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When tax cuts are disguised future tax increases

 

The late Milton Friedman, a free-market economist and Nobel laureate, liked to say that to spend is to tax. Today’s tax cuts, if they lead to deficits, are really just disguised future tax increases. The same is true of today’s deficit-building spending increases. They, too, are poorly disguised future tax increases.

Ultimately, what is spent by government is what is paid for by taxpayers. Those facts come to mind when looking at the Congressional Budget Office’s recent outlook on borrowing. Even though the economy is perfectly healthy, the CBO projects that annual deficits will soon break the $1 trillion mark, a place they haven’t been since the Great Recession, when high unemployment and a collapsed stock market caused tax revenues to plummet.

Democrats and Republicans worked together to hike spending on core government programs by $300 billion in the next two years, and likely by more than $1 trillion over the next decade.

►Neither party has shown much willingness recently to address government’s biggest spending problem: benefit programs such as Social Security and Medicare, whose costs rise automatically each year based on how many people retire and what health care providers think they should be paid.  Read More

Related news: Andrew Cuomo complains about tax breaks for wealthy — then signs off on N.Y. loopholes.  Read More