4 ms·

"without a single penny spent of tax dollar money. We've been fortunate to get enough grant money from both state and federal to get this off the ground." How

"without a single penny spent of tax dollar money. We've been fortunate to get enough grant money from both state and federal to get this off the ground." How are state and federal grants not made up of tax dollars?

dragonwriter 5y ago
> How are state and federal grants not made up of tax dollars? State is different because the funding situation of state and federal governments are not equivalent, but marginal federal spending is not tied to marginal increases in tax revenue even in principal, so quite literally changes in federal spending do not come from tax dollars. If you assume that (1) the lifespan of the federal government is finite, and (2) the federal government will have no unpaid, transferred, forgiven, or externally covered debt from now until and including the eventual final shut-down, then it follows that any spending must eventually be covered by taxes, but while (1) is a reasonable assumption, (2) is...less clearly justified.
- starik36 5y ago
  I am still confused how this isn't tax payer funded. If it comes from the government, it's tax payer funded.
  - dragonwriter 5y ago
    > I am still confused how this isn't tax payer funded Because federal government spending doesn't depend marginally on taxes. > If it comes from the government, it's tax payer funded. This would be true if changes in government spending were tied to changes in taxes, but it isn’t because they aren’t. For state government operational spending its closer to being a general truth.
    - ghiculescu 5y ago
      That’s ridiculous. Why have taxes at all if spending is not dependent on them?
      - thatguy0900 5y ago
        Because you need to pretend the spending does depend on them. Otherwise the magic of Fiat currency starts to waver
      - dragonwriter 5y ago
        > Why have taxes at all if spending is not dependent on them? In aggregate, to offset, to the extent viewed desirable, the money supply effects of the creation of money in spending, and in terms of specific distribution of taxes to effect a desired (re)distribution of net income. Also, though the above would be sufficient on its own, because prior to the abandonment of commodity-representational currency for pure fiat, the metaphor of the fisc, a finite purse (from which we get the adjective “fiscal”) was a reasonable model of government finances, and there is a lot of inertia in popular models of the world. So, even though it is no longer an apt model, lots of people — both in the electorate and even in government — still view the world through a framework in which that is exactly how things work, which affects their decisions as electors or government decision-makers.
        coding123 5y ago
        Ok, so we're at the point where we just create money I guess. I didn't understand any of this mumbo jumbo but I'll follow for a second. Even if this is all true and it's effectively free - we're saying the tax payer isn't paying for it. However isn't there still an unfairness when it comes to who BENEFITS from said broadband?
      - michaelbrave 5y ago
        In MMO's they have a concept called a "gold sink" where in order to fight inflation they create very expensive things and methods/payments that essentially waste money to keep the economy from crashing. If most money nowadays is calculated digitally (which it is, most transactions are spreadsheets and databases instead of actual cash or goods) and the way most new money that is created is created in similar fashion (it is). Then the constrains of money creation are limited to faith in the system, value speculation (mostly by other countries for what they can trade it for) and inflation. Most monetary systems crash due to overprinting of money and excess inflation which causes a lack of faith in the system. Having something akin to "Gold Sinks" is part of keeping things running, taxes are a perfect way to do that, though the distribution could use some tweaking to get better results, especially if one cares about wealth redistribution.
    - roenxi 5y ago
      It appears you have defined the taxpayer out of existence. Assuming that the government goes to extremes and does away with the idea of taxes as the primary source of funding, what term will you accept to pithily describe "someone has to give up the resources that were used for this project, despite not personally wanting the project to happen"?
  - selimnairb 5y ago
    Well, any Federal funds are categorically not tax payer funds. The Federal government spends money into existence as it is a currency issuer (through the Federal Reserve).
    - NovemberWhiskey 5y ago
