The Great Tax Con

[Carolab]

http://www.pkarchive.org/economy/TaxCutCon.html

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Riley knows all about substandard public schools. He's the governor of Alabama, which ranks near the bottom of the nation in both spending per pupil and educational achievement. The state has also neglected other public services -- for example, 28,000 inmates are held in a prison system built for 12,000. And thanks in part to a lack of health care, it has the second-highest infant mortality in the nation.

When he was a member of Congress, Riley, a Republican, was a staunch supporter of tax cuts. Faced with a fiscal crisis in his state, however, he seems to have had an epiphany. He decided that it was impossible to balance Alabama's budget without a significant tax increase. And that, apparently, led him to reconsider everything. ''The largest tax increase in state history just to maintain the status quo?'' he asked. ''I don't think so.'' Instead, Riley proposed a wholesale restructuring of the state's tax system: reducing taxes on the poor and middle class while raising them on corporations and the rich and increasing overall tax receipts enough to pay for a big increase in education spending. You might call it a New Deal for Alabama.

Nobody likes paying taxes, and no doubt some Americans are as angry about their taxes as Tinsley's imaginary character. But most Americans also care a lot about the things taxes pay for. All politicians say they're for public education; almost all of them also say they support a strong national defense, maintaining Social Security and, if anything, expanding the coverage of Medicare. When the ''guy on the news'' asks whether we can afford a tax cut, he's asking whether, after yet another tax cut goes through, there will be enough money to pay for those things. And the answer is no.

But it's very difficult to get that answer across in modern American politics, which has been dominated for 25 years by a crusade against taxes.

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[punpirate]

1. What I wished this article mentioned...

... was not passing comment on the total debt, but its relationship to the "starve the beast" mentality. There's plenty of talk these days about passing that debt on to children and grandchildren, but very, very little talk about how much of the current budget is chewed up by interest on that debt.

And that's where starve the beast comes in--right now, annual interest payment on the debt is over $330 billion. That money can't be used for Head Start, for payments to land grant colleges to reduce the cost of tuition, for a host of other worthy social services. It has to be earmarked for servicing the debt--otherwise, the government defaults on its obligations, and both Treasury bonds and the dollar become worthless.

So, if the debt keeps rising, and so-called defense spending keeps rising, and taxes continue to be cut, the debt continues to grow, and so does the annual interest payment on the debt, gradually squeezing out other spending--and leaving the debt obligation to future generations to pay.

[Carolab]

2. Good point. You are right. n/t