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by threeseed 2491 days ago
When people refer to US government they mean Federal.

And the concern is that the Federal government has structurally degraded its budget such that it is running larger and larger deficits.

And unfortunately when you give away money as tax cuts it's often politically impossible to reverse it.

2 comments

If one looks up the etymology of the word appropriate:

https://en.wiktionary.org/wiki/appropriate

"From Middle English appropriaten, borrowed from Latin appropriatus, past participle of approprio (“to make one's own”), from ad (“to”) + proprio (“to make one's own”), from proprius (“one's own, private”)."

So when you write, "when you give away money as tax cuts" it gives the impression that allowing people to keep more of their earnings is giving them things, it comes across as Orwellian. Legislation was passed, and signed into law. In the U.S., following the law is not giving people things, but income taxes are giving the federal government things (sometimes states too).

It's the balance of payments that's the problem, not government deficits. All lowering the deficit does when there's a negative balance of payments is increase private debt.

And if there are recession fears, the last thing you want to do is raise taxes. The problem is where the tax cuts are, not that they are tax cuts; you want to cut taxes on people who spend a high proportion of their income on consumption, not wealthy people who will sit on it.

As for the political impossibility of reversing tax cuts, in the case of cuts for the rich, this is not at all due to public pressure, but private pressure, and in that the impossibility of reversing tax cuts is no different from the impossibility of not enacting them. When politicians are more obligated to voters than donors, taxes on wealthy people will rise. There is zero pressure from voters to maintain tax cuts on wealthy people, other than general support for an entire package of tax cuts if very visible middle class subsidy is mixed in with them.

In the U.S., the bottom 47% pays zero income taxes. The tax rates on the middle class are far lower than in Europe. Look at the actual tax brackets (i.e. the data).

As for the idea that the latest tax reform only helped the wealthy:

"The analysis Doggett referenced indeed indicates benefits will accrue to the very wealthy over time. Yet in the first year of changes, the top 1 percent are projected to draw a little over half the tax savings. The threshold of 80 percent going to the top 1 percent is projected for the tenth year. Also, Doggett’s stated figure for incomes is too low; it ties to the first year of implementation."

https://www.politifact.com/texas/statements/2017/oct/20/lloy...

And unfortunately anytime politicians run on raising taxes it’s spun as a tax on the majority of people, whether true or not. But I disagree with using taxes to fund government. Money comes from the government as does the ownership of all property. Taxes should instead be used to disincentive bad behavior.