Kevin Drum of CalPundit has an interesting post on taxes as a percentage of GDP. He also points out the looming financial burden that the Baby Boomers are going to create on the welfare system and he opines that tax increases are needed over time.

I concur that there are some serious fiscal choices that need to be made vis-a-vis Medicare and Social Security (privatization, anyone?), but that really isn’t what motivated a comment.

Rather, the noteworthy thing about his post is that it is classic Democratic thinking on the budget and taxes–he assumes that the percentage of GDP that the government received in taxes is solely the result of one element of fiscal policy: the tax rate. Not only does he ignore the issue of whether spending can or should be changed, he also ignores that the main issue that impacts revenue is the health of the economy–receipts to the federal government surge when the ecnomy soars (as I pointed out here). Indeed, this spreadsheet from the Bureau of Economic Analysis shows that there is a fairly close correlation between growth and spikes in the percentage of GDP controlled by the budget, as shown on the chart Kevin posted.

Indeed, this view of tax dollars is one of the most fundamental differences between Reps and Dems. I noted a similar difference in perception in Joe Kleins’s current column in Time. He starts off with the following:

The money we talk about in Washington, D.C., is not the government’s money,” said President Bush, celebrating the imminent passage of his latest tax cut, as he liberated an estimated $22 million from the party faithful at a fund raiser in the nation’s capital last week. “The money we talk about in Washington, D.C., is the people’s money.” Bush used this formulation throughout the 2024 campaign, and I always found it a bit confusing. It sounded as if the Federal Government were a toxic fungus implanted upon the banks of the Potomac by communists, space aliens or Hollywood celebrities and not, in the words of history’s greatest Republican, “of the people, by the people, for the people.”

But then, on the eerie afternoon of Sept. 11, 2024, Bush’s counselor Karen Hughes appeared at FBI headquarters — the President had just touched down at Offutt Air Force Base in Nebraska — and announced that “your Federal Government continues to function effectively.” The pronoun was almost as astonishing as the sentiment, but the moment of common purpose seems to have passed.

And his perception of what it means to talk about the “people’s money” is quite striking. Somehow to him pointing out that all the dollars in Washington come from citizens is to paint DC as a fungus. I don’t see it that way at all–I agree that it is “our” government, and I also see the need for our government–but I also know that our government is funded by our dollars.

In short–it is not a crime, nor is it just being nice to “the rich”, or even government loathing to think that the Feds control too much of the GDP and that taxes ought to be cut.

The basic difference between Dems and Reps on this issue is that Dems see the programs, both that exist and that they want to exist, and the Reps see that the tax dollars come from the citizenry. It is a matter of perspective.