Liberty Expose: The Battle For Taxes In The Republican Party
Alexander Grey
The most interesting debates happen with two people of this sample ideology. They hold the same core values but can argue about the tiny details that are often not discussed when two people do not agree on the basic premise of the argument.
A recent argument between two conservatives argued that Republicans were being irresponsible for not being willing to increase taxes. The debate occurred between Oren Cass, the Executive Director of American Compass, and David McIntosh, President of the Club for Growth, hosted on the Open to Debate podcast.
This discussion looked at whether it is potentially necessary to increase taxes to fix America's deficit. There are, in fact, two factors that can help America quell this looming crisis. The first is increasing revenue, and the other is cutting spending.
Argument
The argument for Republicans needing to increase taxes taken up by Oren Cass is that the current revenue generated by the federal government is insufficient to cover the cost of our current level of spending. The two main proponents of increasing federal government revenue are increasing marginal tax rates and removing various tax loopholes.
The argument against raising taxes has traditionally been the conservative takeaway of the Reagan administration. McIntosh described the fact that when taxes are lowered, it incentivizes more business, innovation, and transactions that the federal government will be receiving taxes on, regardless.
It is also believed that taxes must be cut first before spending can be lowered. The counterargument to this is that our spending habits need to be addressed first before tackling the scope of government.
The main question was whether or not it was necessary to increase the government's tax revenue to afford the current level of spending.
The increased burdens may change the minds of Americans about expensive government programs. While the other argues that the only way to challenge the deficit is to cut taxes in hopes of boosting the economy along with cutting total spending, The core of each argument depends on what needs to happen first.
There are, in fact, two ways for the federal government to have more money. The first is to print or borrow money, which is what they have been doing and leads to inflation, and the other is through taxes. It would be logical that by raising taxes, the federal government would then raise its revenue. However, in actuality, it is not nearly that simple. Instead, it is required to use economic tools, such as the Laffer curve.
The Laffer Curve
The Laffer Curve is an economic theory based on the supply side, created in 1974 by economist Arthur Laffer. The basis of the rule is that if a government has a 0% tax, then the government will collect zero revenue. If the government decides to tax its citizens at 100%, then the federal government will also create zero revenue. This is because no one is incentivized to ever work in the economy and therefore chooses not to.
What is left up for debate is where, in particular, the Laffer curve peaks. At the heart of the discussion between Cass and McIntosh is determining what the ideal tax rate is before beginning to disincentive eyes and businesses and then lowering the potential revenue of the federal government.
The Federal Debt
The massive debt that the United States federal government has accumulated has become a black cloud over our heads that nobody wishes to acknowledge. Recently, the federal debt has surpassed $34.1 trillion. That is a price tag of $101,630 per American.
It would be an understatement to say that this debt is unsustainable. The Penn Wharton Budget Model determined that in roughly 20 years, a miracle will not be able to sustain its growing national debt and ever-increasing spending. The deficit has been created because the federal government chooses to spend way more money per year than it is generating.
The vast majority of government spending is categorized as what is called “mandatory spending." These include entitlement programs such as Medicare, Medicaid, and Social Security, which will account for almost three-quarters of spending or $4.6 trillion in 2023. Just this year alone, the United States government has already spent $1.62 trillion.
Types Of Federal Spending, Fiscal Year 2023
Entitlement Programs
An issue raised in the debate was that neither Democrats nor Republicans are interested in touching any entitlement programs out of fear of backlash from their constituents. This is, in fact, the second factor needed in order to address America's financial debt crisis.
However, it seems that no solution is sustainable unless someone is willing to fundamentally change these programs; otherwise, cutting any other portion of spending will not be adequate to reduce the deficit. The main question was whether or not it was necessary to increase the government's tax revenue to afford the current level of spending.
The increased burdens may change the minds of Americans about expensive government programs. While the other argues that the only way to challenge the deficit is to cut taxes in hopes of boosting the economy along with cutting total spending, The core of each argument depends on what needs to happen first.
Many may be asking whether or not it is even possible for America to sustain a balanced budget after this tremendous hole it has dug itself into. The last time the United States had a balanced budget was in 2001. While this was many years ago, both Republicans seem confident that this is still attainable if I make it a priority.
Regulations
Something that all conservatives can agree upon that was also addressed during the debate between Cass and McIntosh is the extreme regulation put in place in the United States that is making America less competitive with other countries and slowing the effectiveness of our economy. It has been shown that the regulations put on American manufacturing are costing the US economy 3.07 trillion dollars in lost potential revenue. On average, that is an additional $29100 per employee. For small businesses, it is even worse; for companies that have fewer than 50 people, it is $50,100.
This shows the level of difficulty and expense required to manufacture anything in the United States, and many of its regulations are costing the American economy tremendously.
Conclusion
It is often most interesting to hear discussions with two people of similar ideologies discussing possible solutions to problems facing the United States. One of the most looming threats is the ever-expanding federal debt and the misallocation of government resources. Conservatives are concerned about what can possibly be done to address the United States' ever-rising financial burden. Whether it be increasing or decreasing taxes, there needs to be much more attention placed on one of the largest threats facing America.