Works well in academia, but alas, history demonstrates that if we give the government more money, the will spend it and then some.
On Nov 24, 10:24 am, MJ <[email protected]> wrote: > Raising Taxes Is Not Reducing Government SpendingWednesday, November 24, 2010 > byGeorge Reisman > Sunday'sNew York Timescarries an article titled "The Blur Between Spending > and Taxes." The author is Harvard Professor N. Gregory Mankiw.[1] The > essential theme of the article is that the government is spending when it > decides to forgo tax revenue that it otherwise could have collected. Indeed, > tax revenues forgone in the enactment of tax deductions, such as for interest > payments on home mortgages or charitable contributions, and tax credits, such > as for first-time homebuyers or adoptions, are now commonly described as "Tax > Expenditures." The thought is that the government is spending money in > deciding not to take it in taxes and to allow the taxpayers to keep it. > The underlying assumption of those who hold this view is that the government > already owns the funds in question whether it has collected them in taxes or > not. The government is the alleged owner of funds that belong to the taxpayer > and which it abstains from taking. It allegedly spends these funds in > allowing the taxpayers to keep them. > The fundamental question is, who is the owner of the funds paid in taxes? Is > it the citizens, who have earned the funds and who turn them over to the > government under the threat of being fined or imprisoned, or even killed if > they physically resist the government, or is it the government? > To the supporters of the principle of individual rights and limited > government the principle on the basis of which the United States was founded > the obvious answer is that the people own the tax revenues and, in paying > them, financially support the government. To the supporters of an omnipotent > government ruling over a citizenry of rightless serfs, the government is the > owner both of the people's possessions, which, allegedly, are theirs in name > only, and, indeed, of the people themselves. It is on the basis of this > belief that it follows that the government financially supports the people in > not taxing away their wealth. > The defenders of individual rights need to remind the government that it does > not pay or enrich anyone by allowing him to keep what is already his. > This truth has major implications for the subject of tax reform, which > theTimes'article was written to address. Tax reform needs to consist > exclusively of reductions in government spending and in taxes. It should not > be based on massive tax increases resulting from the elimination of existing > tax deductions and credits. It is actual government spending that must be > reduced, not what people have up to now been able to avoid having to pay in > support of that spending. > The notion of tax expenditures provides the pretext for massive tax increases > in the name of reducing government spending. This notion must be cast aside, > so that the target of tax reform will be reductions in actual government > spending, which then must be followed by reductions in taxes. This is what > must be done on a truly massive scale. To the extent that it is accomplished, > the income tax can be progressively reduced, until it is ultimately > eliminated altogether. At that point, all questions of income tax deductions > and credits will have disappeared. > As matters stand, the notion that the absence of taxation constitutes > government spending is setting the stage for the total perversion of genuine > tax reform. It is being used in an effort to imposeas much as a trillion > dollars a year in new taxes disguised as a trillion dollars a year of reduced > government spending. In the words of theTimes'article,Erskine B. Bowles and > Alan K. Simpson, the chairmen of President Obama's deficit reduction > commission, have taken a hard look at these tax expenditures and they don't > like what they see. In their draft proposal, released earlier this month, > they proposed doing away with tax expenditures, which together cost the > Treasury over $1 trillion a year.This is the sum and substance of the concept > of tax reform held not only by the Obama administration but also by cowardly > Republicans and conservatives. Simpson was a Republican United States Senator > from Wyoming for eighteen years. Mankiw, the author of the Times' article, > was chairman of President Bush's Council of Economic Advisors from 2003 to > 2005. > In sum, the danger exists that Left and Right are about to unite to > accomplish a colossal political fraud in the form of enormous tax increases > sold to an unsuspecting public as reductions in government spending. The > American people need to stand up and refuse to accept any form of the > absurdity that in not taxing them, the government is spending their money and > that the path to lower spending and taxes is raising their taxes. The basis > of tax reform must be reduced government spending, not higher taxes. > George Reisman, Ph.D., is Pepperdine University Professor Emeritus of > Economics and the author ofCapitalism: A Treatise on Economics(Ottawa, > Illinois: Jameson Books, 1996). His web site iswww.capitalism.net. His blog > is atgeorgereismansblog.blogspot.com. Send himmail. (A PDF replica of the > complete bookCapitalism: A Treatise on Economicscan be downloaded to the > reader's hard drive simply by clicking on the book’s title, immediately > preceding, and then saving the file when it appears on the screen.) See > George Reisman'sarticle archives.Notes[1] The article appears on p. 5 of the > Business Section of the November 21, 2010 issue.http://mises.org/daily/4857 -- Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more.
