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How Much Taxation Would Fund Current Spending?
American Thinker ^ | 12/12/2012 | Justin Hohn

Posted on 12/12/2012 8:24:19 AM PST by SeekAndFind

To best understand this spending aspect of the current budget negotiations in Washington, we must answer one crucial question: how much taxation on the top income-earners would be required to fully fund the present level of government spending?

To do so, we must first make the unreasonable assumption that the rich will not respond to confiscatory tax rates and hide money from being taxed. This is unreasonable because no scheme of taxation since WW2 has been able to capture more than 21% of GDP. With current spending levels around 23% of GDP, history suggests that no level of taxation we have yet tried would actually fully fund our current level of spending. But if we indulged some "static scoring" and assumed a static tax base, what would a zero-deficit, soak-the-rich taxation scheme look like at current spending levels?

For example, what would a 100% income tax on all those who earn over $10 million amount to? I'm not taking about a wimpy marginal rate, where one might tax only those dollars of income over $10 million (leaving the taxpayer $10 million). No, I'm saying you find all those who made more than $10 million and take every last penny -- an absolute tax of 100%.

Using 2009 data, the IRS says that 8,274 tax returns were filed with incomes over $10 million. The total amount of income on those returns was $240.1 billion.

Our federal government alone is spending more than $10 billion a day. Thus, a 100% confiscation of all income of those making more than $10 million would amount to less than 24 days of federal spending.

If we drop that "tax" point down to $1 million, the picture changes radically. The IRS says 236,883 Americans filed returns with more than $1 million in income.

(Excerpt) Read more at americanthinker.com ...


TOPICS: Editorial
KEYWORDS: 2012; bankrupt; debt; democrats; obama; obamanomics; rich; spending; taxation; taxes

1 posted on 12/12/2012 8:24:26 AM PST by SeekAndFind
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To: SeekAndFind

It’s never been about finance; you should not expect communists to make policy on economic grounds, only political ones.


2 posted on 12/12/2012 8:26:44 AM PST by henkster ("The people who count the votes decide everything." -Joseph Stalin)
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To: SeekAndFind
According to our government, the way to control our spending problem is to seek additional revenue through increased taxation.

Pretty frickin' incredible. This cannot end well.

3 posted on 12/12/2012 8:27:23 AM PST by ClearCase_guy (Republicans have made themselves useless, toothless, and clueless.)
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To: SeekAndFind

Anyone with any brains realizes that this ‘rich people not paying their fair share of taxes’ is just a ridiculous canard.

There isn’t enough of their actual income to make a dent in the deficit, let alone the national debt.

What the Democrats are after, have always been after, is the assets of the American citizen; their IRAs, their 401Ks, their trusts, and their savings over some meager amount.

In turn, they will add 4 or 5 hundred dollars a month to your generous Social Security check (in return for your IRAs et al) and call it evens-stevens.

In short it’s a total redistribution of wealth they’re after, nothing less.


4 posted on 12/12/2012 8:32:54 AM PST by Gaffer
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To: henkster

Article assumes 100% federal tax at various income levels. Any lieberal reading it should be made aware that that would leave each and every taxpayer owing, depending on where he or she (or it) lives, about 5 or 6% in the hole to their state, and totally default on their real estate taxes (or landlord, etc), and of course not able to eat. Anything.


5 posted on 12/12/2012 8:34:35 AM PST by C210N (When people fear government there is tyranny; when government fears people there is liberty)
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To: SeekAndFind

Let’s compare a million to a trillion.

(10^6 vs 10^12, in scientific notation)

It would take a million millionaires to fund one trillion.


6 posted on 12/12/2012 8:36:51 AM PST by P.O.E. (Pray for America)
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To: SeekAndFind

It’s all about WANTING things to crash. The powers that be WANT the economies of the world to go down. WHY? It’s the only way the globalists can institute their NWO.

Can’t get people to swallow a new cashless system if the old one is working. Spend till it crashes.

What does someone who’s facing bankruptcy do? Run up that credit card as high as they can before filing chapter whatever and get what they can while they can.


7 posted on 12/12/2012 8:37:04 AM PST by diverteach (If I find liberals in heaven after my death.....I WILL BE PISSED!!!)
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To: ClearCase_guy

This goes right along with their assertion that tax cuts “cost the government”.
They come from the viewpoint that the government owns everything, and anything they allow you to keep is at the expense of government.

They really NEVER say how much spending “costs” the government. It seems that the outflow is just a given, and can never be anything but constantly increasing.


