Government Has a Spending Problem, Not a Revenue Problem

The Weekly Standard has published an article detailing what the real problem is in Washington – and higher taxes won’t solve it.

Conservatives know that higher taxes don’t equal economic growth, in fact just the opposite. But money-hungry big-government liberals continue to equate any kind of reform that would benefit our country in the future to tax breaks for the wealthy.

President Obama and the left like to claim that the wealthy should pay “their fare share” in taxes, but we already know they do pay their fare share, and then some. The left also likes to claim that revenues are down because of the Bush tax cuts, but this is just another lie facilitated by the left in order to create class warfare. As The Weekly Standard points out:

“Whether you start the clock at the end of World War II, in 1970, or in 1990, the average percentage of the gross domestic product (GDP) that Americans have paid in federal taxes is 18 percent.”

After the Bush tax cuts took effect, the average remained at 18%, even in 2006-2008, when the recession began. If anything these tax cuts helped offset what would have been an earlier drop in percent of GDP in federal taxes.

NOW we are seeing much lower returns in federal taxes. In 2009, when employment skyrocketed beyond 10%, just 15% of GDP was paid in federal taxes. What also changed in 2009, was the percent of GDP SPENT by the federal government. Government spending rose to 25% of GDP, the highest it had been since World War II.

THAT is where the problem lies. Until the recession, tax revenues stayed linear, the only change was the amount spent by Washington. So if, as the Democrats continuously propose, we raise more revenue, it will only give more credence to their spend-freely agenda. Spending is what really needs to be cut; government needs to live within its means, not live within the means it wants. And government certainly shouldn’t raise taxes just to continue out-of-control spending.

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2 thoughts on “Government Has a Spending Problem, Not a Revenue Problem

  1. “The left also likes to claim that revenues are down because of the Bush tax cuts…”

    It’s not a partisan dispute, it’s a truth universally acknowledged.

    See, e.g., http://www.washingtonpost.com/wp-dyn/content/article/2006/10/16/AR2006101601121.html

    “Federal revenue is lower today than it would have been without the tax cuts. There’s really no dispute among economists about that,” said Alan D. Viard, a former Bush White House economist now at the nonpartisan American Enterprise Institute. “It’s logically possible” that a tax cut could spur sufficient economic growth to pay for itself, Viard said. “But there’s no evidence that these tax cuts would come anywhere close to that.” Economists at the nonpartisan Congressional Budget Office and in the Treasury Department have reached the same conclusion. An analysis of Treasury data prepared last month by the Congressional Research Service estimates that economic growth fueled by the cuts is likely to generate revenue worth about 7 percent of the total cost of the cuts…

    Now, you’re free to argue that you will feel happier if the government leaves revenue where it is in the wake of the Bush revenue reductions. That’s a perfectly legitimate policy preference.

    But we know as a factual matter that Bush-era fiscal policies increased the deficit by decreasing revenues.

    • The revenue is down because there are so many people trying and doing a good job, might I add of beating the IRS. There are companies that advertise every day on TV that if you owe over $10,000 to IRS they will help you settle your bill. Some of the people who owe astounding amounts of money to IRS pay about 1/10 of the amount they owe. They make and spend the amounts of money the earn. They should pay the taxes on it. They become millionaires with this money, own fine homes, fine cars and all the other luxuries of having it. However, they don’t want to pay taxes. “STOP IT”. Cut out the vacations that cost this country thousands of dollars three or four times a year. The people don’t get to do that. Cut some of the salaries in the Congress and the House. You want to cut our Social Security and Medicare and not your luxuries. I have worked since I was 14 years old and paid for my Medicare and so has my husband. I have never had a vacation. I raised my two children without welfare and with insurance and most of that time as a single mother. After having the two children I could afford, I made sure there would be no more. I have given you reasons that our Social Security and Medicare should not be cut. Now if each person on Social Security would say as I do that any administration that threatens to pay what we have already earned will not be supported by the Seniors and their families in this election and back it up. That is what me and mine are doing and all of my friends.

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