Much fiscal policy is implemented, not through spending increases, but through tax credits and other so-called tax expenditures. The markets should respond to them as they do spending cuts, with little contraction in economic activity.
Tax expenditures for middle- and working-class Americans - like the earned income tax credit - aren't thought of as loopholes; they're just thought of as benefits.
Because tax cuts create an incentive to increase output, employment, and production, they also help balance the budget by reducing means-tested government expenditures. A faster-growing economy means lower unemployment and higher incomes, resulting in reduced unemployment benefits and other social welfare programs.
The move to tax Internet sales, clothed as a 'fairness' issue, is the typical 'wolf-in-sheep's-clothing' ploy so often used by governments unwilling to cut expenditures to match revenues. It matters not whether its proponents have a 'D' or an 'R' after their name. It is a tax increase in either case.
Government unions should not be allowed to influence the public officials they are lobbying, and sitting across the bargaining table from, through campaign donations and expenditures.
Expenditures rise to meet income.
Now we are raising the debt limit 3 times, up to $8 trillion, so that our children and our grandchildren will have to pay for the cost of our expenditures.
The construction of a courthouse is a long-term investment in a building where important public business is done. But that does not justify extravagant expenditures. Courthouses should be dignified, durable, and functional. They should not be grandiose, monumental, and luxurious.
There are some tax expenditures that are there for very obvious and very important and very good policy reasons. Whether it's the charitable deduction or the deduction for homes, it's not a loophole.
More people working and paying taxes reduces government expenditures and helps us move a little closer to balance.
