The Gap Between Tax Revenues and Government Spending
A bicyclist rides through the plaza on the east side of the U.S. Capitol. Photo by Chip Somodevilla/Getty Images
Paul Solman frequently answers questions from the NewsHour audience on business and economic news on his Making Sen$e page. Here is Friday’s query:
Name: Maggie Van Ess
Question: If the banks paid back the taxpayers’ loans used to bail them out, why are we continuing to cut services the taxes were for?
Paul Solman: Because the bank money is a pittance in the overall government budget, a small fraction of our annual deficit, which tallies the yawning gap between tax revenues and spending. (The U.S. collects the fourth lowest taxes, as a percentage of the economy, of all the 34 OECD market-based countries. Only Turkey, Mexico, and Chile tax their people less.)
Bottom line? Like most people pretty much everywhere and pretty much always, Americans want government services but don’t want to pay for them. Unlike most governments in the world these days, however, ours gives the people what they want.
This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions