The idea that federal taxes pays for stuff, and the very concept of “a taxpayer” and “taxpayer money,” is both plainly inaccurate and built upon an historical foundation of white supremacy. Unambiguously so. It also actively sabotages what is desperately needed by millions upon millions of those at the bottom. This post contains confirmation of the above assertions, plus statements elaborating on why the idea is flawed and troubling.
The truth is that all federal spending is money creation and all federal revenue is money destruction.
- Many examples of the hateful using the idea of “taxpayer money” to withhold from those they hate.
- If federal taxes don’t pay for anything, then why do we pay them?
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Disclaimer: I am a layperson who has studied MMT since February of 2018. I’m not an economist or academic and I don’t speak for MMT. The information in this post is my best understanding but I don’t assert it to be perfectly accurate. In order to ensure accuracy, you should rely on the expert sources linked throughout. If you have feedback to improve this post, please get in touch.
Here are many examples of how this false idea is used by the privileged – whether they know it or not – to withhold from those with less, and by the hateful to withhold from those they hate.
(Taxes do indeed pay for stuff at the state and local levels. But not federal. Federal taxes are important, just for very different reasons than we have been told.)
First and foremost
…tax policy and taxpayer identity were built on the foundations of white supremacy and intertwined with ideas of whiteness. From the origins of unequal public school funding after the Civil War through school desegregation cases from Brown v. Board of Education to San Antonio v. Rodriguez in the 1970s, this study spans over a century of racial injustice, dramatic courtroom clashes, and white supremacist backlash to collective justice claims.
(Here is my January 2020 interview with Camille: parts one and two. Here are two more interviews with Camille, one recorded in July 2020 by Historic-ly, and another in August 2020 with Macro and Cheese.)
Although written a year before, here is an excellent (essentially) summary of the above book by Raul Carrillo (chairperson of The Modern Money Network) and Jesse Myerson: The Dangerous Myth of ‘Taxpayer Money’. From the article:
…by using the “taxpayer money” frame, they were spreading, however unwittingly, a racist, sexist, classist myth. Although most of us pay taxes of some kind, every time we say “taxpayer money” we prolong the illusion that society depends on certain kinds of people so we can have nice things.
One quick exercise shows why. Picture a “taxpayer.” What does one look like? A homeless Black trans teen? An immigrant day laborer waiting on the corner? A young mom trying to cobble together enough income to feed her family, while languishing on the disability backlog? Unlikely. Let’s be honest: We know what sort of people “taxpayers” are supposed to be, and they’re not the ones we should be casting as the aggrieved parties.
The false idea that fed taxes pay for gov’t spending is deeply sinister and fundamentally racist. Unambiguously so. Our equality as human beings becomes much less important than the equality of dollars we can afford to pay in taxes.
If federal taxes were needed to pay for government spending, then giving people what they need “raises our taxes” (a bad thing!) and reducing or eliminating these programs “reduces our taxes” (a good thing!).
People are terrified right now of their taxes going up and desperate right now for them to go down. The “expensive” program they don’t yet have is the unknown.
If federal taxes were needed to pay for federal spending, then the only way to continue paying for stuff in the long term is to keep the obscenely wealthy obscenely wealthy.
If federal taxes were needed to pay for government spending, then even if we completely eliminated money from our politics, we would still fundamentally depend on the rich for what we need as a society.
If federal taxes were needed to pay for government spending, then the obscenely wealthy would necessarily be our saviors. (If the federal government really did need our money, then who would they, by far, get the most from?)
Because we falsely believe that fed taxes are needed to pay for government spending, we unknowingly volunteer to hand over control of the vast majority of society’s resources (real tangible stuff) – including ourselves as labor.
The idea that federal taxes pay for federal spending is used by the privileged (and the hateful) to withhold from the disadvantaged (and who they hate) what they desperately need. It is also based on the false idea that our system provides all with the same opportunities for wealth and income accumulation, and power.
Here are many, many more examples of the idea of “taxpayer money” being used by the privileged to withhold from those with less, and for the hateful to withhold from those they hate.
If taxes paid for stuff, then the idea that “government should provide for its citizens” is twisted to “government must alleviate the suffering of poor, poor taxpayers” – primarily referring to those who are privileged and white.
The idea that taxes pay for stuff is utilized by both political parties as a perpetual fake fight in order to prevent the many from getting what is desperately needed.
The only thing scarier to an obscenely rich person than:
“You want to take my money to pay for your stuff!!”
“Waitaminute. You don’t need to take my money to pay for your stuff?!”
Money is power. Yes, take most of their money, but not because we “need it.” (We couldn’t use it to “pay for stuff” if we tried.) Take it because no one should have that much power.
Don’t make the rich our saviors. Make them irrelevant.