      Wait, what? No; that's not how that works at all. Where did you read that? The shortfall between Federal government spending and tax receipts is the deficit. The government has to borrow that money, which it does by having the Treasury issue debt securities.
      - nl 5y ago
        This is correct. I attempt to provide references here: https://news.ycombinator.com/item?id=27685631 https://news.ycombinator.com/item?id=27685631 Not sure where these claims come from either.
      - selimnairb 5y ago
        Federal government deficit=private sector surplus. The money is conserved. Federal surplus=private sector surplus. People who want to balance the federal budget either don’t know what they are talking about, or are cynically trying to redistribute money to the wealthy.
    - starik36 5y ago
      Wonderful. Than I suggest that we cancel all taxes and just use the printed money to fund everything.
    - treis 5y ago
      Then what the hell are they doing with all the money I send them?
      - triceratops 5y ago
        Taxing your money away is a means of fighting inflation. Taxes and tax breaks also shape behavior. Sugary beverage taxes, tobacco taxes, mortgage interest deductions.
  - selimnairb 5y ago
    Also, municipal broadband is often funded by issuing bonds that are paid back with revenue from providing Internet service.
    - kevin_thibedeau 5y ago
      Which is how we get those socialist big government monstrosities like water delivery and sewage handling.
  - mc32 5y ago
    It’s doubly confusing when you see signs up on the highway claiming “your tax dollars at work” next to highway projects when they come from fed and state taxes, but apparently those are not tax dollars...
- aidenn0 5y ago
  The government is using its power of taxation to convince lenders that it can cover its debt. If that isn't taxpayer funded, then nothing I charge on my credit card is funded by my salary. Saying federal spending isn't "taxpayer funded" because there is a deficit is sophistry.
jancsika 5y ago
They are, but you are either being ungenerous in your question or missing vital context that anyone familiar with a city council meeting would already know. OP is bragging that the municipality is paying for a service without increasing local taxes to pay for it. Increasing local taxes is the obvious way that municipalities typically pay for something like this. But increasing local taxes also generates predictable and often persuasive complaints from old cranks who never want to increase local taxes. OP's muni is thus circumventing those complaints by using grant money for the rollout. While it's true that state and fed grants use tax dollars, it's irrelevant to the OP's brag. E.g., Old crank at meeting says, "I don't want to pay more money for a service I don't need." Applause break. Old crank at meeting says, "I don't think it's right to take a grant created with state and federal taxes which I don't believe in paying." Awkward silence. Edit: clarification
- mattmanser 5y ago
  I really don't get how it's an ungenerous reading. It's funded by taxes. Grants are paid for by taxes. Many tax pennies were spent. Just because it didn't come out of the city council pot makes no difference.
  - TaylorAlexander 5y ago
    I agree with you. I think it is perhaps a great use of tax revenues, but at the state level all that tax revenue came from taxes. At the federal level it is possible to create money from nothing, something fans of Modern Monetary Theory would emphasize. Tho for the most part that is also tax dollars. Could be a good use of taxes but I don’t think it’s correct to say “not a penny of tax revenues spent”.
    - bawana 5y ago
      ^THIS. The fed govt prints more money. Cities and everyone else cannot,until every town starts to mine their own coin. Would you rather mine dodge coin or ‘new York’ coin that is backed by a municipal bond issue?
  - 5y ago
nrdvana 5y ago
Looking at it a different way, it’s entirely possible that those grants are the same ones that the companies would have applied for to roll out broadband to rural areas. In that sense, it doesn’t spend tax dollars in excess of what would have been spent anyway if they got the cable company to do it for them.
onlyrealcuzzo 5y ago
The post office has been around for a very long time, and is an example of the government providing a service which people pay for by using the service. There are numerous examples of this. Your water supply might be one of them. Municipal broadband is also usually pay-for-use, and you could fund it with bonds, which is also common. You could argue against how a municipality decides to implement their own broadband service. But saying that no municipality should be able to provide any service - or even particular services - seems a bit odd. Since that's the majority of what local governments do... The police, education, water, roads, parks, etc...

