Generally speaking, tax cuts are stupid and evil. I recognize and respect that jiggling tax rates is a legitimate public policy tool and there are good tax cuts that make sense.
But generally, and I stress generally, it’s all just a load of propaganda pushing an agenda to reduce the amount of taxes the wealthiest people pay. Has been for ever.
Taxes pay for hospitals, schools, roads, sewers, food safety inspections, scientific research, universities, welfare programs, the military and (though they cheap out on it) culture. And it’s a safe bet that as economies become wobblier, the line-up for public dollars will grow. (I’m just waiting for the newspaper industry to demand public bail-outs, for instance. I’m not sure this would be a bad idea.)
Since we need these things, tax cuts politics are not sustainable.
In the United States, there’s a different attitude. In the U.S. tax cuts are sacred and government are always bad (that’s why that country is doing so well!). Raise taxes because you can’t pay for even the basics? Can’t happen.
Here’s a great article by economist Paul Krugman that’s partly about this tax-cut madness. An excerpt:
Hypocrisy never goes out of style, but, even so, 2010 was something special. For it was the year of budget doubletalk — the year of arsonists posing as firemen, of people railing against deficits while doing everything they could to make those deficits bigger.
And I don’t just mean politicians. Did you notice the U-turn many political commentators and other Serious People made when the Obama-McConnell tax-cut deal was announced? One day deficits were the great evil and we needed fiscal austerity now now now, never mind the state of the economy. The next day $800 billion in debt-financed tax cuts, with the prospect of more to come, was the greatest thing since sliced bread, a triumph of bipartisanship.
You should read it.
And in 2010, pay attention to calls for tax cuts and to who’s doing the calling. It’ll be an informative hobby — if nothing else, it’ll give you a clear idea who gets invited to the expensive parties.
Happy New Year’s Eve!