Saturday, November 22, 2008

The Deficit vs. The Wealthy

After reading a few recent "news" articles, I began thinking about our deficit.  It's pretty bad, you know.  Up to $455 billion right now (now = November 2008).  Lots of people have lots of different ways they'd like to deal with it.  You know what they say about opinions...

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.)

No comments: