Sunday, July 29, 2012

The federal government is a "bargain"?

Idiots at U.S. News & World Report claim,
If you could buy a Toyota Camry or an Apple iPad for 20 percent off the regular price, you'd probably consider it a great deal. Savvy buyers haggle for much smaller discounts on quality merchandise.

Few consumers have noticed, but the federal government has essentially been on sale, with taxpayers paying about 20 percent less than they used to for what Washington does. Yet unlike satisfied customers, taxpayers are increasingly fed up with the government they finance. This could make them downright surly when the price of government goes back up, which is a near certainty over the next few years.

The price we pay for government, of course, is taxes, and despite what inflammatory political rhetoric might suggest, they are at modern lows. A new report published by the Congressional Budget Office shows that the average household paid 17.4 percent of its income to the federal government in the form of taxes in 2009, the latest data available. Today's rate is probably comparable.
This is so disingenuous, so based on statistics, that it's beyond horseshit lies.

Tax rates haven't gone down, so how are families paying "20 percent less than they used to"? They're not. Their taxes as a percentage of total federal spending has gone down, because the federal government is borrowing much more than it has in 70 years -- over $1 trillion annually, to be specific. Don't take it from me, take it from the federal government's own data (table 1.1). This claim of the "sale" is akin to saying a spendthrift family's paychecks are a lower part of its total spending, when in fact the family hasn't cut spending and is running up a great deal of debt.

If taxes were really like cars or technology, first, we're being forced to buy the item, and second, we're still paying full retail price, just not right now. We, our children and all future generations will be paying for the "discount," plus interest. Some "sale."


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