For Keynesians, April 15 Is "Stimulus Day"

Dec 2013
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Beware of watermelons
April 15 is here and we are required to do the following: tell the government our income and send much of it to Washington.

Austrian-school economists are likely to tell you this is a bad thing and that taxes and government spending lower our living standards. In other words, the more government we are required to finance, the poorer we will be. According to the Austrians, economies grow through capital investments reflecting time preferences of individuals. Furthermore, Austrians actually claim that individual savings lead to economic growth. The more we pay in taxes, the less money we have for capital investment and saving. In other words, the more taxes we pay, the less we have for the building blocks of economic growth.

However, disciples of John Maynard Keynes, like Paul Krugman and others, take a rather different view. For them, wealth is achieved by spending, which creates economic growth. When consumers don't spend enough, government rescues the economy by upping its spending. Because of this, should government raise taxes, it actually stimulates the economy more than individuals can do through their own spending. We could allow people to spend their money as they see fit. But, it's better to be on the safe side and tax as much of it as possible, instead.


https://mises.org/blog/keynesians-april-15-stimulus-day
 
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Dec 2013
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The Keynesian “Balanced Budget Multiplier” makes it all possible. It is a version of 2 + 2 = 5. The tax-fueled magic is explained as follows:

All spending has a “multiplier” effect. Spending increases the incomes of others, who then spend their increased income, and the pattern continues indefinitely.
Individual savings, according to Keynesians, are “leakages” from the system, and if not offset by equal “injections” via government spending or increased exports, the “multiplier” then works in reverse, pulling the economy into recession.
Government tax increases, however, have two-fold positive net effects. First, government spends new tax revenues, which quickly multiplies and creates new jobs. Second, by reducing individual incomes, people must spend larger percentages of their incomes to uphold their present standard of living. (The famed Keynesian “multiplier” equals 1 over the savings rate, so the less we save, the greater the multiplier.)
The “logic” of the balanced-budget multiplier differs from the logic of taxation and spending in Denmark. There, individuals pay most of their income in taxes, but supposedly receive marvelous government services that are more valuable to them than what they would have purchased on their own had high tax rates not existed.

Instead, the “Balanced-Budget” multiplier creates wealth by destroying savings. Austrians obviously disagree, and the “reality gap” between Austrians and Keynesians is widened. Austrians emphasize savings, capital accumulation, market prices and market interest rates, profits, losses, with entrepreneurs making decisions in an uncertain climate under the umbrella of economic calculation.


https://mises.org/blog/keynesians-april-15-stimulus-day
 
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Dec 2006
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New Haven, CT
I'm so excited that this year - for the first in many years! - we don't have to pay a thing - we're actually getting a return! I don't know what happened - income was the same. Some kind of taxes went down, I guess. I have no idea (we don't do our own taxes) - but I've very happy about it!

We paid our fair share of taxes to support our country AND we get a little holiday out of it, too!
 
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Dec 2013
33,811
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Beware of watermelons
I'm so excited that this year - for the first in many years! - we don't have to pay a thing - we're actually getting a return! I don't know what happened - income was the same. Some kind of taxes went down, I guess. I have no idea (we don't do our own taxes) - but I've very happy about it!

We paid our fair share of taxes to support our country AND we get a little holiday out of it, too!
You think maybe it was the federal government recognizing marriage equality?
 
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RNG

Forum Staff
Apr 2013
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La La Land North
I'm so excited that this year - for the first in many years! - we don't have to pay a thing - we're actually getting a return! I don't know what happened - income was the same. Some kind of taxes went down, I guess. I have no idea (we don't do our own taxes) - but I've very happy about it!

We paid our fair share of taxes to support our country AND we get a little holiday out of it, too!
To me Tris, that just means the government took too much at source and so you have de facto given the government an interest-free loan.
 
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Dec 2012
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When NASA started sending astronauts into space, they quickly discovered that ball-point pens would not work in zero gravity. To combat this problem, NASA scientists spent a decade and $12 billion developing a pen that writes in zero gravity, upside-down, on almost any surface including glass and at temperatures ranging from below freezing to over 300 C.
The Russians used a pencil.

Your taxes are due again -
 
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Sep 2015
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Brown Township, Ohio
I filled out my first federal income tax form when 16 and filled out my last one when 60. I used to sweat April 15 but no more.
 
Dec 2006
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New Haven, CT
You think maybe it was the federal government recognizing marriage equality?
Might very well be.

That was something that was supposed to be an advantage. Maybe it actually worked out that way. This our first year filing jointly.
 
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Dec 2013
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Might very well be.

That was something that was supposed to be an advantage. Maybe it actually worked out that way. This our first year filing jointly.
It should have been huge and was one of my base arguments for the bill

As much as I am against the state and taxes I am more against it being used unfairly against people.
 
Sep 2015
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Brown Township, Ohio
Might very well be.

That was something that was supposed to be an advantage. Maybe it actually worked out that way. This our first year filing jointly.
My third wife was an income tax preparer. When filing a joint return I told her what she is doing is illegal and I left the marriage because I have to do everything above board.