Uncle Sam has his money.
Actually, the federal government already had most of the money it expected to receive in income taxes for 2007. April 15 has now passed, and in theory American income earners have filed their returns for 2007. Redistribution of withheld tax money, in the form of spending or refunds, now occurs.
Many people are getting more money back than they had previously anticipated. In February, Congress passed the Economic Stimulus Act of 2008, providing tax relief of up to $300 per individual and $600 per family.
Everyone welcomes the gift. It’s a great example of bipartisan, election-year legislating. It’s also costing the U.S. Treasury $114 billion in revenue this year, and an estimated $82 billion in lost revenue for the period of 2008 through 2018, according to a watchdog Web site.
You’ve got to love the admittedly cynical example that says our debt-laden federal government is borrowing money from China and giving it back in the form of tax relief to individual Americans, who turn around and buy stuff produced in China, thereby twice-fueling the Chinese economy over the long term, and the American economy for the short term.
You’ve got to further wonder this – if the federal government is so willing to give us each an extra $300 or $600 in tax relief, why’d they take it in the first place?
Let’s not be cynical, though. Let’s think candidly about income taxes.
We would like our federal government to collect no more of our money than it needs to provide government services. First things first, please. We want superlative national defense. Good roads, and excellent systems for moving goods and people. A system of law and rules governed through a just court and public safety system. A way to take care of those who cannot take care of themselves.
What has happened, of course, is that we want government to do so much more than the basics. And we want someone else to pay for those services.
Further, we evaluate those we elect upon their ability to “bring home the bacon.” We ask the elected to act upon our own selfish behalf, without regard for what is best for America. Those desires stand in conflict. Sure, we’d all love to pay less in taxes. But will we demand less in services? And are we willing to sacrifice for the nation’s well being?
No. The evidence is clear.
Go online, right now, and you can find something called the U.S. National Debt Clock. As of sometime Tuesday morning, the national debt stood at $9,449,089,730,116.02. That’s $9.45 trillion, the equivalent of $31,101.58 for every American. Debt grows at $1.67 billion per day.
Granted, the composition of federal debt can be debated. Some of it is an obligation to future entitlement. Some of it is legitimate borrowing to meet real needs. Some of it is exaggerated for effect.
Still, it’s a real obligation, one that continues to grow through annual federal budget deficits, and one that we plan for someone else to pay. Our children. Our grandchildren. Their children. It’s going to come due, some day.
In 2004, when he still chaired the Federal Reserve, the venerable Alan Greenspan urged Congress to “pay as you go.” He suggested tax cuts and new spending programs “must be financed with tax increases or spending reductions in other areas.”
“A free lunch has still to be invented,” Greenspan concluded then. Four years later, we are still waiting on the inventors. And it won’t happen. First rule of economics – There is no such thing as a free lunch.
What does all this have to do with income taxes? This, maybe.
Let’s pay our fair share. Let’s ask less of federal government. Let’s demand less bacon, and more basics, prudence and efficiency. Let’s make a real commitment to paying as we go, without borrowing against the future.
You have our money, Uncle Sam. Please use it wisely.