Does progressive tax reform mean an end to government waste, or does it mean more money to spend to make up for what our federal and state bureaucracies lose? Backers of a progressive tax fix for federal and state budgets focus on more revenue for the middle and lower classes. They don’t usually mention that the programs they insist we fund at a rising cost to taxpayers account for a staggering amount of government waste.
If we need a reminder of how little value public money has, Illinois provided that last week.
Government waste in Illinois: can Medicaid spending raise the dead?
Still proud of Illinois’ overhaul of Medicaid, the smile on Pat Quinn’s face must have faded when the news that his state spent $12 million on dead Medicaid recipients hit the papers.
There is no reason to think that government waste from the Obamacare Medicaid expansion won’t be breathtaking, though the numbers will be difficult to gauge because we don’t know how much money we are losing. What we know for certain is that government wastes a sizable portion of what it seizes in taxes and progressive tax reform rhetoric is focused on grabbing more to spend and little else.
A House Oversight Committee’s report on Medicaid spending delivered bad news to taxpayers:
No one knows how much of Medicaid’s budget consists of waste, fraud, and abuse, but it may exceed $100 billion a year. Policymakers in favor of increased taxation and growing government should first look inward at how government is functioning, and focus first on curtailing the excessive waste, fraud, abuse and mismanagement that is pervasive throughout programs such as Medicaid.1
If we don’t know how much money we waste, how can we know how much more we need? We don’t, but when it comes to taxes government needs a lot and whatever we give is never enough.
Is progressive tax reform the cure for government waste?
Remember Hilda Solis’ outrage at the $17.5 billion lost to the unemployment insurance program? Calls for a more progressive tax system have drowned out talk of stemming government waste from welfare, handouts, and entitlement programs. The Congressional Progressive Caucus, which brought us “The People’s Budget” with demands for fair, progressive tax reform, prefers partisan attacks:
“Republicans seem to think everyone has exactly what they deserve and money is the measure of a person’s value,” Rep. Raúl M. Grijalva (D-AZ) said. “If you don’t have enough for their tastes, you’re out of luck and they have no interest in helping you. If you have a lot, they’ll go out of their way to make sure you get more at our expense.2
What is the fix for the 10% failure goal for the unemployment insurance program?3
Tax reform must be done in a way that raises significant revenue, protects working families and the vulnerable, and requires corporations and the wealthy to pay a fair share.4
More taxes are the cure for all government spending problems, especially in the Land of Lincoln, where demands for a progressive income tax are joined by a 12.22% bad payment rate for unemployment insurance benefits, over half of it caused by “work search issues.”5
This is what progressive tax reform will pay for.
A progressive tax system will fund more progressive government spending and with that comes government waste, like the $14.4 billion in improper Medicaid payments and $6.2 billion in improper unemployment insurance payments we funded.6 Progressive Democrats have come up with ideas like the Hard Work Tax Credit to make things fairer for their flock. They still haven’t managed to staunch the flow of taxpayer dollars from tax breaks like the Earned Income Credit, for which the IRS has a goal of handing out 23%-28% in improper payments.7
What we need to see is a government waste tax credit before we start talking about progressive tax reform. Should we expect to see the losses taken off of our annual tax bill? Not likely. Government waste works best when it gives politicians an excuse to demand more progressive taxes.