Taxes

Tax Day Is Here, Because Government Bungling Won't Pay for Itself

If you resent government incompetence and malice, maybe your devalued dollars will buy less of it.

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In recent weeks, the Centers for Disease Control and Prevention (CDC) conceded that, perhaps, the agency really sucks at performing its assigned tasks and should reevaluate how it does things; a federal jury told off the Federal Bureau of Investigation (FBI) for entrapping a handful of dummies into a high-profile political kidnapping plot; and several of the federal government's own economists placed the blame for soaring prices on runaway government spending. That's some impressive governance, for a certain value of "impressive," and it certainly doesn't come cheap. In fact, on this Tax Day, some of us might be forgiven for wishing we could skip not just the tab, but also the services for which it's supposed to pay.

It's no joke that government doesn't come cheap. In revisiting its federal spending and revenue forecasts for 2021, the Congressional Budget Office conceded in January that its "projection of $3.43 trillion for federal revenues in 2021 was too low—by $614 billion" and its "projection of $7.07 trillion for federal outlays in 2021 was too high—by $250 billion." Not that taking in more money than anticipated and spending a bit less means the feds balanced their books. No, not even close. In the end, the feds spent "only" $2.78 trillion more than they collected. And they do that every year, so it adds up.

"How did we end up with $28.43 trillion in federal debt?" the U.S. federal government's DataLab helpfully asks of the figure at the end of 2021. "It is similar to a person using his or her credit card for a purchase (rather than cash, check, or a debit card) and not paying the full credit card balance each month. Over the years, if the federal government experiences more deficits than surpluses, the federal debt grows." 

Debt is up by $12 trillion since the end of 2019. That means the federal government had a serious spending problem even before the demands of the pandemic, understands what it's doing wrong, and keeps doing it anyway. So, yeah, government is expensive.

What we're told (by government fans) that we'll get in return for that rising credit card bill is an institution that can competently coordinate resources, reliably enforce laws, and at least not inflict more harm than good. But year after year, that keeps proving to be too much of an ask, especially during a crisis when government is supposed to demonstrate its value.

"Centers for Disease Control and Prevention Director Rochelle Walensky announced plans Monday to revamp the agency that has come under blistering criticism for its performance leading the U.S. response to the coronavirus pandemic," The Washington Post reported April 4. "Since the pandemic began more than two years ago, the once-storied agency has been under fire for its pandemic response, from initial delays developing a coronavirus test, to the severe eligibility limits to get the test, to missteps often attributed to Trump administration meddling. But even under the Biden administration, the agency's guidance on masking, isolation and quarantine, and booster doses has been repeatedly faulted for being confusing."

Unsurprisingly, pandemic policy is a big deal when a new virus makes its way across the globe and your agency's name is "Centers for Disease Control and Prevention." But it wasn't just the federal government that dropped the ball in coordinating the response to COVID-19. State governments angered the public with intrusive and often arbitrary policies that officials frequently enforced only against the common folk while flouting themselves. Some folks were so enraged that they planned revenge against the governor of Michigan for her heavy-handed policies. Or did they? Jurors weren't impressed by the prosecution's case; they acquitted two alleged conspirators and failed to reach verdicts for the other two.

"Prosecutors built their case on a trove of audio recordings and encrypted texts from 2020 in which some of the men vented about Covid-19 restrictions, spoke about political violence and debated the best way to kidnap Ms. Whitmer, a Democrat, from her vacation home in northern Michigan," noted The New York Times. "Yet the very existence of those recordings and text conversations underscored defense lawyers' theory of the case: that the supposed plot had been conceived and nudged ahead by a network of F.B.I. agents and informants who preyed on the worst instincts of their loose-lipped targets."

That federal agents would lure people into a government-crafted criminal plot becomes even more plausible when you realize they have a history of doing exactly that

"Practices including the use of confidential informants, undercover operations, and entrapment are part of the history of surveillance operations conducted by U.S. law enforcement," Oxford University's Sara Kamali pointed out in a 2020 article on the treatment of right-wing activists and Muslims by the FBI and the New York City Police Department. "Providing incentives to recruit informants, pitting community members against each other, and wielding egregious entrapment tactics, threatening a myriad of charges from immigration violations to tax fraud, to justify the war on terrorism make up the reality of how terrorists are created and caught in the post-9/11 world."

It must be even more galling for Americans set-up by the powers-that-be to know that they paid for the experience with their tax dollars. Of course, the dollar doesn't buy as much entrapment as it used to. Inflation has eroded the purchasing power of our money, causing pain for Americans even before they sign their 1040 forms and pay their share of various agency budgets (and interest on the debt!).