dragonwriter 5y ago

> How are state and federal grants not made up of tax dollars? State is different because the funding situation of state and federal governments are not equivalent, but marginal federal spending is not tied to marginal increases in tax revenue even in principal, so quite literally changes in federal spending do not come from tax dollars. If you assume that (1) the lifespan of the federal government is finite, and (2) the federal government will have no unpaid, transferred, forgiven, or externally covered debt from now until and including the eventual final shut-down, then it follows that any spending must eventually be covered by taxes, but while (1) is a reasonable assumption, (2) is...less clearly justified.

starik36 5y ago
I am still confused how this isn't tax payer funded. If it comes from the government, it's tax payer funded.
- dragonwriter 5y ago
  > I am still confused how this isn't tax payer funded Because federal government spending doesn't depend marginally on taxes. > If it comes from the government, it's tax payer funded. This would be true if changes in government spending were tied to changes in taxes, but it isn’t because they aren’t. For state government operational spending its closer to being a general truth.
  - ghiculescu 5y ago
    That’s ridiculous. Why have taxes at all if spending is not dependent on them?
    - thatguy0900 5y ago
      Because you need to pretend the spending does depend on them. Otherwise the magic of Fiat currency starts to waver
    - dragonwriter 5y ago
      > Why have taxes at all if spending is not dependent on them? In aggregate, to offset, to the extent viewed desirable, the money supply effects of the creation of money in spending, and in terms of specific distribution of taxes to effect a desired (re)distribution of net income. Also, though the above would be sufficient on its own, because prior to the abandonment of commodity-representational currency for pure fiat, the metaphor of the fisc, a finite purse (from which we get the adjective “fiscal”) was a reasonable model of government finances, and there is a lot of inertia in popular models of the world. So, even though it is no longer an apt model, lots of people — both in the electorate and even in government — still view the world through a framework in which that is exactly how things work, which affects their decisions as electors or government decision-makers.
      - coding123 5y ago
        Ok, so we're at the point where we just create money I guess. I didn't understand any of this mumbo jumbo but I'll follow for a second. Even if this is all true and it's effectively free - we're saying the tax payer isn't paying for it. However isn't there still an unfairness when it comes to who BENEFITS from said broadband?
    - michaelbrave 5y ago
      In MMO's they have a concept called a "gold sink" where in order to fight inflation they create very expensive things and methods/payments that essentially waste money to keep the economy from crashing. If most money nowadays is calculated digitally (which it is, most transactions are spreadsheets and databases instead of actual cash or goods) and the way most new money that is created is created in similar fashion (it is). Then the constrains of money creation are limited to faith in the system, value speculation (mostly by other countries for what they can trade it for) and inflation. Most monetary systems crash due to overprinting of money and excess inflation which causes a lack of faith in the system. Having something akin to "Gold Sinks" is part of keeping things running, taxes are a perfect way to do that, though the distribution could use some tweaking to get better results, especially if one cares about wealth redistribution.
  - roenxi 5y ago
    It appears you have defined the taxpayer out of existence. Assuming that the government goes to extremes and does away with the idea of taxes as the primary source of funding, what term will you accept to pithily describe "someone has to give up the resources that were used for this project, despite not personally wanting the project to happen"?
- selimnairb 5y ago
  Well, any Federal funds are categorically not tax payer funds. The Federal government spends money into existence as it is a currency issuer (through the Federal Reserve).
  - NovemberWhiskey 5y ago
    Wait, what? No; that's not how that works at all. Where did you read that? The shortfall between Federal government spending and tax receipts is the deficit. The government has to borrow that money, which it does by having the Treasury issue debt securities.
    - nl 5y ago
      This is correct. I attempt to provide references here: https://news.ycombinator.com/item?id=27685631 https://news.ycombinator.com/item?id=27685631 Not sure where these claims come from either.
    - selimnairb 5y ago
      Federal government deficit=private sector surplus. The money is conserved. Federal surplus=private sector surplus. People who want to balance the federal budget either don’t know what they are talking about, or are cynically trying to redistribute money to the wealthy.
  - starik36 5y ago
    Wonderful. Than I suggest that we cancel all taxes and just use the printed money to fund everything.
  - treis 5y ago
    Then what the hell are they doing with all the money I send them?
    - triceratops 5y ago
      Taxing your money away is a means of fighting inflation. Taxes and tax breaks also shape behavior. Sugary beverage taxes, tobacco taxes, mortgage interest deductions.
- selimnairb 5y ago
  Also, municipal broadband is often funded by issuing bonds that are paid back with revenue from providing Internet service.
  - kevin_thibedeau 5y ago
    Which is how we get those socialist big government monstrosities like water delivery and sewage handling.
- mc32 5y ago
  It’s doubly confusing when you see signs up on the highway claiming “your tax dollars at work” next to highway projects when they come from fed and state taxes, but apparently those are not tax dollars...
aidenn0 5y ago
The government is using its power of taxation to convince lenders that it can cover its debt. If that isn't taxpayer funded, then nothing I charge on my credit card is funded by my salary. Saying federal spending isn't "taxpayer funded" because there is a deficit is sophistry.

jancsika 5y ago

They are, but you are either being ungenerous in your question or missing vital context that anyone familiar with a city council meeting would already know. OP is bragging that the municipality is paying for a service without increasing local taxes to pay for it. Increasing local taxes is the obvious way that municipalities typically pay for something like this. But increasing local taxes also generates predictable and often persuasive complaints from old cranks who never want to increase local taxes. OP's muni is thus circumventing those complaints by using grant money for the rollout. While it's true that state and fed grants use tax dollars, it's irrelevant to the OP's brag. E.g., Old crank at meeting says, "I don't want to pay more money for a service I don't need." Applause break. Old crank at meeting says, "I don't think it's right to take a grant created with state and federal taxes which I don't believe in paying." Awkward silence. Edit: clarification

mattmanser 5y ago
I really don't get how it's an ungenerous reading. It's funded by taxes. Grants are paid for by taxes. Many tax pennies were spent. Just because it didn't come out of the city council pot makes no difference.
- TaylorAlexander 5y ago
  I agree with you. I think it is perhaps a great use of tax revenues, but at the state level all that tax revenue came from taxes. At the federal level it is possible to create money from nothing, something fans of Modern Monetary Theory would emphasize. Tho for the most part that is also tax dollars. Could be a good use of taxes but I don’t think it’s correct to say “not a penny of tax revenues spent”.
  - bawana 5y ago
    ^THIS. The fed govt prints more money. Cities and everyone else cannot,until every town starts to mine their own coin. Would you rather mine dodge coin or ‘new York’ coin that is backed by a municipal bond issue?
- 5y ago

nrdvana 5y ago

Looking at it a different way, it’s entirely possible that those grants are the same ones that the companies would have applied for to roll out broadband to rural areas. In that sense, it doesn’t spend tax dollars in excess of what would have been spent anyway if they got the cable company to do it for them.

onlyrealcuzzo 5y ago

The post office has been around for a very long time, and is an example of the government providing a service which people pay for by using the service. There are numerous examples of this. Your water supply might be one of them. Municipal broadband is also usually pay-for-use, and you could fund it with bonds, which is also common. You could argue against how a municipality decides to implement their own broadband service. But saying that no municipality should be able to provide any service - or even particular services - seems a bit odd. Since that's the majority of what local governments do... The police, education, water, roads, parks, etc...