When Tax Cuts Aren't Tax Cuts
Max Sawicky is so very right about this:
There are no tax cuts. Banish that phrase from your mind. You haven't seen any. Republican control of the White House and Congress has yielded trillions in tax increases since January of 2001. How can this be? Simple. When you spend more, and when you pass laws that commit the government to spending more in the future, you increase taxes, sooner or later. Spending not financed by current taxes will be financed by future taxes. A debt increase is the present value of future increased taxes. If taxpayers merely pay interest on the debt incurred, forever, the present value of the interest payments is the initial increase in debt.
On the other hand, that's not all, strictly speaking, true. Some people will get genuine tax cutsand guess who they are? The Center on Budget and Policy Priorities ran the numbers on this a while back, and found that if the government cuts taxes and then increases spending, the ultimate burden of these virtual "tax increases" would fall on middle- and lower-class families. That is: a tax cut, followed by the sort of deficit spending Bush and the Republicans are so fond of, followed by progressive financing of the deficit, would ultimately make the bottom and middle 20 percentiles worse off, in total, by a couple hundred bucks, while those making over $1 million would come out ahead in the end, by some $60,000 apiece, on average. Not a bad deal, when all is said and done. So yes, a few Americans are getting tax cuts, even under Sawicky's definition.