"Over the last 12 months, the all items index increased 8.5 percent before seasonal adjustment," the U.S. Bureau of Labor Statistics reported on April 12. That's "the largest 12-month increase since the period ending December 1981." Especially hard hit were food, which suffered an 8.8 percent increase, and energy, which soared by 32 percent. And yes, you can thank the feds for the economic pain.

"Since the first half of 2021, U.S. inflation has increasingly outpaced inflation in other developed countries," wrote Òscar Jordà, Celeste Liu, Fernanda Nechio, and Fabián Rivera-Reyes, economists with the Federal Reserve Bank of San Francisco, in a paper published at the end of March. "Estimates suggest that fiscal support measures designed to counteract the severity of the pandemic's economic effect may have contributed to this divergence by raising inflation about 3 percentage points by the end of 2021."

As Reason's Veronique de Rugy pointed out, "Over the course of the pandemic, the Treasury Department issued roughly $6 trillion, $2.7 trillion of which was monetized by the Federal Reserve. Americans were sent $5.1 trillion through various programs, including individual checks and unemployment bonuses." Lockdowns and social-distancing orders interrupted production, she added, and the flood of money "greatly inflated demand for the durable goods still being produced."

On the plus side, if you resent the incompetence of the CDC, the peril posed by the FBI, and the overall damage inflicted by the federal apparatus, devalued dollars may buy less of such government (though borrowing will probably account for the rest). That's cold comfort, but it may be the only kind available on Tax Day.

NEXT: States Are Flush With Cash

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  1. One other good point about inflation: In a year or so, $30 trillion in debt will be about the same as a loaf of bread and I'll be able to pay off the national debt all by myself.

    1. Don't worry about your retirement savings becoming worth nothing either. As long as you keep that social credit score high, you'll get a little UBI to make up for it.

      1. Soylent Green New Deal.

        1. By the people, for the people, of the people.

          1. It's all to serve humans.

            1. They’re not quite human, but if push comes to shove, we might have to serve democrats to get by. Although my preference is to harvest their organs for sale, and then use the proceeds to buy more seed and agriculture supplies.

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            2. “It’s all to serve humans”. Consider it a cook book: Star Trek

    2. Just 30 one-trillion-dollar coins, no big deal.

      1. C’mon now, that’s just silly.

        It’ll be just one coin for 50 trillion and we’ll pocket the change!

  2. "It is similar to a person using his or her credit card for a purchase (rather than cash, check, or a debit card) and not paying the full credit card balance each month. Over the years, if the federal government experiences more deficits than surpluses, the federal debt grows."

    Except the federal government only pays interest.

    1. IF they have more deficits than surpluses?
      They ONLY have deficits.

      1. There were surpluses, most recently with Bill Clinton, and what did the next president, Bush, do (after stealing the election with the help of his brother, the gov of Florida)? Cut taxes massively for the wealthy, and the debt SKYROCKETED.

        1. Actually, no, Bill Clinton didn't run surpluses. His budgets were cushioned with bond-buying by Social Security, which is obligated to take its annual surplus (money paid in from wages, entered as FICA or OASDI, minus money paid out in benefits) and buy government securities. Thus, the amount of debt held by the public in the form of various government obligations goes down, but the debt owed to the national insurance company goes up --- and the result is that the deficit grows.

          Soon that dodge won't be available, as Social Security has to pay out more annually than it takes in and will start redeeming the special government bonds it holds. As of the end of 2021, it was still running a 10% surplus, but that will diminish each year. When it goes through zero, the intergovernmental debt will go down -- but the national debt will go up.

          The national debt, properly reported, was $5.413146T in FY1997 and $5.807463T in FY2001, an increase of $394.317B. That's $98.57925B per year -- very, very good, but still not a surplus.

  3. Debt is up by $12 trillion since the end of 2019.

    Check your math, you're comparing "total debt" in 2021 vs. "debt held by public" in 2019.

  4. Sigh....Can we talk tax law complexity for a moment?

    It is fucking ridiculous. I did the standard deduction (stopped itemizing after 2017 tax law passed - thank God!), and even using TurboTax, it was dicey. The level of complexity in the tax code is dizzying. It is insanity.

    Memo to Congress: Just make the tax law simpler. Please!

    1. The tax code is Congress' favorite way of divvying out favors. Exempt this, credit that. It will always be stupid complicated for that reason.

    2. How many IRS agents passed a competency test on their own policies...?

      1. Randomly select two IRS agents, and isolate them separately. Provide them each with the same sample taxpayer input, access to the tax code and forms, and a calculator. Give them each a day to fill out the return. If, at the end of 24 hours, the bottom line on each of their forms is not *identical*, fire them both. Repeat until all agents have been "tested".

