Let's say we eliminated all welfare spending. Food stamps, Obamaphones, whatever the **** you guys are always whining on about.
We would still have a federal budget. We would all still have to pay taxes. Yes, they would be lower, but now let's see how your tax deduction costs everyone else, and yourself, money.
Two neighbors. Identical incomes. Their collective share of the federal budget is, say, $1000. This means they each owe $500.
But wait. Ted has bought some products for which the government rewards him. He gets a $100 deduction! Woo hoo! "I get to keep more of my money!", exclaims Ted.
So Ted's tax bill is now $400 instead of $500.
But wait. The two neighbors still collectively owe $1000.
That means Ted's neighbor is going to have to make up the difference, or the government is going to have a $100 deficit.
See how that works?
Your tax deduction comes out of other people's pockets.
But it also comes out of your own. How?
Well, to get more money out of Ted's neighbor, Bernie, the government obviously has to raise Bernie's tax rate.
But hold on a second. Ted and Bernie earn identical incomes, remember? So that means Ted's income tax rate goes up, too.
So the government raises taxes by five percent.
Now, instead of owing $500, Ted and Bernie each owe $525.
After taking out his $100 deduction, Ted pays $425.
Has Ted actually gotten to keep $100 of his own money? Nope. Because his tax rate is higher, he really only made $75.
And his neighbor Bernie is paying $25 extra on his taxes because of the higher tax rate. Thanks a ******* lot Ted!
But the budget is STILL not balanced. $425 + $525 is $950. So we have a $50 deficit.
And that is how the current system works. Higher tax rates and deficit spending.
But it gets worse. The MID is rolled into the price of Ted's house. He is paying more for his mortgage because of the MID. So Ted's big tax deduction is actually zeroed out by higher home prices and higher tax rates.
Ted believes the gigantic lie that he is getting to keep more of his own money. BWA-HA-HA-HA! The perfect con. The rube doesn't even know he's been taken and thinks he came out ahead!
The people who are ACTUALLY making out are the people who benefit from higher home prices: builders, real estate agents, brokers, and bankers. That's one of the big reasons the real estate lobby spends $133 million a year on cash contributions to Congress and lobbying. They make a $96 billion profit. Thanks a ******* lot Ted!
And not only that, Bernie is subsidizing Ted. He is paying $525 in taxes instead of his fair share of $500.
And not only that, we have an insane system where two people earning identical incomes are paying radically different tax rates. Bernie: $525. Ted: $425.
So, yeah. That "getting to keep more of my own money" thing is a $1.2 trillion lie.