Congress was at it again: It was having difficulty passing a budget on time, thereby threatening to shut down the government.
This now occurs every other month or so. It is one of the many aspects of our dysfunctional government.
The problem is simple and obvious: Republicans want small government and low taxes. Democrats want the government to provide services for the people - you know, things like education, infrastructure, public health, medical insurance, police, defense, etc. Republicans prefer that you keep as much of your earnings as possible and that you hand over to the government as little of it as possible. A majority of Americans agree with this. Therefore any candidate who dares to suggest raising taxes is committing political suicide.
During the Reagan era, there even arose an economic theory which argued that CUTTING tax rates would INCREASE the government’s tax intake. The theory became quite popular. It was called the LAFFER CURVE, after its progenitor Arthur Laffer. The man’s reasoning was that lower taxes incentivize workers to work more and earn more, and businessmen to invest productively rather than to shelter their profits unproductively or hide them in off-shore tax havens. This theory has long been debunked by most economists, including Nobel Laureate Paul Krugman, some calling it the “laughter curve.” yet it retains many adherents among conservatives.
The Republicans’ never-ending efforts to minimize taxes also include their current campaign against increasing the IRS in order to maximize tax audits and minimize tax cheating. Tax under reporting and underpayment cost the government several dozen billion dollars every year.
Understandably, even Democrats are loath to advocate raising taxes.
Yet, there approaches a time when this will be absolutely inevitable. Here are some facts (See for example What is the National Deficit ).
For the past twenty-two years, the federal government has been spending more than it has been taking in. Its budget was last in the black in 2001, when Clinton was president.
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