Some folks out there doubt what The House Leadership - lead by Mr. Ryan's Budget Plan have to say about Federal Spending and Taxes. Let's take a look at some government tax and budget facts then so you can see why conservatives say America doesn't have a tax shortage, it has a spending problem:
Fact: In 2009, the Federal government collected 2.1 trillion dollars in taxes.
Fact: In 2009, the Federal government spent 3.52 trillion dollars.
Fact: In 2009, the Federal government spent 678 billion dollars on Social Security.
Fact: In 2009, the Federal government spent 676 billion dollars on Medicare.
Fact: In 2009, 38.47% of the entire budget went to Social Security and Medicare and the two programmes consumed 64.48% of all Federal tax revenues.
Fact: The 2009 Social Security and Medicare Trustees Reports show the combined unfunded liability of these two programmes has reached nearly 107 trillion dollars in today's dollars and Laurence Kotlikoff, a well-known professor of economics at Boston University, puts the real figure over 200 trillion dollars!
Fact: In 2010, the Federal government collected 2.16 trillion dollars in taxes.
Fact: In 2010, the Federal government spent 3.618 trillion dollars.
Fact: In 2010, the Federal government spent 701 billion dollars on Social Security.
Fact: In 2010, the Federal government spent 793 billion dollars on Medicare.
Fact: In 2010, 41.29% of the entire budget went to Social Security and Medicare and the two programmes consumed 69.17% of all Federal tax revenues.
Fact: Discretionary spending under Bush was 6% when he left office. Obama increased discretionary spending by 11% in 2009 and 14% in 2010.
Fact: Under the baseline scenario, for example, the CBO has determined that the federal government can restore fiscal balance by raising all taxes and cutting all transfer payments immediately and for the indefinite future by 35%.
Fact: The CBO also found that if federal income tax rates are adjusted to allow the government to continue its current level of activity and balance its budget, the lowest marginal income tax rate of 10% would have to rise to 26%.
Fact: The CBO has found that if federal income tax rates are adjusted to allow the government to continue its current level of activity and balance its budget, the 25% marginal tax rate would increase to 66%.
Fact: The CBO also found that if federal income tax rates are adjusted to allow the government to continue its current level of activity and balance its budget, the current highest marginal tax rate on 250,000 dollars (35%) would rise to 92%.
Fact: If the CBO doesn’t do it for you, then try the IMF, which has said that the US has a “critical” fiscal problem and is “not serious” about addressing it. According to the IMF, were the US government to repeal the tax cuts enacted in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), and were the IPAB to succeed in curbing healthcare spending growth as provided in the IPAB mandate, reining in the fiscal gap would still require an immediate and permanent increase in all taxes and cut in all transfers of 26%.
Fact: According to the IMF, there is an alternative to the Paul Ryan Plan -- an 88% flat tax on everyone. Further, that would be in addition to FICA taxes, which would be 37% on gross income in 2054. [Yes, you read that correctly. 37% payroll taxes on gross income + 88% flat tax on everyone. And, yes, I realize that 37 + 88 = 125. Even if employers were to pay 50% of the 37% (18.5%), you are still left with 88% + 18.5% = 106.5%. Not only would you be working for free, you would also have to pay the government for the privilege of getting to work for nothing. And, you think the Madison labour fight was bad?]
Fact: If you raised taxes to 90% on the wealthiest Americans, forget about debt reduction. You wouldn’t be able to eliminate the budget deficit.
Fact: If you confiscated every penny owned (not just earned) by the 400 wealthiest Americans – 1.36825 TRILLION DOLLARS – you would still have a 300 BILLION DOLLAR BUDGET DEFICIT IN FY 2011.
Fact: If you confiscated every penny owned (not just earned) by the 400 wealthiest Americans – 1.36825 TRILLION DOLLARS – you would still not have enough money to fund Social Security, Medicare, and Medicaid for one year.
Fact: Under the Obama tax plan, the Bush rates would be repealed for the top brackets. Yet the "cost" of extending all the Bush rates in 2011 over 10 years was about 3.7 trillion dollars. Some 3 trillion dollars of that was for everything but the top brackets—and Obama says he wants to extend those rates forever. According to IRS data, the entire taxable income of everyone earning over 100,000 dollars in 2008 was about 1.582 trillion dollars. Even if all these Americans—most of whom are far from wealthy—were taxed at 100%, it wouldn't cover Obama's 1.65 trillion dollar deficit for this year.
Once again, America has a spending problem. Not a revenue problem.
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