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.

HERE ARE THE FACTS:

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ONE MORE QUICK THING:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

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