Federal Taxes Have a Good Side Too

Dec 28, 2017 / Amanda Chase, Horsesmouth Editorial Assistant

Things are different today. There doesn’t seem to be as much room in the public conversation for the benefits that federal taxes bestow, such as Social Security, Medicare, Medicaid (nursing home funding), and the Part D prescription drug benefit for retirees, or for government investments in education, roads, and research—or about who would suffer more if deprived of these benefits.

It might be more accurate to say we sometimes take our social programs for granted. After all, Congress passed Medicare way back in 1965, when baby boomers were in grade school or high school. The automatic annual cost-of-living increases for Social Security started in 1975—the program was initially signed into law way back in 1935. The bottom line: We value our benefits, but paying the price is a different matter. Indeed, three out of four Americans in a 2011 Gallup poll said the federal government “is spending too much on government programs.”

Lawmakers and others have legitimate concerns about the increasingly expensive Medicare and Social Security programs, which are running long-term financing shortfalls. This brings us to the tax cuts winding through Congress now. Proponents advance a “supply side” argument: Lower tax rates will put more money into investors’ and businesses’ hands and generate sufficient economic growth to offset the cuts.

But to the extent that the cuts increase the federal deficit, they will increase the pressure to curb Social Security and Medicare spending. Perhaps the risk of reductions in these middle-class programs will shift the narrative back to more appreciation for how taxes, while unpleasant, benefit our lives.

Read the full article at Squared Away Blog.

 

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