This is the third article in a series on taxation leading up to Tax Day, April 15.
Politicians, especially Republicans, love to talk about “cutting taxes,” and in some cases they actually do cut some taxes and ease the burden of all. Unfortunately, this masks the dirty, grimy truth that no statist wants to hear: it isn’t how you are taxed that really matters, but how the government spends.
It is really quite simple to understand. The government cannot create wealth on its own. If it could, it would be a business and trade peacefully. Instead, all government “products” are constructed through the resources of others – taxes. And those spent scarce resources constitute that which is used up, that which could have been allocated for wealth creation under the free market.
If the government “cuts” taxes and yet continues deficit spending, are not resources still being consumed? Of course they are. Whether or not you agree with the Laffer curve theory, deficit spending is obviously not sustainable. Whatever is spent must be repaid, and it will be paid for by future confiscation of scarce resources. So, a reduced tax now without spending reductions most certainly means greater taxes later, and likely with interest upon the national debt. The presumed authority of the government to spend to no end is anathema of liberty.
Thus, we see the reality of taxation clearly. Every cent that the government spends is the tax, not merely what is collected. Every cent spent is an income tax. Cutting collected taxes without cutting spending is merely tax deferment, nothing more.
Now, of course I am not saying the unthinkable, that we need to RAISE taxes in order to reach sustainability again. By no means! Rather, we should remember that your tax burden is not just what is withheld every month…
I say it’s time to declare a War on Spending. Where do you want to start?