Senator Rick Scott of Florida has proposed an 11-point economic and social plan called Rescue America. Kudos to Scott for detailing where he stands, which contrasts with the Senate GOP leader who won’t tell us his priorities until after the next election.
However, one of Scott’s proposals is raising eyebrows: “All Americans should pay some income tax to have skin in the game, even if a small amount. Currently over half of Americans pay no income tax.” It appears that the senator is proposing to raise taxes.
Scott explained further in an op-ed last week: “[T]he federal government has figured out how to disconnect many Americans from fiscal reality.” The politicians “give away money borrowed from your grandkids, get re-elected, and never pay a penalty for their irresponsibility … Part of the deception is achieved by disconnecting so many Americans from taxation.”
The senator is describing a political strategy called “fiscal illusion.” Ideally, lawmakers would carefully evaluate, and discuss with the public, the full costs of proposed spending programs. In practice, however, lawmakers use techniques to hide costs, which lead the public to demand too much government because the “price” appears artificially low.
Here are some of the techniques of fiscal illusion, beginning with the tax and debt methods mentioned by Scott:
Read the rest of this post →