Monday, July 12, 2010

Taxing credulity

Do you ever wonder if certain people in government have even a basic understanding of budgeting? That is, the amount of money that comes in minus the amount of money that is paid out equals either surplus or deficit. In the case of government, the money that comes in is otherwise known as taxes so the budgeting formula can be stated very succinctly, thusly:

Taxes - Expenditures = Surplus/(Deficit)


You would think that anyone who has made it to the halls of Congress as an elected representative of the people would at least understand that very basic concept, but apparently, you would be wrong. Exhibit number one of this fallacy is Sen. Jon Kyl of Arizona. This is what he said on Fox News Sunday yesterday:

"You should never raise taxes in order to cut taxes. Surely Congress has the authority, and it would be right to -- if we decide we want to cut taxes to spur the economy, not to have to raise taxes in order to offset those costs. You do need to offset the cost of increased spending, and that's what Republicans object to. But you should never have to offset cost of a deliberate decision to reduce tax rates on Americans."


Yes, that is actually what he said. Verbatim. To which I reply, "Huh?"

What Kyl is apparently saying is that reductions in taxes do not have to be offset by reductions in spending in order to balance the budget, but increases in spending in any area do have to be offset by reductions in spending in another area. However, you must never, never raise taxes for any reason! Kyl was arguing for making the Bush tax cuts for the richest people in the country permanent, while at the same time arguing that unemployment benefits for those disadvantaged by our crippled economy should not be extended because that would contribute to the deficit. In his reasoning, lower taxes can never contribute to a deficit; only spending - especially social safety net spending - can do that.

And that is exactly the way that most people in his political party think about budgeting. They just never internalized that formula:

Taxes - Expenditures = Surplus/(Deficit)


They claim to hate, hate, hate the deficit, but their only solution to curing it is to decrease expenditures, even though most economists urge that in our current situation what is needed is more government spending and the deficit be damned! We'll think about that tomorrow. Never, ever, in their wildest moments would Republicans like Kyl ever consider raising the taxes of the super rich (who can certainly afford it) to help solve the deficit crisis. It seems that when it comes right down to it they don't really hate the deficit that much.

Honestly, it taxes one's credulity.

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