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Political Math Is the New Free!

Jackie Gingrich Cushman on

Last Saturday, President Joe Biden tweeted the following about his $3.5 trillion proposal: "My Build Back Better Agenda costs zero dollars. Instead of wasting money on tax breaks, loopholes and tax evasion for big corporations and the wealthy, we can make a once-in-a-generation investment in working America. And it adds zero dollars to the national debt."

There are several obvious flaws with the statement. The first is the underlying misunderstanding of how government expenditures work; the second a clear misunderstanding of how math itself works.

Let's start with the first: the concept of government taxing and government spending. Government does not create its revenue by providing a service or good for customers who may or may not purchase, depending on whether they want to buy the good or service at the price offered. Instead, governmental entities pass laws that impose taxes upon people.

It's not only the federal government that levies taxes, but also states, counties and cities. They levy taxes on what you earn, what you buy and what you own.

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Social Security taxes, Medicare taxes, estate taxes, inheritance taxes, taxes on the transfer of property, property taxes for owning physical assets, fuel taxes, gas taxes and who knows how many other taxes. Since the government takes the income tax out of the employees' checks before they receive their pay, and the sales taxes are remitted by the seller, we often become numb to the high level of taxation.

 

The government then spends this money; for the past few decades, it has then borrowed more to cover the deficit that has resulted from spending more than we get in tax revenues. The only time we had a balanced federal budget in my lifetime -- and I was born in 1966 -- was when my dad, Newt Gingrich, was speaker of the House and cut a deal with then-President Bill Clinton.

The Build Back Better bill Biden is touting is a $3.5 trillion social spending bill that is supposedly neutral because of the offsetting increases in tax payments that are also in the bill. Keep in mind that the government is also running a deficit, borrowing money to spend, which leads to inflation -- which lowers the purchasing power of every dollar. Think of it as a deficit tax.

"Democrats and the White House have proposed paying for the spending bill through an IRS crackdown involving ramped-up audits of American taxpayers and by raising taxes on higher incomes and businesses, such as raising the corporate tax rate from 21% to 26.5%, hiking the capital gains tax rate from 20% to 25%, and increasing the top individual income tax rate from 37% to 39.6%," according to a New York post article, "Biden hit for claiming Build Back Better agenda 'costs zero dollars'" written by political reporter Callie Patteson and published on Monday,

The sales pitch is clear to the public: "We want to give you someone else's money, those bad people who are keeping too much of their own money. The government needs more of it so we can then give it to you."

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Copyright 2021 Creators Syndicate, Inc.
 

 

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