A Taxing Misconception
Published on 25 Aug 2005 at 12:26 am |
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Filed under Total Quality Madness, Government: Federal, State and Local, Economics and the Economy.
I noticed this article over at CNN Money. It talks about a bi-partisan tax reform panel soliciting suggestions for tax reform. It states that the panel has received most of it’s suggestions on line, but doesn’t give a URL or link… I can’t imagine why, but let that go for the moment.
In the list of examples of suggestions is the old chestnut about having the government merely print more money rather than collect taxes. This is, of course, almost a cliché of economic naiveté, and in some ways a cargo cult idea, but it got me thinking… Let’s not just stop at the surface. I’m not an economist, so maybe someone who is can give me some feedback on this…
A thought experiment:
What if….
We actually did that. Say for example that congress passed an annual appropriation which authorized the government to increase the money supply by a certain figure and merely spend it. Essentially to “just print more” money in the amount of the annual budget.
I suppose that deficit spending being what it is, it could be argued that we already do that. Still, What if…
Would it fit in well with an absolute ban on deficit spending?
Would it increase or decrease popular awareness of the tax burden?
Terrible inflation, certainly, but how bad would it actually be? How would that be related to the ratio of government spending to GDP?
What kind of savings would it bring in regard to the IRS?
The last time I looked at the budget (some time ago) the IRS and the national debt were a big chunk of the Federal budget… to what extent would we see a net savings there?
What about the tax burden? Who would be paying what percentages of their income?
Who would be hurt? Creditors certainly, anybody else?
Would interest rates climb dramatically?
Who would benefit? Debtors, mortgage holders, anybody else?
What would the incentives and disincentives be? Would people be unable to plan for the future?
I’m not proposing it, just wondering. I think sometimes it’s valuable to explore the absurd, you never know what you might find.
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