        This, of course, should also be done with congresscreatures.

        1. There are so many conflicting and contradictory rules that it would be a wonder if two agents came up with the same results on anything other than a simple return.

          1. I assume that's kind of the point. Eventually you would end up firing all of them. It's a nice thought, but unfortunately if there's one thing government bureaucrats are good at it's protecting their phony baloney jobs.

            1. Upon reflection, perhaps a faster way to improve the code might be to require every congressional candidate to do this drill after all have filed to run. If their results are not identical, no one is eligible to run.

              It used to be suggested that Election Day be the day after Tax Day, but what with early voting and mail-in ballots this is probably less dramatic.

  5. You can't write and accurate article on pandemic spending by the federal government - supported by both parties and including the loser Trump who from the peanut gallery urged a $2000 per taxpayer check vs the $1600 that was passed - without noting what it was intended to do for the economy, which it did, though by too much this time.

    "It was the early 2010s. The global financial crisis had become the stuff of history books, and the recession it had caused was long over. But the United States economy was still haunted by a series of chronic, interrelated problems: too little spending by consumers and businesses; too few jobs; and too-low inflation.

    The result was an economy that functioned below its potential for years, with grave human costs.

    Last year, when the government sprang into action to respond to the economic crisis caused by the coronavirus pandemic, it was with these experiences in recent memory. Key policymakers in Congress, two presidential administrations and the Federal Reserve were determined to avoid repeating missteps that had prolonged the problems of a decade ago.

    The good news is they succeeded. The bad news is that it increasingly appears they were, in key respects, fighting the last war. Their focus on the challenges of the last crisis has fueled some of the challenges of this crisis.

    A decade ago, the government spent too little money to keep Americans’ incomes from plunging. This time, the government pushed enough cash into the economy that incomes rose above their prepandemic trend, and households have, on average, bolstered their savings.

    In that crisis, state and local governments, which didn’t get much in the way of bailouts, were a drag on the economy for years. This time, their bailouts are so expansive that many states are deciding what to do with record surpluses....."

    https://www.nytimes.com/2021/11/15/upshot/pandemic-economic-response.html

    Of course it is human nature to often focus on the fuck ups without noting the successes, but to learn from the past from studying it, instead of just creating propaganda, we should expect better from writers like this one.

    1. Hard to focus on success when there isn't anything to note.

      Because every good thing Biden did was either A) backing off from a stupid idea or, B) a rebranded Trump policy.

      Also worth noting that last year's taxes were absolutely fucked by virtue of Pelosi fighting Trump's stimulus tooth and nail until Biden could put his name on the cheque, which meant manually amending those returns by the closed-for-Covid IRS, resulting in a backlog that still has not been cleared.

    2. "This time, the government pushed enough cash into the economy that incomes rose above their prepandemic trend, and households have, on average, bolstered their savings."

      Do you really think that is a core function of the federal government?

      1. Well, he is an idiot.

    3. They call is stormy Monday
      And Joe Friday's just the same.

    4. But the United States economy was still haunted by a series of chronic, interrelated problems: too little spending by consumers and businesses; too few jobs; and too-low inflation.

      All problems created/exacerbated by government.

      Last year, when the government sprang into action to respond to the economic crisis caused by the coronavirus pandemic

      The coronavirus pandemic had zero economic impact. The economic crisis was caused by absurd government policies in response to COVID-19.

      A decade ago, the government spent too little money to keep Americans’ incomes from plunging.

      Government spending always causes Americans' incomes to plunge relative to what they would be in a free market; this year, it was so bad that incomes plunged by 3% in absolute, real terms as a result of government spending.

      1. "The coronavirus pandemic had zero economic impact."

        I would argue it has exactly as much impact as the flu; sick people call in to work. There's a national blip every seasonal shift and then we get on with it.

    5. One thing all you leftards on here have in common.
      Bow down and worship those Gov-Guns FORCING slavery upon the people...

      F'en Nazi's never learn anything.

  6. "It is similar to a person using his or her credit card for a purchase (rather than cash, check, or a debit card) and not paying the full credit card balance each month. Over the years, if the federal government experiences more deficits than surpluses, the federal debt grows."

    No, its not.

    Government spending is similar to a person who prints money on their home printer whenever they want, and has the power to make all vendors accept these clown bills for all purchases.

    1. ^THIS +1000000

  7. Cut. The. Fucking. Spending.

    1. But reparations and equity and unions, oh my!

    2. We need to add “or else” on to that. It’s the only way things will get done.

  8. What we're told (by government fans) that we'll get in return for that rising credit card bill is an institution that can competently coordinate resources, reliably enforce laws, and at least not inflict more harm than good.

