The battle? Well, the battle is the deficit.
So, who’s right, who’s wrong? Let’s check it out.
First we have to identify how large the deficit is. How much money are we short this year?
A new estimate predicts the federal budget deficit will hit almost $1.5 trillion this year, a new record.
The budget, as it stands, is set to deliver us a $1.5 trillion shortfall. $1.5 trillion. Another way of saying that?
So, how much of a tax hike on the rich are we going to have to implement? First we have to identify who the rich are. According to Obama, the rich can be classified as anyone earning more than $250,000 a year. During his campaign he continually claimed that no one earning less than that amount would see their taxes rise even a single dime.
Now, to be fair, the definition of rich could be made to be higher. Certainly there are those in Congress who are fighting to raise taxes only on the millionaires and billionaires. But I don’t buy that, so we’ll go with the $250k figure. In fact, I’ll go even further. The IRS doesn’t provide data at that convenient level, they begin their bracket at $200,000. So let’s start there. While I understand there isn’t a push to raise taxes at that level of income, it does STRENGTHEN my argument; it’s adding 4,000,000 more tax returns to the mix.
Okay, so let’s start:
First, the deficit is $1.5 trillion dollars. Can the folks who make more than $200,000 make that up? There are 4,359,936 filers who make that amount of money. Simple math says that if we take 1,500,000,000,000 and divide it by 4,359,936 we get $344,041.7. That means we would have to bill each of those people who earn more than $200,000 a year $344,042 a year.
Just to break even.
This number is important for two reasons:
- It represents a bill ON TOP of the taxes they’ve already paid.
- It’s a number higher than most of that earn. They don’t have that kind of money.
Okay. So, point #1 above is important. It’s important because the deficit is only, ONLY, $1.5 trillion because those people making more than $200,000 have already paid their taxes. Let’s back those taxes out and see where we are.
The people making more than $200,000 paid $531,301,056,000 in taxes. That’s about $.5 trillion. If we take that out and rework the tax for those folks, that gives us a starting point of $2.3 trillion.
Okay, those 4.3 million+ people earning more than $200,000 earn, in sum, $2.462 trillion. Call it $2.5 trillion. That means if we take everything, all of it, if we took every single dime each of these people make, it would just barely cover the deficit.
All of it.
All of their money.
We simply can NOT tax our way out.