by Simon Black, Sovereign Man:
[Editor’s Note: As we’re coming up on the end of the year, we thought it would be appropriate to republish some of our most popular articles from 2017. Today’s was originally published on April 24]
In a poll conducted a few days ago by NBC News / Wall Street Journal, a record 57% of Americans responded that they want MORE government in their lives, and that the government should be doing more to solve people’s problems.
That’s the highest percentage since they started asking this question in 1995.
In fact, 57% is nearly double what people responded in the mid-90s.
Furthermore, the number of Americans who feel the opposite, i.e. responded that the government is doing too many things that should be left to private businesses and individuals, fell to a near record-low 39%.
Bottom line: people want more government.
It’s hard to even know where to begin with this.
First- more government is nearly an impossibility.
As I’ve written several times in the past, the US federal government already spends almost all of its tax revenue on mandatory entitlements like Social Security, and interest on the debt.
They could literally cut nearly everything we think of as government– national parks, Homeland Security, even the IRS– and still not make a dent in paying down the national debt.
According to the US government’s own financial statements, their net operating loss in 2016 was an unbelievable $1.05 TRILLION.
Think about that– they lost more than a trillion dollars in a completely unremarkable year.
They weren’t waging world war, funding a major infrastructure project, or dealing with an economic crisis.
It was just business as usual. And they STILL lost over a trillion dollars.
More government is going to cost even more money that they don’t have… which means even more debt and even more pain in the future.
The usual refrain is to pay for more government programs by raising taxes on the rich, or big corporations, or whoever the evil villain du jour is.
Anyone who thinks this actually works needs to study history.
Simply put, RAISING TAXES DOES NOT RAISE TAX REVENUE.
I wish every Bernie Sanders voter could understand this very simple fact:
Since the end of World War II, US federal government tax revenue as a percentage of GDP has been nearly constant at 17%.
In other words, while the actual dollar amount of tax revenue goes up every year due to inflation and economic expansion, the government’s slice of the total economic pie is 17%.
Yet during the previous eight decades, actual -tax rates- have been all over the board– sometimes rates were higher, sometimes rates were lower.
Back in 1963, for example, the highest marginal tax rate on individuals exceeded an unbelievable 90%.
I’m sure there are plenty of Americans who would love to see the wealthiest citizens paying 90% again.
Yet in 1963, even with rates that high, the total amount of tax revenue that the US government collected was 16.7% of GDP.
In 1988 when the highest tax rate was slashed to just 28% under Ronald Reagan, total tax revenue 17.3% of GDP.
It doesn’t matter if tax rates were high or low– the actual tax revenue that the government collects stays constant at around 17% of GDP.
This raises a point that these socialists never seem to understand:
If the government’s slice of the pie never seems to change no matter how high or how low tax rates are, shouldn’t they focus on making the pie bigger?
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