Biden’s budget plan is based on fraudulent numbers, but it is also based on the fraudulent idea that a big, European-style welfare state can be financed without fleecing lower-income and middle-class taxpayers.
I’ve repeatedly pointed out that this is not true, but it’s time to turn this fiscal fact into a Theorem of Government.
Some of my friends on the left don’t agree with the first sentence of this Theorem. In some cases, I think they sincerely believe that big government can be entirely financed by going after upper-income taxpayers.
This is why I added the second sentence. After all, surely some of Europe’s welfare states would have figured out how to shield poor and middle-class people from high tax burdens if that was possible.
Yet that’s not the case. As illustrated by this unfortunate Spaniard, ordinary people in Europe get fleeced by their governments.
The good news (sort of) is that there are some honest folks on the left who openly admit a big welfare state means big taxes on ordinary people.
I even include them on my page of “honest leftists.”
And now we have a new member of that club. Congressman Conor Lamb of Pennsylvania recently admitted that his party’s agenda will require taxes on those of us with modest incomes.
Here are some excerpts from a report by Emily Brooks.
Pennsylvania Rep. Conor Lamb acknowledged that enacting all of the Democrats’ sweeping policy visions would require Democrats to raise taxes on the middle class rather than relying on tax increases on the rich. “If we want to propose a lot of new spending and adventurous new government programs in our party, we have to have the confidence to ask … the middle class and people like that to contribute to it. And I think that’s … what we’re missing right now,” Lamb, a Democrat representing a swing district northwest of Pittsburgh, said last week. …”Some of the focus on the billionaires and the ultra-wealthy that people are putting in the news right now — it’s fine, it’s valid, it’s not enough to fund everything we want to do,” Lamb said.
Needless to say, I disagree with Cong. Lamb’s policy agenda. If we adopt European-style fiscal policy, it will mean anemic, European-style economic malaise. And that will translate into lower living standards for the masses. But at least he’s being honest about what he wants.
P.S. To elaborate, a small government can be financed by a few rich people. That’s basically the story of Hong Kong. A medium-sized government can be financed in large part by the rich. That’s sort of the story of the United States (though ordinary people pay of a lot of payroll taxes). But there’s no way to finance a Biden-style agenda without going after ordinary taxpayers.
P.P.S. Here are my other Theorems of Government.
- The “First Theorem” explains how Washington really operates.
- The “Second Theorem” explains why it is so important to block the creation of new programs.
- The “Third Theorem” explains why centralized programs inevitably waste money.
- The “Fourth Theorem” explains that good policy can be good politics.
- The “Fifth Theorem” explains how good ideas on paper become bad ideas in reality.
- The “Sixth Theorem” explains an under-appreciated benefit of a flat tax.
- The “Seventh Theorem” explains how bigger governments are less competent.
- The “Eighth Theorem” explains the motives of those who focus on inequality.
- The “Ninth Theorem of Government” explains how politics often trump principles.
- The “Tenth Theorem of Government” explains how interest groups exploit crises.
- The “Eleventh Theorem of Government” explains that big companies are not supporters of free enterprise.
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