Tag Archives: Wealth in the Twenty-First Century

Taxes: It’s Complicated

My economic training is limited to one basic economics course I took in college. I think it was part of the core curriculum, like Algebra I and World Lit.

I, like many Americans, struggle to understand our economic system. How do we collect the taxes we need for supporting our military, and protecting us from harmful drugs, and running air traffic control systems, and guarding cyber security and social security, and a thousand other programs needed by a developed society?

I turn to studies and articles by economists who’ve studied our taxing systems. A number express concern, even alarm, at the steadily widening differences between the income of a wealthy few and everyone else. (Thomas Piketty, Wealth in the Twenty-First Century, among others.)

Tax plans now before Congress call for tax cuts. But, according to a former official of the Reagan administration: “There’s no evidence that a tax cut now would spur growth.” (Bruce Bartlett, “Reagan Adviser: Tax cuts, set the stage for an all-out attack on welfare state,” The Washington Post, 19 November 2017).

Other economists, such as Paul Krugman, agree. They warn against the tremendous deficits the currently proposed plans would cause.

Bartlett questions why those politicians so concerned in the past about deficits now seem unconcerned with prospects of massive deficits. Those deficits seem likely if one of the current plans passes, calling for cuts to many taxes paid by the wealthy.

Exactly because of those deficits, Bartlett says, the plan will create “a deficit so large, something must be done about it.” With deficits growing, politicians then can insist on cuts to the government programs they despise, including Social Security and Medicare.

It’s a back door way to eliminate programs popular with the American people. The wealthy, of course, don’t need those programs.