Already 62 percent of American households pay more in payroll taxes than in income taxes. The bottom 50 percent of earners supply less than 3 percent of income-tax revenues. Forty-five percent of American households pay no income tax, either because they earn too little or because they qualify for enough exemptions and credits to erase their liability. Sixty percent pay nothing or less than 5 percent of their income. Forty percent of earners are net recipients from the income tax because they qualify for refundable tax credits. All this means that an already large — and, if the Republican bill passes, soon to be larger — American majority has a vanishingly small incentive to restrain the growth of a government that they are not paying for through its largest revenue source.
These facts might be the results of defensible tax and social policies. They should, however, be discomfiting to those remaining conservatives — they are on the endangered species list — who dispute Dick Cheney’s notion that “Reagan proved deficits don’t matter.” Deficits matter for their political as well as — actually, even more than — their economic effects: Deficits make big government cheap, enabling the political class to charge taxpayers rather less than $1 for every $1 of government benefits dispensed. When the Bush-Cheney administration managed the last large tax cut, the publicly held national debt was 33 percent of gross domestic product. Today it is 75 percent.