Governments must raise revenues to finance vital functions; we all know this and have very little choice in the matter as those decisions were made many generations ago (i.e. social contract theory). Life’s lottery has placed me squarely in the United States; it is a Land of Opportunity™, where economics and government are oft discussed and poorly understood. Because of this lack of understanding, the average citizen supposes our government does more than it can reasonably or legally be expected to accomplish.
I’m really discussing a particular affiliation here, and that affiliation is…all of them. Made you look.
Nevertheless, people of no particular political affiliation will discuss for hours the notion that tax cuts are expenditures to be paid for rather than a decrease in revenues. It’s all on the backs of the poor, dammit! Does this honestly make any sense to folks? Politicians sure take advantage of this notion.
It is because of this framing, that when we talk about tax cuts, it becomes very easy for those opposed to these cuts to paint them as something that has to be paid for—or more sinisterly, as some kind of cash grab for a favored class. It is as if it is the government handing over money, rather than the government simply not collecting it.
We can think of taxes as a form of government revenue, or sales, in the business sense. Reducing the price of one product does not mean that business is simply handing over cash to its customers—even if they run sales claiming as much. But that move can do a couple of things for that business. If the reduced price doesn’t affect the number of units sold, then you will see a reduction in sales. However, and this is the most likely scenario, that reduction in price is most likely going to increase the demand for that product and increase sales. A tax reduction can also work this way, depending on the category of tax. It can encourage investors to move money into the economy, and increase government revenue.
This all seems rather counterintuitive, but think about this: no decision is isolated. Everything has an effect on something else, and all decisions encourage or discourage other actors from making specific decisions. What do you think?
What exactly is going on with these Democratic primaries? While I have absolutely very little experience or knowledge of their operation due to my relative lack of age, I have to wonder whether or not the candidates have always been this venomous, vile, and voracious in attacking each other–and I’m not referring to an attack on an opposing party’s candidate.
At the beginning of this process I found myself in support of Barack Obama and his run at the democratic nomination (and perhaps as President), but these constant mainstream news and media organization provoked attacks between him and Hillary Clinton are getting out of control; by all appearances, Hillary will not get the nomination, but she remains in the race and threatens to divide the party to the point of detrimentally affecting the Democratic party in the fall.
In addition to that wonderful mess, this primary has created a sense of disillusionment for many (well, at least for me) in the political process; I do not wish to see a SuperDelegate™ selected nominee for any office. This is especially true in a process that claims to be seeking the will of the people; Super delegates be damned!
I’ve been turned off by the Barack Obamas of this world. What I have truly enjoyed about the man has been his ability to unite a large swath of the populace; it has not mattered what demographic category an individual has been from, they loved him. What I have been turned off by has been his lack of knowledge. A lack of knowledge in basic economics; a lack of regard for the economic standing of millions of Americans; and a lack of concern for the truly impoverished: the middle class.
Neither candidate has a real grasp on what is important to scores of Americans: absolutely no new taxes (and in my case, the dissolution of the Federal income tax–lets bring the tax money back home to the states). Instead they tout “plans” to fund all sorts of socially responsible programs. Programs like universal health care. Funded. By. Increasing. Taxes. To ensure that those of use who make all of this crazy phat cash pay our share of the burden.