First, the news, a short article from the May 14, edition of THIS WEEK Magazine:
President Biden wants to beef up the IRS budget significantly, said Jeff Stein in The Washington Post.
Biden is looking to increase the Internal Revenue Service’s budget by $80 billion over the next 10 years, with the money going toward increasing “the number of agents and giving the IRS new tools and technology to execute collections and crack down on avoidance” by the wealthiest families.
The White House says the extra boost could “raise as much as $700 billion,” helping pay for an expansive child-care and education plan.g
The IRS has lost roughly 18,000 full-time positions since 2010, “with the number of auditors falling to lows unseen since the 1950s.”
The head of the IRS told a Senate committee this month that tax cheats cost the government as much as $1 trillion a year.
In the above news, the good news snippets are: “beef up the IRS budget significantly,” and “increase the Internal Revenue Service’s budget by $80 billion,” That’s $80 billion growth dollars going into the economy, together with more employment (perhaps 18,000 positions?) for agents.
Additional good news: “increasing the number of agents.” That’s 18,000 more employed Americans. More good news: “tax cheats cost the government as much as $1 trillion a year.” That’s $1 trillion a year that is not being taken from the economy.
Yet even more good news: The desire to “crack down on avoidance by the wealthiest families.” That would help narrow the Gap between the rich and the rest, which helps address the biggest problem in economics.
The bad news is: “raise as much as $700 billion.” That means $700 billion growth dollars would be removed from the economy, dramatically cutting into Gross Domestic Product.
The additional bad news is: “ . . . helping pay for an expansive child-care and education plan. Helping pay for child-care and education is good news, but the bad news is that Biden and friends actually believe (or claim to believe) federal taxes pay for those benefits.
In claiming federal taxes pay for federal spending, Biden essentially has set the stage for falsely claiming the government “can’t afford” to pay for benefits to the public. It’s all part of the Big Lie that provides the rich, who run America, with a ready excuse for not supporting such benefits as Medicare for All, Social Security for All, college for all, etc.
The Big Lie is the perfect Gap Psychology tool to widen the Gaps between the have-more and the have-less.
In Summary: Unlike state/local taxes which pay for state/local government spending, federal taxes do not fund federal spending.
The federal government pays for its spending by creating new dollars, ad hoc. It has the unlimited ability to create its own sovereign currency.
Unlike state/local taxes, which immediately are returned to the economy as part of the money supply via deposits into bank checking accounts, federal taxes are destroyed upon receipt.
The sole purpose of federal tax collection is to control the economy by taxing what the government wants to discourage and giving tax breaks to what the government wants to encourage.
Oh, and there is one other purpose: To fool you into believing that certain benefits to you are “unaffordable,” because the federal debt supposedly is “unsustainable.” It’s all a feature of the Big Lie.
Rodger Malcolm Mitchell [ Monetary Sovereignty, Twitter: @rodgermitchell, Search: #monetarysovereignty Facebook: Rodger Malcolm Mitchell ]
THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE. The most important problems in economics involve:
- Monetary Sovereignty describes money creation and destruction.
- Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:
- Eliminate FICA
- Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
- Social Security for all
- Free education (including post-grad) for everyone
- Salary for attending school
- Eliminate federal taxes on business
- Increase the standard income tax deduction, annually.
- Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
- Federal ownership of all banks
- Increase federal spending on the myriad initiatives that benefit America’s 99.9%
The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.