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How Budget Cuts Are Often Indirect Taxes


For those who think that “good government is no government,” Steve Butler in the “San Jose Mercury News” makes some telling points.

Personal Finance, Columns, Taxes, Money

For those who think that “good government is no government,” Steve Butler in the “San Jose Mercury News” makes some telling points. The first of these examples is one many of us are familiar with; an 8.5% cut in the TSA’s budget while air traffic has increased 15%. Even if you were not one of the unlucky folks recently stuck at interminable lines at our nation’s airports, you certainly recall the distressing images splashed on our televisions. This kind of budget cut can be an “indirect tax” on our time and on our equanimity if we are traveling.

Need another example? How about one every doc can take issue with; a 23% cut in the budget of the National Institutes of Health (NIH), whose research translates directly to the improvement of the health of the populace and in making our jobs more effective. Another “indirect tax,” this one potentially on everyone’s health. This NIH budget reduction is doubly foolish considering the relatively small amount of money involved, compared with the 75% of our budget spent on Medicare, Social Security, and Defense.

Want more? How about the Environmental Protection Agency, also directly functioning to protect Americans, being cut by 27% since 2010. Are we now living in that much more of a safe environment? Look at the recent study linking proximity to fracking wells to problems for pregnant women and neonates for a scary example of how much more the EPA has to do. Another “indirect tax” on our health and. ultimately, our pocketbooks.

The most foolish budget cuts have been the 18% reduction to the IRS, Butler says. Now I don’t like audits any more than anyone else, but listen to this. For every $1 spent by the IRS, they retrieve a whopping $6 from tax evaders, mostly the 1%-ers. The “New York Times” estimates that every year Americans do not pay some $385 billion, with a B(!), of what they owe. This tax loss the rest of us get to pay for in yet another “indirect tax.”

If we retrieved 90% of this amount, $360 billion, that represents one-half of our entire Defense budget every year. And our projected deficits would drop by a huge 60%.

Side benefits of enforcing the tax laws would include a greater respect for the law, our government, and prompt more folks to become more law-abiding.

Butler points out that we are currently paying one-half of our historic interest rate on our national debt, which is only 6% of our budget. He says we can certainly afford some rational changes in government activities that directly benefit and protect our citizens. Objecting to this is not rational, it is ideology. A classic “penny-wise and pound-foolish situation.” But don’t expect to hear much about any of this in this whacko election season, I am sorry to say.

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