Spending Future Tax Receipts

Don't ask me what I want it for
If you don't want to pay some more
--The Beatles

George Reisman discusses an increasingly popular tactic by big government types. The tactic is often framed something like this. It is assumed that $X in taxes will be collected from some entity Y at some point in the future. So, let's just go ahead and treat those future tax receipts as if they are already collected.

Subsequently, if some fraction of those $X taxes are not collected, then it is 'costing' the government money. The government is 'giving' Y a tax break. Or, perhaps more appropriately as seen thru this lens, it is gving money to Y that is rightfully the government's.

Reisman calls this 'tax expenditures.' Essentially, it is treating future tax receipts as if they were current assets.

We see this approach employed in various contexts. When the president or Congress talk about 'spending cuts,' they are usually not talking about cuts at all. Instead, they are talking about reducing the rate of future government spending from some previous level determined by estimating future tax receipts. Tax reductions are therefore seen as 'expenses' (e.g., 'spending on tax cuts').

Recently, I read an argument that profits of US-based corporations residing in tax-sheltered overseas accounts should be forcibly repatriated because those funds are 'our money.' No, the money is the property of someone else, and that someone is seeking to preserve it from confiscation.

Reisman notes that reducing spending truly means reducing the amount of money the government takes in. Reducing the amount of money the government chooses not to take in is the same thing as an increase in taxes.

Only when government spending is limited to its core function of helping people defend themselves against aggression does the freedom of citizens improve. As freedom to spend one's own earnings increases, so does standard of living.