Some folks - including the recent President-Elect, Barack Obama - believe the answer (or at least most of the answer) lies in increasing taxes on the "wealthy." That's certainly one option. One I gave some thought to this morning.
I'm confident that debates on taxes in this country will continue as long as the country itself does. Nevertheless, I decided to crunch some numbers I hadn't seen crunched in any major news outlets (CNN, FOX, MSNBC, USAToday, etc.).
How much money was collected by the government in federal taxes just last year (2007)? Lots. Well over 2-and-a-half $trillion$, in fact. So, I guess the idea (held by some) is to increase taxes on the 'wealthy' to up that gigantic number a bit, so we can start making a dent in our budget deficit.
So I start wondering how much, exactly, these super-wealthy yuppies are paying into that 2.5 trillion amount. Turns out that the wealthiest 1% (that's not a typo: that's the number ONE, and a percentage symbol)... the wealthiest 1% of tax payers in the U.S. paid 36.9% of all federal tax collected in 2007. That's a fact (click the link to check me on it).
Do you know how much 36.9% of 2-and-a-half TRILLION is?? Again: lots. So much, in fact, that it's OVER DOUBLE the amount of our $455 billion-dollar deficit.
This is what the numbers actually look like:
2007 Total Federal Tax Collected: $2,674,007,818,000 (See? Over 2.5 trillion)
Wealthiest 1%: Paid 36.9% of total (i.e., $986,708,884,842)
2008 US Budget Deficit (as of November): $455,000,000,000
As anyone with a 3rd grade education could see, the "wealthiest 1%" of taxpayers actually gave this country more than double what our current budget deficit is. The solution then - as suggested by some - is to increase taxes on this tiny minority of taxpayers who already pay nearly two-fifths of what the government receives, per annum. That's 1% of taxpayers (not 'all citizens,' taxpayers) paying 36.9% of all taxes received by the federal government.
After seeing this, I have to sort of wonder aloud: is the problem really that the wealthy aren't "paying their share," or is it that the federal government couldn't successfully manage a lemonade stand? When 46% of the taxes collected from just 1% of all taxpayers could completely eliminate the budget deficit - why are we even talking about raising taxes??
Why not have the (super bloated) government tighten its belt just a bit, and learn to effectively manage the trillions of dollars it already receives from us? (Before okaying a tax increase on those who shoulder the majority of the burden.)