Politicians arguing tax policy is toothless gumming and that’s that.
Fiddling with taxes is a lazy substitute for a lack of direction. Taxes are a slow, unwieldy policy tool likely wrong or impotent before any desired effect will be realized across the economy. And for that matter, fiddling with budgets is slow and lazy policy too.
Since the 1950s, taxes are a difference that make very little difference.
There have been more than 30 major changes in the tax code including personal income tax rates, corporate tax rates, capital gains taxes, dividend taxes, investment tax credits, depreciation schedules, Social Security taxes, and the number of tax brackets among others.
Yet during this period, federal government tax collections as a share of GDP have moved within a narrow band of just under 19% of GDP.
Raise taxes. Lower taxes. It’s almost irrelevant. It’s a noisy cover.
Arguing about taxes seems to be a true and reliable indicator there’s significant confusion about operating a workable economy. The chart below might reveal that taxes become an issue whenever the economy falters. Political and pundit fingers point, arms flail, only to reveal their errors continue.
Anyone Else Believes Taxes Pay Bills Or Generate Faster Economic Growth? [link]
Tax up. Tax down.
1. You can tap dance.
2. You can tap dance.
We could fund the government if we knew how to bill for bullshit. What’s missing is invigorated economic action, city-by-city, sector-by-sector, with far less bleeding from useless finance packaging, from dangerous and sloppy waste embedded in so many forms, and by reversing leadership capture and relentless fraud.
It’s nuts to exploit ineffectual issues when we must revitalize and renew.
The years of tax hikes [in red] collect 19.3% of the GDP.
The years of tax cuts [in gray] collect 18.2% of GDP.
You can calculate this difference is ample. Regardless, taxes is not the topic that matters these days.
Tax rates. It’s our shame we have too little better on the agenda.