    Anyone who believes that shit is a fucking retard.

  9. If I could change just one thing to rein in governments, it would be this:
    * Everything proceeds as now, as far as spending bills, tax policy, etc.
    * But when you fill out your tax form, you can limit your contribution to specific agencies, departments, etc.
    * No agency, department, etc can spend more than it was budgeted for.
    * Any agency, department, etc surplus is returned directly to taxpayers, at IRS expense.
    * Any agency, department, etc shortfall results in firing as many employees and shutting down as many offices as it takes to balance their budget for the remainder of the current year. Sure, they can be rehired next budget. But they must be fired now, even if only for one day.

    1. Some people would take their 1040 allocations seriously, especially trying to make up for those who will short as much as possible.

      Some, like me, would purposely pick the smallest, most idiotic agency possible, hoping to overfund it by a factor of 100, shorting as many other agencies as possible.

      Governments would naturally react by cramming all the unpopular agencies together, trying to prevent any small idiotic agencies from existing in isolation. The definition of the listed agencies would be simple: every officer nominated by the President and approved by the Senate has to be listed separately for 1040 allocation. Some, like deputy undersecretaries, would be redundant; their funds would be lumped in with the secretary's. But everyone else could be a 1040 choice.

      1. Some people would take their 1040 allocations seriously

        but most would go with the Standard Funding.

      2. This does not sound like a solution so much as a vote for Giant Meteor.

        1. But now with more ticky boxes!

    2. Just take the proposed total spending for the year and divide it by the number of adult American citizens. Then send everyone the same bill.
      That would be completely fair, and make people somewhat more skeptical of proposals to increase spending.

  10. What the IRS doesn’t know won’t hurt them.

    1. What the IRS doesn't know won't hurt me; everything the IRS knows will be used to inflict the maximum fiscal pain on me.

  11. repeal the 16th.

  12. It always gets more insulting because a lot of higher ups in government love to insinuate that folks aren't paying their fair share of taxes. The push by Warren for an expanded IRS shows this.

    Every study I've seen actually shows that Americans are quite honest about their taxes. There are errors (our code is complicated) and there is a shadow economy (but less than almost every country in the world that I'm aware of) but we're actually pretty open an honest about our earnings and following the rules.

    Why does this line of argumentation work? I don't know. It must just feel good for folks with an external locus of control to feel that someone, somewhere, is not joining in quite hard enough.

    1. "but we're actually pretty open an honest about our earnings and following the rules."

      Well, there is one clear exception hiding the majority of his family income behind S-corps while claiming to be "transparent". He happens to be among the hypocrites crying for "paying your fair share" while dodging over half a million in payroll taxes.

      1. I'm guessing you're complaining about... Biden maybe? Trump? Warren? I don't know. I apologize.

        But, I think the point still stands. That some people do wrong in a country of 330 million people is to be expected. Every study I've seen posits the amount of failed taxes to be quite low across the entire nation.

        1. I'm guessing Warren Buffett.

  13. Federal tax receipts won't pay for federal spending either.
    There appears to be no political will to raise taxes over 4 trillion, or to cut federal spending below 6 trillion (maybe 7 now).
    COVID gave them the excuse to disconnect spending from taxes. They always ran deficits before, but there was political pressure from the voters to keep the deficits within normal parameters (500 billion or so). Now everyone just wants their stimulus checks and industrial support payments and paycheck protection programs and the like.

    1. M2 is currently at 21 trillion. An annual shortfall of 2 trillion amounts to an inflation rate of about 9%, which is what we are experiencing.

  14. If you resent government incompetence and malice, maybe your devalued dollars will buy less of it.

    I also resent the organizations and people who supported this malicious and incompetent government over the alternative, like Reason and its editors.

    1. What alternative?

      1. Getting the people to demand a USA (per the U.S. Constitution) instead of a Nazi(National Socialist)-Regime...

  15. Yes, there's plenty of corruption. We have the gov't WE created and voted for. Don't like it? Do something more than complaining/bitching.

    1. But the government in office was not voted in by the people. Because corruption.

  16. Tax Day for many = HUGE STOLEN 'other' people's $ subsidy check.

    Deceitfully named Earned Income Credit; humorously being lazy, incompetent, making life choices like 5-yr old qualifies as *EARNING* in that Nazi-Regime bill.

    Now; why wouldn't receiver of stolen goods keep voting to steal goods that others have created? Voting for other people's belongings is far easier than working, producing or creating them.

    Remember once upon a time the USA was about Individual Liberty and Justice for all... It wasn't about [WE] gang armed theft.

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