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  • Tax Hikes Are Not Government Savings

    Most people think of savings as that portion of a family’s income that they put away for emergencies, a big purchase, or their kids’ college education. It seems that some in the media want to change that definition.

    The Hill ran an article equating tax increases with “savings” in terms of the budget deficit:

    Senate Democrats claim they are close to agreement on a spending plan that would reduce borrowing by more than $4 trillion over the next decade, with about half the savings coming from higher taxes.

    To review: Savings come from spending less, not taxing more. Higher taxes cannot be savings for the government, because the income wasn’t the government’s to begin with. The extra revenue that would come from those tax hikes belongs to the American families and businesses that earned it. The government cannot “save” it by taxing it away from those who earned it.

    Politicians, the media, and other commentators exhibit this troubling way of thinking far too often when discussing the federal budget. For example, it comes up often when they refer to the “cost” of tax cuts. Just like tax hikes can’t be savings for the government, tax cuts can’t cost the government anything because the money was never the government’s to begin with. Or, more accurately, it is only the government’s money once it has been extracted from the taxpayer.

    President Obama, his allies in Congress, and other backers of an ever-expanding federal government welcome this dangerous redefining of simple words like budgetary “savings,” “tax costs,” and “mandatory spending.” Such misrepresentations make it easier for them to raise taxes to fund their big government programs.

    After all, if our income belongs to the government in the first place, it is hard to object to government keeping more.

    It is important that taxpayers remember that tax hikes are not necessary to lower the deficit to sustainable levels. Tax receipts will rebound once the economy picks up in the next few years and surpass their historical norm of around 18.5 percent of our economy by 2017. If Congress restrains spending to its customary level of 20 percent of our economy or less, then deficits will fall to sustainable levels without raising taxes a dime. We show in great detail how to do this in The Heritage Foundation’s new, comprehensive Saving the American Dream plan.

    Getting spending under control, strengthening the economy, and holding the line on taxes will truly be savings to already beleaguered American taxpayers.

    Posted in Economics [slideshow_deploy]

    11 Responses to Tax Hikes Are Not Government Savings

    1. arthur v ballard 931 says:

      In the early 50ds at 25yr.old, in college, my first economic professor taught us that economic was math @ that numbers can not be change. Dr. Koffer was his name. he had a doctorate in accounting & law. He also was a CPA & Lawyer ( at that time an individual could hold both in California.).

      He also taught nothing gets accomplished with out the the first step. Use the simplest way to start. For example 2&2 equals 4. Unfortunately people in gov. & lawyers do not understand. The first step in correcting the economic mess we have is stop pending.

      Art Ballard

    2. George Colgrove, VA says:

      This is a perspective issue.

      The entire federal government is fighting over vapor money as if it were real. If it came to fruition that federal workers and congress acheived full understanding that their jobs and programs are unfunded and grasped what that really means. (i.e. realizing one day as you were walking along that you were 1,000 feet in the air with nothing supporting you) you will see any financial resource as yours. A tax rate of 32% is actually a cost of 68% of that resource – that they see is theirs.

      In their mind that 68% allowance they are graciously providing us is costing them their livelyhood. By increasing taxes, they are actually lowering that 68% cost to them.

      Their ignorance and self-serving nature will not let them see that once they have siphoned all the money from the private sector, there will no longer be any more growth and therefore no more taxes. Because a 100% tax or 0% loss to the government means there will be no more tax revenue the next year.

      We need a stable tax policy more than a cut or increase. People and businesses need to plan. We all need to stop fearing the federal workforce as they eyeball our wallets for more cash to suppliment their lush lifestyles and ineffective pet programs.

    3. surfcitysocal says:

      "…because the income wasn’t the government’s to begin with." Thank you, thank you, thank you. Rep. Anthony Weiner tried to promote the idea recently in a segment on Fox's On the Record that not collecting future Obamacare taxes was going to "cost" the government millions…billions. Preposterous premise. Their tax shell game is infuriating.

