Always Record Revenue, Always a Shortfall


Doesn’t it always seem that government spending goes up and up, and yet officials always claim it’s not enough?  Andrew Malcolm notes that… umm… paradox on HotAir:

According to the Census Bureau, last year alone state and local governments collected a record $573 billion just in property taxes. That’s about $1,759 for each one of the estimated 326 million Americans.

Add to that another record — $386.2 billion — in sales and gross receipts taxes.

And another $405 billion in income taxes.

That’s almost $1.4 TRILLION. Quite a haul for governments. And yet, as the Wall Street Journal reports (subscription), state and local governments are hiking taxes and fees even more, claiming budget crunches.

The bottom line, I’d say, is that we’re just trying to undertake too much of our society’s activity using government.  Even if they are supremely capable and well meaning, those in the public sector are given broad goals and also have to factor in institutional sclerosis and corruption.

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Because the goals are both mandated by law and generally unbound by targets or metrics, resources will always be drawn away from their intended use.  And because the people who supply the resources aren’t typically the first beneficiaries of the programs and don’t really have a choice on an individual basis, the business model must be to find ways to pry out more.  The paying customer isn’t being persuaded that he or she should spend more for something, but rather, is being told that government has no choice but to take it.

It’s difficult to imagine an activity in which these features would actually make things happen more efficiently, so they should be considered an inevitable drag outweighed by some other problem, like free riding when it comes to national defense.  At this point, our sense of that balance is way out of whack.

  • guest

    Based on a few random “facts” about tax revenues without any context you are able to conclude that “we’re just trying to undertake too much of our society’s activity using government”. Maybe that works playing to your base, but based on your own link it’s a 1.5% increase, less than inflation. Oh, the humanity!

    • Justin Katz

      Well, no. The statement about undertaking activity with government is based on much more than what’s contained in just this post, which presents just a symptom. Also, seems to me you’re doing the math wrong on your percentage.

  • Justin Katz

    $22B is just the property tax piece. And $1.4T is the number after the increase, not the base to which the increase was applied.

    • guest

      Thanks, I stand corrected (it’s 3.8%). Again, without any context about growth, new property development and value appreciation the numbers are meaningless.