Soaking the rich as a revenue remedy to Government’s fiscal woes is mathematically impossible, and provable to be a myth.
Perhaps the math might have worked out (though the logistics still would have failed) back in the days of President Bush, whose worst deficit (2003) was “only” around $420 Billion, and whose tax cuts raised revenues enough to reduce that deficit down to $120 Billion the last year before Pelosi/Reid took the reins of Congress. But given the realities of the damage done by the 110th and 111th Congresses, we have spent ourselves into an oblivion that the so-called “rich” cannot bail us out of even if we confiscated everything they earn!
But here are some figures you must learn and be able to use to dispel the myth when the leftists try to use the revenue side of the equation when it comes to getting the Government’s fiscal house in order.
Our Deficit is 1.6 trillion dollars. To make that more understandable to those confused by big numbers… that is 1600 Billion dollars, or 1.6 Million Millions of dollars.
The Deficit is not the DEBT. The deficit is our annual shortfall of outgo versus income. It has been said, “When your outgo exceeds your income, your upkeep will be your downfall!”
There are approximately 330 million people (men, women and children) in the USA. That means this year’s Federal Spending will exceed tax revenue income by around $4,850 for each and every one of us, including our infants and our elderly and our infirm.
Our debt is around 14 Trillion, or 14,000 Billion. The debt is the cumulative shortfall of all our deficits since Washington, less all our surpluses. That’s on the order of $42,500 for each of us.
But these numbers, while disturbing, don’t prove my initial postulation that it is impossible to soak the rich and resolve our fiscal crisis.
So, here’s the proof:
According to the latest Government Figures, the earnings total of all people in the USA was around 7.8 Trillion Dollars a year. Of that, those earning $200,000 a year represented 17.5% of the total, or approximately $1.37 Trillion.
If we took everything made by those earning $200,000 or more, we’d fall significantly short of clearing our $1.6 Trillion deficit!
But remember, these people are already paying taxes out of that number. If we estimate a current net tax burden after deductions and “loopholes” of 25%, that means we can only appropriate another 75% of that $1.37 Trillion - if we took everything from everyone earning $200,000 or more. So we could further reduce our deficit by not 1.37 Trillion but by only 1.03 Trillion. In other words, we’d still have a deficit of $600 Billion… almost 50% higher than Bush’s worst deficit with a GOP Congress.
Remember also that on the spending side, discretionary spending is only around $1.3 Trillion of our $3.7 Trillion budget. If we eliminated all discretionary spending, and funded only entitlements and interest payments on the debt, we’d be left with a $300 Billion deficit!
Cutting a billion here and a million there from our Discretionary Budget might make for politically expedient rhetoric that might help an incumbent gain more re-election votes… but it is merely arranging the deck chairs on the Titanic.
The uncomfortable truth is that this ship is going down unless we tackle the real and only real problem: entitlement spending!