    4. George, CO says:

      As stated in the other comments, progressives look at the our income as theirs to be distributed to what they deem as worthy. The President referred to raising taxes as spending reductions. That says it all. Jon Stewart did a great bit on that statement pointing out the idiocy of tax increases being spending cuts.

    5. Pingback: The Morning Links (5/26) | From the Desk of Lady Liberty

    6. Robert says:

      K

    7. Pingback: Daily Dive Memorial Day, 2011 | adeliemanchot

    8. Luis Colon says:

      You are playing with words. Savings are as you suggest, a fund of money put by as a reserve. But savings can also be an act of economizing; reduction in cost, or even recovery or preservation from loss or danger. Certainly both the 2nd and 3rd way of conceiving of 'savings' the dems are close to right.

      Higher taxes puts money in the governments hand's, this is money that does not have to be borrowed. Simple as that. Government costs money and it has to come from somewhere, US. We can agree that we all want the government to spend less money, but whatever the cuts may be we still need some. Paying down the present debt, wherever it came from, is pressing. It costs us in interest. The money we don't borrow could perhaps be used to pay down the bill, thus accruing savings.

      What is this government? It is a government of the people, whatever party is in power. The them you speak about is US. By speaking of the government as 'them' you are knocking yourself on the head. It is US together. Democrats, Republicans, and whatever else. We all share in the burden even though we seem to reject our joint part in building it.

      Taxes are just about at the lowest point ever. No rich person became rich by him/herself. Their money was made with the support of this nation. Rich or poor, we have been provided something very good here. Twenty dollars is nothing to someone with 100,000 in their pocket. It is not quite the same for those with $100. Percentage is not a clear indication of burden. It is time for the top 1% to bear the brunt. Most won't even feel it as much as those below. How rich does anyone have a human right to be.

      Enough! Think your thoughts whatever they be. That is how government moves, by the push and tug of 380 million opinions. Just don't try to confuse anyone with silly playing with words.

      • Lucy Gunn says:

        "How rich does anyone have a human right to be."

        Actually, as rich as anyone wants to be. Interesting that you scold for word play while presenting an outright fallacy. You made some good points there until the true colors bled out. The idea that there would be a limit to how much success someone is allowed is preposterous.

        Especially when you think of the billions that would go to the govt instead of helping charitable causes. The govt would just use it to create more depts and bureaucracy, and temporary "make-work" projects to apply as economic band-aids.

        It's common knowledge that no amount of taxes will fix our current situation and allow for endless spending.

        You should turn you view inward and examine why you hate successful people so much that you're willing to blame them for unforgivable mismanagement of our nation's economy. Rich people have always existed, the difference is that now the govt thinks it is also rich.

        Like you, the govt believes it has first find on all earnings. And yes–the government is an entity of the people, and yet it does nothing but take advantage of its citizens, rich and poor.

    9. George Colgrove, VA says:

      Luis,

      If government was the people, it would not need one lawyer. We would have 100% transparancy and when we ask for information we would see unredacted pages. Other than immediate national security concerns, trade secrets and identifying information on citizens there would not be a need for governemnt censors. The federal workers would be paid similarly to the private sector employees.

      No the government is the government. It comprises of arogant self serving public workers who create problem they then solve. Your comment reeks of all that. Rather than being in similar work environments as businesses – as we are all businesses, federal workers work in secret and are not obligated to disclose their activites. The public has been banned from all federal office buildings.

      Federal workers are aprotected breed and thousands of people are lined up drooling to get one of those positions. If the government were the people, then once an activity goes unfunded (i.e. deficit spending) they like us on main street would see that people were fired or programs eliminated to ensure a ballanced budget. But no, what we see is a body of selfish people who will rather see the country collapse so they get their lucrative paychecks. The governmentis not he people – the government is the government.

    10. Very interesting. thank you for sharing!

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