America will come to regret its war on taxes
Mounting U.S. deficits and decades of tax cuts fuel a debate over whether America can “afford everything” its $27 trillion economy produces or is locked into unsustainable overspending. Commenters argue over raising taxes versus cutting programs, how much revenue can realistically be raised from the rich, and whether the middle class must pay more, alongside worries about government waste, political capture, and reliance on the dollar’s reserve-currency status. Many see current anti-tax politics as shifting costs onto future generations and poorer citizens, while others insist only a much smaller state and stricter fiscal discipline can avert crisis.
Deficits, Spending, and What’s “Sustainable”
- Many agree the large U.S. deficit is unsustainable and will require “substantial, painful” changes.
- Disagreement over whether it can be solved mostly by higher taxes, or if large spending cuts are also essential.
- Some argue for zero or near‑zero deficits; others accept ongoing deficits if small relative to GDP and below growth rates.
- Concern that interest payments are consuming a fast‑growing share of the budget, forcing either cuts or inflation.
Who Should Pay More? Progressivity and “Tax the Rich”
- Several argue that modest, broad-based rate increases (especially on higher incomes and payroll caps) could largely fix the budget numerically, though not politically.
- Others counter that there isn’t “much juice to squeeze” from the very rich alone; middle and upper‑middle classes will have to contribute more, as in many European systems.
- Debate over whether billionaires and top 1% pay “their fair share,” given unrealized gains, capital gains treatment, and aggressive tax planning.
- Proposals range from higher top marginal rates and taxing capital gains as income to extreme wealth or ultra‑high‑income taxes; critics say these would raise little and spur avoidance.
Government Performance, Waste, and Trust
- Some see U.S. government efficiency as comparable to large corporations; others cite local/state examples of fraud, mismanagement, and costly, ineffective programs (infrastructure, homelessness, transit).
- This erosion of trust makes voters reluctant to support higher taxes, fearing they fund “profligate waste” rather than real improvements.
- Disagreement over whether most non‑defense spending is well‑targeted and socially beneficial, versus bloated bureaucracy that should shrink “dramatically.”
Economic Structure, Reserve Currency, and MMT
- One line of discussion links the “war on taxes” to U.S. dollar reserve‑currency status: easier to fund deficits via foreign demand for dollars, effectively exporting some inflation.
- Others argue that foreign holdings of U.S. debt have flattened, so deficits are now borne mainly by domestic savers and inflation.
- Some tie this to Modern Monetary Theory: workable only while reserve‑currency privilege and low rates last; others see that privilege as already eroding.
Politics, Narratives, and Class Conflict
- Strong criticism of “tax cuts plus programs” populism on both left and right.
- Competing narratives: taxes as necessary price of civilization and equality vs. taxes as confiscation that enable bloated, coercive government.
- Several see anti‑tax rhetoric as a tool of the wealthy to redirect anger toward social programs rather than inequality and corporate welfare.