'Pay for Tax Cuts' Explained

"Biden Tells Crying Baby: You'll Have To Pay For Romney's Tax Cuts?" On a first hearing, without really thinking about it, and stated so matter-of-factly, that line just washes over you as just another nauseating platitude uttered by this ever babbling bit of buffoonery.  But, if you think about it, what does "pay for tax cuts" mean? It’s not easy to immediately make sense of it.

Taxes are receipts. They are monies collected from the citizenry as revenue for the treasury. If we lower them--cut them--that means a decrease in revenue.  How does one pay for a decrease in revenue?  What is Biden really telling the baby? Yes, he's telling a literal baby, but let's face it, most of the people that attend a Biden rally want to be treated like a child of the state, so he's also talking to the figurative ones as well. Does he mean a decrease in services? A Dem? No way. Increase in debt? A Dem? Probably. But this term has been used by more people than just him. I think there's something else to it.

"Pay for Tax Cuts." How does that work?

A company, store, or a household have budgets based on a forecast of expected receipts, expected income. When the income doesn't materialize (for whatever reason), it makes adjustments.  The store isn't entitled to the same level of receipts, quarter after quarter, year after year.  The baker isn't entitled to the passerby, perusing the delights in the front window, to continue to stop in repeatedly to satisfy his Cannoli craving--although, if the baker makes a really fine German chocolate cake, he'll get at least one of those customers!  The baker monitors his receipts closely, budgets his resources carefully, and adjusts as needed. 

Taxes are revenue for the treasury, and given a revenue stream, a responsible government can forecast a budget and expenses, decide what it can afford and what it cannot, prioritize, and make the proper decision; at least that's the way it's supposed to work, like with the baker. But that doesn't help explain how one can "pay for a tax cut".

The use of the phrase is slightly sinister, because I believe it's meant to intentionally deceive.  Especially when it's stated so matter of factly as to make one believe that it must be authentic.  If you untangle it, it's difficult to make "pay for tax cuts" work in a way that really makes sense.  First, "pay" means to outlay cash or some other good for a transaction, a purchase, a swap, etc.  But how does one then swap for a "cut"?

Well, what is a cut?  In the budgetary sense, it's a lowering of the rate of spending (e.g., a cut in Medicare means spending less on Medicare services, a cut in Defense means spending less on Defense services, etc), but here, it's referencing tax, and tax is revenue, not spending.  Ahhh, not so fast. We do, indeed, hear things like, stimulus spent on tax cuts or "too much money spent on .. tax cut", etc., implying--heck, stating--taxes are revenue, and cutting them is spending. That's why the term is confusing. "Tax Cut" can mean reduction of revenue by increasing spending. The revenue is taken for granted by the spenders. They already counted it and spent it before they even collected it.  It's theirs, not yours.  The old phrase "don't count your chickens before they're hatched" never graced the ears of the spender, or more likely, it did, and just was lost as it rattled around inside the head like a stone tumbling down the sides of a vacuous cavern. 

Now, it's coming together, if you believe that taxes are revenue and cutting them is spending. You must necessarily, then, convince yourself that the money an individual earns belongs first to the government, then to the individual, because that’s the only way the government can “pay” the individual.  After people buy this line of deception, "pay for tax cuts" makes sense.  Apply this machination to our baker example, and the passerby better be watchful, otherwise, he'll be clubbed, dragged, forcibly seated, and plied heavily with Cannolis, and he better be damned sure he has his wallet, and it's full of the ever-depreciating greenbacks, or he'll be washing dishes for the afternoon.

We can illustrate this with a simple pie example--in keeping with the baker's theme.  For "pay for tax cuts" to work, all money belongs to the government first, and it's placed in a pie.  Everything is included in the pie, not just taxable income: all income, all money.  Slices of the pie are made: one for Department of Defense, one for Medicare, one for "Citizen," etc. (we'll use this term--Citizen--instead of "Tax Cuts", as that is too deceptive and difficult to keep clear as, I believe, has been shown). The government then gets to decide how to slice the pie and how large each piece will be by how much money goes into each slice.  If money is allocated to/spent on/paid to the DoD slice, that same money cannot be paid to other slices, and these slices decrease accordingly.  This is how we get the "pay for tax cuts" phrase to actually make sense.  "Pay" is taking money from other slices (Medicare, Defense, etc.) and paying it to the Citizen slice.  And for that to work, the money must first belong to the government in order for it to pay (for the tax cut) the citizen. Without putting all of the money into the government pie first and relying on the government to then pay individuals money, there is no such thing as "pay for tax cuts".  Tax cuts are just a decrease in revenue.

So, is the money you earn yours first or the governments first?  How you answer that determines if you should be offended by the buffoon, and if you're one of the babies he's addressing.

Postscript:
There was a word for something like this Pie mentality.  Let's see what was it again: everything inside the state; nothing outside of the state.  I think one of its biggest fans used it, and enforced it, quite frequently. His name escapes me, but I do recall it almost rhymes with Houdini, but he wasn't nearly as charming, though he did make many people disappear.  He was a darling to the progressives of the 20's and 30's. I should ask them.  Surely, they'll remember their history and his name, unless they conveniently forgot.