It is 1:54 p.m. If at this minute you were to go to U.S. Debt Clock.org, you would see the national debt is $14,554,052,607,778, and rising fast by the second.
You would also see, that this year's federal budget deficit is $1,401,818,811,257 and rising by the second.
President Obama demands the debt ceiling be raised and matter fixed so that the problem will not have to be faced again until after the 2012 election. But assuming Congress passed a clean bill which dealt only with raising the debt ceiling, would that really fix the problem? If you think so, you are delusional.
The debt ceiling is only a symptom of decades of annual deficits. The country incurs a deficit when expenses exceed revenues. It is the deficit that increases the national debt. If we have to raise the debt ceiling by $1.4 trillion it is because we have a $1.4 trillion deficit this fiscal year.
There really are only two ways to eliminate this $1.4 trillion deficit:
-- Raise taxes, or
-- Cut spending. Borrowing only kicks the can down the road, and, because it involves interest payments, it increases the deficit. So anyone who tells you that we can fix the problem simply by raising the debt ceiling is an idiot or a con man. In fact, given roughly the same spending, and the same revenues, a year from now at this time we will have another $1.5 trillion deficit, and will therefore have to raise the debt ceiling by another $1.5 trillion.
So, if you are one of those who believes we can fix the problems by raising taxes on millionaires and billionaires (hereinafter called M&Bs), here are figures published by the IRS. Read them, and then draw your own conclusions.
-- The IRS reports that in 2008, 140,436 taxpayers reported incomes greater than $1 million but less than $1.5 million.
-- 59,469 reported incomes greater than $1.5 million, but less than $2 million.
-- 86,329 reported incomes greater than $2 million, but less than $5 million.
-- 21,390 reported incomes greater than $5 million, but less than $10 million.
-- 13,480 reported incomes in excess of $10,000,000.
If you add those numbers, you will find that in 2008 there were 321,000 U. S. taxpayers who reported incomes in excess of $1 million
The same report shows that those M&Bs paid $249,019,545,000 in federal income taxes, after all credits.The total number of taxpayers in 2008 was 90 million. Income tax they paid after, all credits, was just over $1 trillion. As such, 321,000 out of 90 million paid just under 25 percent of all federal income taxes paid in 2008. That means .3 percent of the taxpayers paid 25 percent of all federal income taxes. This year, America will have a $1.5 trillion deficit. That means expenses will exceed revenue by $1.5 trillion.
So what's the solution?
The Republicans say cut $1.5 trillion from this year's budget. The president demands "shared sacrifice." He wants M&Bs to pay their fair share. So what is it? In 2008, the M&Bs paid $250 billion in taxes.Was that "fair" then?
What if we doubled their taxes this year? What if the M&Bs were required to pay $500 billion this year. That would still leave us $1.25 trillion deficit. But, if their taxes were doubled, would they then be paying their "fair share?" Would that be enough "shared sacrifice?"
What if the M&Bs 2011 income tax was quadrupled? That would generate $.75 trillion in new revenues, and would leave us with a deficit of only $750 billion. Would that be their "fair share?" Would that be sufficient "shared sacrifice?"
In 2008, taxpayers -- other than the M&Bs -- paid roughly $.75 trillion in federal income taxes. If the millionaires and billionaires are going to have their taxes quadrupled to raise $.75 trillion in new taxes, perhaps the remaining 99.7 percent of taxpayers would be willing to have their taxes doubled to generate the other $.75 trillion necessary to balance the budget. Would that be "fair?" Would you be willing to "share the sacrifice" to that extent?
Of course, 51 percent of Americans pay no federal income tax. If you would be willing to double what you pay, I am certain they would be willing to double, treble or even quadruple what they pay. I am, of course, not naive enough to think that Americans with taxable incomes of less than $1 million who actually pay taxes, really want to see their taxes doubled. So, if you actually pay taxes, and you don't want them doubled, how much more are you willing to pay to eliminate the deficit? Anything less than a 100 percent increase won't do it, even if taxes are quadrupled on the M&Bs.
And of course if you are only willing to pay an additional 10 percent, why is it "fair" that the M&Bs pay an additional 100 percent or 300 percent -- while 51 percent of the American people pay nothing? At what point does taxing the M&Bs become naked plunder?
The bottom line is this: if you quadruple the income tax the M&Bs pay, you will still have a $.75 trillion deficit. So how much more are you willing to pay to cover the balance?
By the way, as I finish this revision, the U. S. Debt Clock now reads $14,544,068,702,280. And it is 2:25 p.m.
Posted Online: Aug. 18, 2011, 7:55 am - Quad-Cities Online
by John Donald O'Shea
Copyright 2011, John Donald O'Shea
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