Last modified: 7:58 AM Saturday, 14 January 2017

Of tax dodgers and fiscal responsibility

How government finance works is no big mystery, for it is precisely the way finance works everywhere: There is income, there are expenses, and when expenses exceed income, deficits ensue. On that much, everyone can agree.

Throwing caution to the winds

Capitalist economies have their ups and downs.
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But when public budgeting is the question, there is a fundamental ideological division as to how to end the cycle of deficit spending. (There are also those who insist that there’s nothing wrong with such spending, but that perspective is now sufficiently unfashionable that I will pass it over at present.)

Those who call themselves “conservative” see the problem as one of too much spending. End all social programs and environmental regulation, they argue, and we stop spending beyond our means: problem solved.

On the “liberal” side, there is a different perception: Until very recently, social programs and regulation were within our means. Something has changed since then, but it’s not some flaccid abstraction about the global economy. Since about 1980, according to this theory, revenue has steadily fallen, thanks to tax policies nominally intended to spur growth by leaving more money in the hands of industry. Restore the income, and our means suffice to pay for public services.

That I believe the latter interpretation is the sounder is no surprise to anyone familiar with my writings. But that is an opinion, and opinions are worth nothing without facts to support them. With that in mind, have a look at this page; for what it presents, although sparse, is firm evidence demonstrating one of the consequences of a tax policy more beneficial to corporate executives than to middle- and working-class Americans: Some of the most profitable companies doing business in the U.S. pay almost no taxes on their record-setting profits, and some have even received rebates that leave them the net beneficiaries of government largesse.

Combine this with the free money handed off, in our bifurcated economy, to those able to prove they don’t need it, and you see how the largest economy in the world manages to crawl along just above the water line, jettisoning women and children to make room for more ballast. And you’ll see the source of much of the profound unease that has infected everyone who is not oblivious to the state of our nation. So far, left and right disagree about the remedy, but at least both sides know something is very wrong.

Originally published as a review of a article on corporate tax revenues and the economic consequences of their relative absence. As of 19 March 2015, the article has been replaced and cannot be found.

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