Taxes Don’t Cover America’s Expenses

[EasyAce]

By Michael D. Tanner
https://www.cato.org/publications/commentary/taxes-dont-cover-americas-expenses

[April 17], as most Americans are painfully aware, was “Tax Day,” the last day for filing individual income taxes this year. When the smoke clears, Americans will have paid $1.6 trillion in individual income taxes. And contrary to the populist rhetoric of both the Left and the Right, the vast majority of those taxes will have been paid by the rich. The wealthiest 1 percent of Americans, who earn 16 percent of U.S. income, will pay roughly 43 percent of federal income taxes this year.

Of course, income taxes are only one component of federal taxes, and for most Americans, it’s not even the biggest part of their taxes. All in, Americans will pay $3.3 trillion in federal taxes this year. On top of that, they will pay $1.8 trillion in local and state taxes, for a total burden (local, state, and federal) of $5.2 trillion, roughly 30 percent of GDP. Americans will pay more in taxes this year than they will for food, clothing, and shelter combined.

Despite record tax revenue, the federal government will still run an $800 billion budget deficit this year. That’s because it will spend roughly $4.1 trillion this year, while taking in the aforementioned $3.3 trillion. This is not rocket science: If you spend more than you take in, you have a problem. Progressives will blame low taxes generally, and the recent GOP tax reform in particular. But the Congressional Budget Office says that tax revenues as a percent of GDP will decline by just 0.7 percent this year. Spending, on the other hand, will increase by 3 percent of GDP, more than four times as much.

Over the long term, the tax cuts will probably mean larger deficits. CBO estimates that forgone tax revenue will add about $1.85 trillion to the debt over a decade. Not good. On the other hand, increased spending will add around $12 trillion to the debt over ten years. Spending is expected to grow by 70 percent, meaning that even without the tax cuts, we would be drowning in red ink. Houston, we have a spending problem . . .

[dfwgator]

Then it's time to cut the expenses.

[EasyAce]

Then it's time to cut the expenses.

That's what the writer says. (And I agree.)

And guess who's not going to listen to him on Crapola Hill and in the White House?