Taxes And That Other Thing

What’s the national equivalent of a $28 lunch?

The system is broken. Really, really broken. Ya, I could be talking about anything these days, so let me narrow it down. The government.

Ok, still a little vague. Taxation and spending. Better?

Government spending is out of control, and if there’s a political party anywhere in the world that claims to be concerned, I guarantee it isn’t in power. Parties only care about government spending when the other side is doing the spending.

How bad is it?

Here’s a chart for a few countries:

Ya, that doesn’t mean much to me either. Let’s try it a different way.

Every single major anglosphere country spends more than it collects in taxes. This means that “Interest as % of Revenue” will continue to increase until we’re all paying taxes just to cover debt payments.

Makes you think the Zoomer $28 lunch crowd is running these countries, doesn’t it?

Just kidding. I’m sure they’ll all blame the Boomers.

The truth is that we’re all to blame because we don’t seem to care enough to elect responsible governments.

Or it would be our fault if it were possible to vote for a party that’s serious about balancing the budget.

Which brings us back to the problem; most parties aren’t concerned with balancing the budget, or if they claim to be, their concern quickly vanishes when they’re elected.

Why?

Because their job is to get and stay in power, and you don’t do that when most of the electorate gets more out of the system than they pay into it.

Want a guaranteed losing election slogan? “We’re going to cut your benefits.” Good luck with that one.

Oh, both sides have “solutions.” Here are a few “interesting” ones floating around lately:

1. Don’t make seniors pay property tax – US, Florida, and British Columbia

2. Tax “the rich” – too many to list

3. A “wealth” tax – too many to list

4. Tax second homes – Hawaii, NYC, others

5. Cut senior benefits

6. Increase corporate taxes

7. Tax AI

My favorite by far is tax AI because it means one of two things, politicians think robots will be receiving salaries, or that you don’t know that this is simply another way of saying “increase corporate taxes,” which as we all know – or at least those of us with basic thinking skills know – means tax the consumer because corporations never eat taxes, they simply increase prices to cover them.

Like they do with tariffs.

Of course, it could be worse; “tax AI” could simply be another call for communism.

Or maybe that’s MAGAism because the government nationalizing private companies sounds an awful lot like something “The Donald” would get behind. Especially since he’s already done it.

The fact that Democrats want to increase corporate taxes and Republicans, or at least the MAGA strain, want to increase tariffs is simply an admission that neither party wants to cut benefits.

The cry is always, “if taxpayers would just pay ‘a little’ more, it would all be fixed.

Would it, though?

It seems that the government spending has been increasing since... well, since they first decided that a “selective” income tax would be useful.

Let’s get one thing out of the way: the rich already pay their “fair share.”

Unless by “fair share” you mean “enough to snuff out the flames of jealousy that rage in my heart” — in which case I’m going to need you to put a number on “fair share.”

Here’s another thing to keep in mind, you already pay your fair share, too, at least if you’re contributing more than you’re getting in benefits.

Cheer up, America, you have it easy compared to the rest of us.

The big question is, if we can’t trust politicians to get spending under control, what will save us? Great question. All that we need is strong leadership willing to tackle difficult questions.

In other words, we’re screwed. Ok, that’s a bit harsh. Let me rephrase.

Given that politicians now bribe the electorate for votes – either by cutting taxes or spending increases - the financial issues that each country faces will not be addressed until politicians have no other choice but to raise taxes and/or cut spending.

This will happen when we face a national fiscal crisis due to a “Fiscal Crisis Spiral.”

Sounds pleasant, doesn’t it?

Here’s what a typical sovereign debt crisis looks like:

1. Government runs persistent deficits.

2. Debt grows.

3. Interest payments grow.

4. Investors demand higher interest rates.

5. Interest costs grow even faster.

6. Investors become worried about repayment.

7. Borrowing costs spike.

8. Government can no longer refinance existing debt.

9. Default, inflation, austerity, or a bailout follows.

There’s no clear indicator that one is pending, but there are warning indicators.

Here’s a “report card” for each country today.

Here is each county’s risk of a fiscal crisis and when we should expect one to occur based on current fiscal trajectories.

Things look pretty grim for the US if one can believe the economic data. To sum up, we have three choices: raise taxes, cut spending, or wait until there’s a crisis.

Lay your bets! My money is on a fiscal crisis. It’s not all terrible news, though. Taxes may be a certainty, but so is one other thing.

Yep, the glass is half full: there’s a chance you’ll be dead before anything truly bad happens. Maybe a $28 lunch isn’t such a terrible idea after all.

About the Author

Phil is a freelance writer, Canadian Navy veteran, and classical liberal. He has lived and worked in both Canada and the United States and currently resides in Vancouver, British Columbia, where he writes on politics, individual rights, free speech, and whatever else catches his fancy.

📰 Hoist the Black Flag — politics, rights, and free speech
😄 Schrödinger’s Chicken — because sometimes you just need to laugh

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