How Do We Spend for the Tax Increase?

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The new administration is talking about reducing business income taxes from the highest in the developed world to one of the lowest.

Everywhere on the TV and in newspapers I see people (the establishment) asking how will we “pay for” the proposed tax reductions. Will it be a new value added tax? a border adjustment tax? something else?

Well, if we have to “pay for” any tax reduction with new taxes, what do we do when taxes are raised. When I buy something I have to pay for it. When I sell something, as in a yard sale, I get to spend for it. So if we have a tax increase, do I get to spend for it?

I suspect the “we” in these formulations are the government and not the people. How will we (the government) pay for a reduction in corporate income tax? In no way. The non-government portion of the country will have more money, the government portion of the country will have less. The only people with a problem about how to pay for tax cuts are the people who get to spend tax revenue.  That is not you and me.

 

scrivener

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