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this post was submitted on 26 Aug 2023
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the_dunk_tank
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It's the dunk tank.
This is where you come to post big-brained hot takes by chuds, libs, or even fellow leftists, and tear them to itty-bitty pieces with precision dunkstrikes.
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Except that taxes do not fund government spending. This is a neoclassical myth that needs to die.
The US government can literally give free healthcare to everyone and solve homelessness tomorrow without having to tax for anything, or having to “cut spending elsewhere to pay for it”, because the Federal Government can create whatever amount of currency needed to fund its free healthcare project.
Taxes come later to remove the excess liquidity from the circulation. Remember, the Federal Government has to spend the dollar first before they can be taxed back.
ok but public transit in a town is gonna be funded by some grants probably and then operated on rider fees and local taxes. Gary Indiana isn't sovereign and Mississippi can't afford shit.
That’s the point. A country that is not constrained by resources, labor and technology should never have to go through this. There is nothing stopping the Federal Government from handing out generous grants to improve the infrastructure of states/cities/towns.
Taxes serve the purpose of changing behavior (penalty for smoking, for example, or to encourage the adoption of environmentally friendly technology) and reducing wealth inequality (taxing land, rich people, corporations), but these taxes are not used to pay for the good stuff. You don’t tax billionaires to fund government spending, you tax them because you can and you don’t want a small group of people to hold disproportionate amount of wealth.
that failure of the federal government has nothing to do with what i was talking about.
on a local level the local taxes we all pay are directly in the budget for that spending. we literally vote on 0.025% property tax increases to pay for specific local projects.
"taxes do not fund government spending" is literally false for entities that don't control the currency or those resources.
Any tips on where I can learn more about this concept?
Modern Monetary Theory. From an purely economic perspective, SimulatedLiberalism is right.
Think of taxes as an olympic sized swimming pool, a politician may say they are raising taxes to dump a new bucket of water into the pool, but some guy comes around once a month to drain or fill the pool so it always stays level.
Even if what you say is true, telling people tax funds the government/public infrastructure incentives people to pay tax. If you go around telling people "I'm taxing you because I can, and the tax will be used to fund my vacation to Dubai" you're gonna get shit on