Posted on 12/08/2012 7:05:25 AM PST by Kaslin
I’ve been arguing against higher taxes because of my concerns that more revenue will simply lead to a bigger burden of government spending.
Yes, I realize it is theoretically possible that a tax hike could be part of a political deal that produces a good outcome, such as entitlement reform.
But that doesn’t seem to happen in the real world. Indeed, I pointed out almost exactly one year ago that the only budget deal that gave us a surplus was the 1997 pact that cut taxes instead of raising them.
But maybe there’s evidence from other parts of the world showing that tax hikes lead to balanced budgets. Perhaps we can learn something from European nations.
Let’s start with this chart I put together after digging through historical data from the United Nations, European Commission, and Organization for Economic Cooperation and Development. It shows tax burden for the 15 nations of the pre-2004-expansion European Union, minus Luxembourg which didn’t collect this kind of data in the 1960s. Basically, we’re looking at the average tax burden in Western Europe for 1965-1969 and for 2006-2010.
Not surprisingly, it shows that the tax burden has jumped significantly. I suspect the adoption of the value-added tax deserves a good bit of the blame, but that’s a separate issue.
For this post, we’re wondering whether this big jump in taxes resulted in more red ink or less red ink.
This second chart looks at the burden of government debt, which averaged 45 percent of GDP for the 1965-1969 period. And we see a stick figure wondering whether the debt for 2006-2010 will be higher or lower. In other words, did politicians use the additional revenue to pay down the debt, did they spend it, or did they spend all the added revenue and then borrowed even more?
Well, knock me over with a feather. The next chart shows that debt is much higher today, averaging about 60 percent of GDP.
In other words, every penny of new tax revenue got spent. Not only that, but Europe’s politicians accumulated even more red ink because they increased spending even faster than they increased revenue.
What’s the moral of this story? Well, President Obama claims his class-warfare tax policy will reduce deficits as part of a “balanced approach.”
But what he’s actually proposing is that the United States should emulate our friends on the other side of the Atlantic. And it seems their idea of a “balanced approach” simply means higher taxes, as you can see from this shocking chart. Gee, what a coincidence.
Based on what we know about the evidence in Europe, and based on what we know about the proclivities of American politicians, anybody want to guess what will happen to U.S. government debt if Obama prevails?
P.S. The pre-2004-expansion European Union nations were Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, and the United Kingdom.
P.P.S. The figures in this post are for central government taxes and debt.
P.P.P.S. There are some good lessons to be learned from other nations, as shown in this video. And if you pay attention to the details in that video, you’ll notice that the key to good fiscal policy is…drumroll please…following Mitchell’s Golden Rule.
There is nothing in this process about learning. It is all about gaining power, holding power, and using that power to subjugate others to an end.
The unemployment rate for civilian government workers plunged from 4.2 percent in October to 3.8 percent in November, according to the Bureau of Labor Statistics, as government added 35,000 to its taxpayer-funded payrolls during the month.
In October, federal, state and local governments in the United States employed 20,524,000 people. In November, that climbed to 20,559,000.
As recently as July, the unemployment rate for government workers was as high as 5.7 percent, according to the BLS. That month, government employed only 20,015,000.
Since July, times have been very good for government in the United States, with governments managing to add 544,000 workers to their payrolls.
The Bureau of Labor Statistics counts someone as a government worker if they are not in the military and they are currently employed by any level of government—local, state or federal—or they are unemployed, they are looking for work, and their last job was for any level of government.
Boy. Talk about The Rape of "Mitchell's Rule".
Yes, they have to take away everything from everyone so there is only the “Poliburo” in charge.
You know that they are the only ones who can run the world and the rest of the people need to be in a position to have to do their bidding.
Yes, they have to take away everything from everyone so there is only the “Politburo” in charge.
You know that they are the only ones who can run the world and the rest of the people need to be in a position to have to do their bidding.
You should be ashamed of yourself, nothing in this article will do a damn thing to improve anybody’s Self Esteem, it will not help even one horny child how to learn the proper use of a condom. It sounds as if you are trying to bully people with all these facts. Furthermore, who the hell do you think you are bringing up “Facts” in an emotional argument?? You should immediately report to the nearest Public School for re-education.
What most liberals don’t know is that they can’t ALL be members of the “Politburo”.
There has to be the “Useful Idiots”, and they are all too happy to fill that billing.
When we get dragged away, we will understand why. When THEY get dragged away by the people they supported, they will invariably scream in indignant puzzlement “Why me? I am on your side!” (or, they will meekly submit, with the full dawning awareness of the way things REALLY are, and how they just stepped right into it.)
But the indignant ones, the ones who held the equivalent of Mao’s Little Red Book over their heads (Probably “Rules for Radicals”) are the ones who will be puzzled. They are the ones who will languish in camps (as A.S. described them doing in “The Gulag Archipelago”) and feel bad for the people in power who really had good intentions, and weren’t really responsible for them ending up in the camp. It was all some kind of bureaucratic mistake...even if Stalin had been the one to prescribe the sentence himself.
Twisted and sick. As the other poster (starboard) said...brainwashed.
I am not sure if you read the article. Your reply does not make any sense whatsoever. (btw) I did not write the article)
Good job!
I like the simplicity and the clarity of this. I’m going to mentally file it away for future use against the liberals.
It would be interesting to see this same analysis done on Canada.
Thought the sarcasm was Obvious, sorry will use /S tag next time. Yes I read Article
Most of the articles with regards to Government Spending never tell the dirty little secret about Government Spending in the first place.
Dirty little secret::
ALL revenues that flow into the Federal Government at ALL levels are used to Pay Off previously issued Treasury Bills.NOT A SINGLE PENNY IS SPENT OTHERWISE. All EXPENDITURES are Created with Brand New Treasury bills with Interest. At No time is the interest created to pay these off. What this means it takes an ever increasing STEALING of your money to pay off the EVER increasing Interest. It is virtually IMPOSSIBLE to have a “Balanced Budget” under our current Monetary Policy, unless of course Every Budget is smaller than the previous by an amount that EXCEEDS the Interest Payable. this is simple math folks.
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