Comment Re: taxing unrealized gains is problematic (Score 1) 281
Also, if this is the case, then why do they let people go when there is a budget cutback?
Because they don't know where the small sources of waste are, and it takes time to fix them. If you need an immediate reduction right this second, the only thing you can do is surgical cuts, which means laying people off. Fixing the small sources of waste has to be an ongoing process that continues forever, and most of the interesting fixes actually cost *more* money in the short term to save money in the long term.
Why don't they Just stop doing the end of year spending?
They might, if it happens to be at the end of the year when they do the cuts, and if that spending happens to be enough, but most of the time when this happens, they're looking for 30% cuts, not 1%. And finding thousands of fractional-percent cuts takes too long.
Why does service get drastically worse? You do realize that the government already deals with a cut of tax income every year due to inflation and have to make up for that.
Not really, no. Inflation changes the value of the dollar. That means the government's debt also becomes less expensive every year, assuming all else is equal. And inflation causes increases in income, both for businesses and individuals, which means revenue should be increasing roughly proportionally. If it isn't, then that means the tax code is failing to properly capture percentages of actual gains, and this is something that needs to be fixed structurally.
In inflation-adjusted dollars, treasury revenue is going up, at least on average. From 2015 to 2025, tax revenue increased by 18.3%. Meanwhile, assuming Gemini isn't gaslighting me, the U.S. population increased by only about 6.6% in that time. So not only is revenue increasing after adjusting for inflation, it is also increasing relative to the population size after adjusting for inflation.
I can't tell you why service seems to always be getting worse. Maybe it is because we're spending rapidly increasing amounts of money on the most inefficient healthcare system in the first world, driven by a combination of lack of a public option or single payer system, poor auditing of payments, massively delayed payments that cause small healthcare providers to struggle to survive and force consolidation into giant regional monopolies, and probably a lot of other things that I don't know about because I don't work in that field.
When you end up having hyperinflation of your medical insurance costs, it eats a bigger and bigger piece of every other part of the budget. And the federal government is not immune to that.
There are probably other reasons as well. That's just the first one that comes to mind.
Was this 'extra spending' more than the 10% inflation that COVID caused?
This is moot, because as you can see from the chart, inflation-adjusted revenue increased rather rapidly during that same period.