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Why Your Taxes Will Always Grow
And Why That Is Not a Problem
What I discuss in this article is very important because it fundamentally alters your perspective on government spending and taxation. What I’m presenting here is not my own idea or theory. I’m simply drawing attention to well-established economic principles that, for some reason, are not widely known.
Specifically, this is about something called the Baumol effect. Why is it important for you to learn about it?
Because, as we’ve seen with Elon Musk’s DOGE antics, there’s a right-wing narrative that government taxation and spending are totally out of control — and that we need some kind of wild revolution to rein it in. It’s easy to sell that idea when people can clearly see that, all over the world, government spending and taxation tend to grow over time.
The right wants to convince you that this growth is purely due to bloat, inefficiency, and waste. But the real reason is the Baumol effect. Let me explain. Cars, phones, flatscreen TVs, food, metals from mines — these things are produced with less and less manpower due to increasing automation. Large-scale production today is almost entirely handled by robots. So the average human labor required to make “stuff” has dropped like a stone.
