Cut-service Tax Cuts

In recent years, any economic expansion is met by calls for tax cuts. Bush used that long lost surplus of 2000 to, what else, cut taxes. States cut taxes as the economy boomed in the 90s and again in the first years of this century. Many of these cuts were based on the assumption that economic growth would continue in perpetuity . . . or maybe not. Is it possible that tax cut advocates saw an opportunity and used the general public's abiding desire for decreases in tax burden to reduce tax revenue in the long run? What is the result?

Service cuts are now occurring across the board in almost every state, right at the moment when social services are most needed. Why? Well, there just isn’t enough money to fund these programs. What services are being cut? Education is, of course, at the top of the list. Schools will have fewer teachers, fewer resources, larger class sizes and a general decline in quality. Universities (both public and private) are losing funding and thus raising tuition, cutting academic programming and, in some cases, the aid available to incoming students. And early education, afterschool programs and other important services provided primarily to poor children and families are all being pushed out. The end result is a decline in quality of life, as unemployment rates rise along with healthcare costs for all citizens. One can also add declining value of retirement accounts and public pensions and a growing crop of homeless (increasingly populated by those who defaulted on mortgages – emobodied as a dire reversal of the American dream).

The ultimate effect of the “tax cuts in good times and cut services in bad times” cycle is a transfer of social services from the public sector to private organizations. It appears to be a return to the retrograde idea of volunteerism that Hoover once advocated, worsening the early years of the great depression. And, as I previously said, a general decline in the quality of life across the nation for all except those lucky enough to work for Goldman Sachs, JP Morgan or in the remaining hedge funds (and lest us forget the overpaid, underperforming CEOs). The point is tax cuts are legitimated by overly optimistic economic forecasts and then are fortified by a “no tax increase under any circumstance” mentality that, among other things, installed the now least popular governor in the history of California (Schwarzenegger won partially on a $300 tax that had existed for many years but had been rescinded if the budget remained balanced). If they can’t reduce social services and the size of government along normal lines, they back into this approach by holding out their pockets and claiming penury in tough times. This is a troubling trend that works based on a general distaste for taxes in the U.S. that persisted throughout our history, but accelerated dramatically under Reagan and his followers (including Clinton)!