An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Sunday, October 28, 2018
Eric Lonergan — MMT and fiscal rules (part I) – a prologue
This is off topic, but I find it slightly annoying.
People who understand MMT know that the US government essentially destroys federal tax revenue upon receipt. Therefore every lottery jackpot sucks money out of the economy.
For instance, two different people won yesterday’s $687.8 million Powerball jackpot. The U.S. government will immediately seize and destroy 25% of that $687.8 million (i.e. will destroy $171.95 million).
That leaves $515.85 million.
In April the U.S. government will seize 37% of that $515.85 million (i.e. $190.86 million) as income taxes.
So, for each $687.8 million Powerball jackpot, the US government takes $362.81 million and destroys it. ($171.95 million + $190.86 million) That money is sucked out of the economy.
This happens because most people insist on believing the lie that the US government needs tax revenue.
This is off topic, but I find it slightly annoying.
ReplyDeletePeople who understand MMT know that the US government essentially destroys federal tax revenue upon receipt. Therefore every lottery jackpot sucks money out of the economy.
For instance, two different people won yesterday’s $687.8 million Powerball jackpot. The U.S. government will immediately seize and destroy 25% of that $687.8 million (i.e. will destroy $171.95 million).
That leaves $515.85 million.
In April the U.S. government will seize 37% of that $515.85 million (i.e. $190.86 million) as income taxes.
So, for each $687.8 million Powerball jackpot, the US government takes $362.81 million and destroys it. ($171.95 million + $190.86 million) That money is sucked out of the economy.
This happens because most people insist on believing the lie that the US government needs tax revenue.
(State and local taxes are separate from this.)