all this, more deficit spending will only stoke fears of higher future taxes and inflation. It will encourage the reemergence of global imbalances.

Similarly, although social welfare spending is lower in the US than in the Nordic countries, its budget deficit as a share of national income is much larger. The US spends less in the public sector, but it taxes even less than it spends.

In this situation, government deficits rise naturally, as tax revenues decline and spending on unemployment insurance and other benefits rises. These automatic stabilizers plug part of the private sector spending gap.

America s Misplaced Deficit Complacency

America s Three Deficits