It’s Summer Fundraising Time!

Thank you to all our generous donors who have already contributed to our cause; your support makes a tremendous impact. If you haven’t yet, please consider making a donation today to help us continue our vital work.

$3,320 of $60,000 raised

Is the Government’s Budget Equal to GDP?

by | Aug 8, 2016

Is the Government’s Budget Equal to GDP?

by | Aug 8, 2016

Memo to news people: tax cuts don’t have to be paid for. The money is ours; the government takes it from us by threat of force, i.e., taxation. It’s government programs that have to be paid for. Tax cuts are not government programs. So if you want to ask how government programs will be paid for if taxes are cut, fine. I will answer that the programs should be abolished.

The more you think about the notion that tax cuts must be paid for, the more ridiculous it sounds. One might say tax cuts have have to be made up for (by cutting spending), because the government would have less revenue, but not paid for. Moreover, since taxpayers pay for everything government does (sooner or later), the conventional wisdom about paying for tax cuts translates to: How should the taxpayers pay for their tax cuts? To which the only proper answer is: Huh? Say what?

From the taxpayers’ vantage, tax cuts cost nothing. We might say they cost the politicians, bureaucrats, and government contractors something–but it’s something they had no right to anyway. Securing my wallet “costs” a would-be thief my money. But who cares?

Final point: a hidden premise of this belief is that the government properly owns all wealth and income. In budget-talk when the government gives you a chance to recover or hold onto some of your money, say, via a tax deduction or credit, that is known as a “tax expenditure”; in other words, it’s just another way for government to spend (its) money. But under that way of thinking it follows that not taking the money in the first place is also a tax expenditure. What’s the difference between, on the one hand, taking money and giving some back and, on the other, not taking the full amount to begin with? Thus the whole GDP must be the government’s budget because the politicians, as they see things, “spend” all of it one way or another.
This is pretty absurd. So let’s just acknowledge that what you honestly earn is yours and that the government is a thief because taxation is theft.

Sheldon Richman

Sheldon Richman

Sheldon Richman is the executive editor of The Libertarian Institute and a contributing editor at Antiwar.com. He is the former senior editor at the Cato Institute and Institute for Humane Studies; former editor of The Freeman, published by the Foundation for Economic Education; and former vice president at the Future of Freedom Foundation. His latest books are Coming to Palestine and What Social Animals Owe to Each Other.

View all posts

Our Books

libertarian inst books

Related Articles

Related

European Elites Commit to Their Self-Destruction

European Elites Commit to Their Self-Destruction

Much to the dismay of the European elites, the people of Europe appear to be resolutely rejecting the status quo. Right-wing parties are gaining ground in almost every European state as a reaction to the consistent failures of the establishment statists. Economic...

read more
The News From Across the Pond

The News From Across the Pond

The recent elections in the United Kingdom and France underscore a broader trend of political stagnation and directionless muddling within Europe. Despite clear signals from voters rejecting the status quo, the established elites are resisting substantive changes,...

read more
TGIF: Culture without Romance

TGIF: Culture without Romance

"The entire history of the human race, the rise of man from the caves, has been marked by transfers of cultural advances from one group to another and from one civilization to another." So said economist, social philosopher, and historian Thomas Sowell in a 1990...

read more
The Means of Our Future Horror

The Means of Our Future Horror

Presidential campaign season is in full heat. Given the vast power of the state, the warring identity lines within our society, and the people’s susceptibility to all manner of propagandistic discourse, it’s looking a lot like midnight in America. Americans consume...

read more

Pin It on Pinterest

Share This