79-11-A5
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Tax Expenditures[edit]
Transcript[edit]I have always believed that government has no right to a surplus; that it should take from the people only the money necessary to fund its legitimate functions. If it takes more than enough it should return the surplus to the people. In carrying out that policy in California I ran into controversy from some members of the legislature who exemplified the truism that government doesn't tax to get the money it needs, it always needs the money it gets. Trying to get the legislators to return money to the people in the form of a tax rebate was a little like getting between the hog and the bucket. You got jostled about a bit. The last surplus we gave back amounted to $850 million. One angry legislator protested that "giving that money back to the people was an unnecessary expenditure of public funds." There is a new term being used in Washington these days -- "tax expenditures." If you and I used that term we would be talking about things upon which the government spent our tax dollars. That, however, is not what government means. "Tax expenditures" is the name government has for the share of our earnings it allows us to keep. You and I call them deductions. The U.S. government claims it is giving up tens of billions of dollars in tax revenues through some 90 deductions we are allowed to take in computing our income tax. And make no mistake about it, the government has an overpowering urge to shut off those deductions and get that added revenue. One congressman, Sam Gibbons of Florida, says that letting the people take these deductions is the same as if the government had written a check to the taxpayer, subsidizing him. In other words our money is not ours, it is theirs and what we think of as our after tax earnings is really a gift from the government. A deputy assistant treasury secretary says these "tax expenditures receive minimal government control and coordination." Meaning that you and I spend our earnings the way we choose, without government directing us as to how they should be spent. Indeed, the President has proposed a review periodically by Congress to see if deductions should be continued. He told Congress "these programs (meaning the things we do with our money) involve spending money for social goals just as much as direct spending programs." Did you know that your medical expenses, interest on your mort gage, exemptions for dependents and so forth, were "social goals"? Some of the so-called "tax expenditures" include charitable contributions, property tax on your home, state and local taxes on income and sales, social security benefits, pension plans and a host of others. Congress has already eliminated (starting this year) deduction of state and local taxes on gasoline. In other words we will pay a tax on a tax. That will be an additional one-and-one-fourth billion dollars for Washington. All told, our rich Uncle Sam (who wants to be richer) has an eye on about $170 billion that we think is ours because the Internal Revenue Service says it can be deducted when we compute our income tax. It is said Washington could balance the budget if it eliminated these "tax expenditures." I'm sure it could but it sure would unbalance ours. This is Ronald Reagan. Thanks for listening. |
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