When Tax Cuts Aren’t Tax Cuts

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Max Sawicky is so very right about this:

There are no tax cuts. Banish that phrase from your mind. You haven’t seen any. Republican control of the White House and Congress has yielded trillions in tax increases since January of 2001. How can this be? Simple. When you spend more, and when you pass laws that commit the government to spending more in the future, you increase taxes, sooner or later. Spending not financed by current taxes will be financed by future taxes. A debt increase is the present value of future increased taxes. If taxpayers merely pay interest on the debt incurred, forever, the present value of the interest payments is the initial increase in debt.

On the other hand, that’s not all, strictly speaking, true. Some people will get genuine tax cuts—and guess who they are? The Center on Budget and Policy Priorities ran the numbers on this a while back, and found that if the government cuts taxes and then increases spending, the ultimate burden of these virtual “tax increases” would fall on middle- and lower-class families. That is: a tax cut, followed by the sort of deficit spending Bush and the Republicans are so fond of, followed by progressive financing of the deficit, would ultimately make the bottom and middle 20 percentiles worse off, in total, by a couple hundred bucks, while those making over $1 million would come out ahead in the end, by some $60,000 apiece, on average. Not a bad deal, when all is said and done. So yes, a few Americans are getting tax cuts, even under Sawicky’s definition.

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THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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