8 posted on 12/12/2012 8:38:56 AM PST by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: SeekAndFind

Soviet America is almost complete!


9 posted on 12/12/2012 8:44:30 AM PST by vanilla swirl (searching for something meaningful to say)
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To: SeekAndFind

If Establishment Republicans had any clue they would seize on these facts, and hammer them home (with charts, TV specials, etc.) and keep repeating them until they finally settled in with even the lowest of the low-information people out there.

Conservatives understand you can’t keep spending like we’re doing, but sadly, a lot of people out there simply think we can just stick it to “the rich” to solve all of our problems. They’re never hearing the truth to the story.


10 posted on 12/12/2012 8:46:03 AM PST by Qbert ("The best defense against usurpatory government is an assertive citizenry" - William F. Buckley, Jr.)
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To: Qbert
Does anyone have an idea where all this money is being spent? DOD is getting $600B I think but where is the rest going? How much to service the debt? Is there a pie chart that breaks it all out somewhere?
11 posted on 12/12/2012 8:55:59 AM PST by RedEyeJack
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To: P.O.E.

“Trillion is the new Billion”


12 posted on 12/12/2012 8:58:04 AM PST by TurboZamboni (Looting the future to bribe the present)
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To: SeekAndFind

At this point paying taxes is like handing a can of gasoline to the man who’s going to burn down your house.


13 posted on 12/12/2012 9:37:43 AM PST by fattigermaster
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To: Qbert
If Establishment Republicans had any clue they would... (fill in the blank).

The Establishment Republicians have a clue, the problem is that they are also Progressive Socialists. You are looking at liberals with suits.

What is going on is nothing but the biggest con game in history, that will destroy all that generations have worked for for centurys. All so a select few can enrich themselves and have power over others. It is not treason to the state, it is treason to Humanity.

It will end with a super politician, worshiped by many, called the Anti-Christ in the Bible. The NWO will be established for only one passing purpose, to put Satan in charge of mankind. My guess is that it will not end well.

14 posted on 12/12/2012 9:41:06 AM PST by American in Israel (A wise man's heart directs him to the right, but the foolish mans heart directs him toward the left.)
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To: SeekAndFind

Cloward - Piven


15 posted on 12/12/2012 9:44:11 AM PST by central_va ( I won't be reconstructed and I do not give a damn.)
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To: SeekAndFind
Okay, just for giggles and grins, let's say the Central Government does get a 100% taxation rate - every penny made goes to the central Government.

That's fine for the first year. But, what about the out years?

i can just about guarantee that everyone who loses 100% of their income in year one will not be working in year two! How can they?

Think “Atlas Shrugged” writ large.

What options will the Central Government have in year two? Something along the lines of the people's Democratic Republic of Korea perhaps?

16 posted on 12/12/2012 9:56:53 AM PST by Nip (BOHEICA and TANSTAAFL - both seem very appropriate today.)
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To: MrB
This goes right along with their assertion that tax cuts “cost the government”.

Don't you just love it when liberals ask with a straight face, "How are we going to pay for that tax cut?"

17 posted on 12/12/2012 10:48:58 AM PST by Windflier (To anger a conservative, tell him a lie. To anger a liberal, tell him the truth.)
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To: American in Israel
It will end with a super politician, worshiped by many, called the Anti-Christ in the Bible.

He's already in the White House.

18 posted on 12/12/2012 10:51:16 AM PST by Windflier (To anger a conservative, tell him a lie. To anger a liberal, tell him the truth.)
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To: Nip

i can just about guarantee that everyone who loses 100% of their income in year one will not be working in year two! How can they?”””

The larger question is WHY WOULD THEY???


19 posted on 12/12/2012 12:30:14 PM PST by ridesthemiles
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To: SeekAndFind

ping


20 posted on 12/12/2012 2:44:12 PM PST by Jude in WV
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To: Windflier; American in Israel
[AiI] It will end with a super politician, worshiped by many, called the Anti-Christ in the Bible.

He's already in the White House.

Someone early this evening on AM radio, about sixish, was playing excerpts from a very, very old tape of Paul Harvey "back in the day" (like, 40 or 50 years ago) about that same point in Revelation (Liber Apocalypsis Ioannis), about people worshipping the Beast.

Then he played some black tent-shouter hailing Obama as God-sent Savior of Our People, and the people all cheering and clapping and ranting. It was a pretty amazing juxtaposition.

21 posted on 12/12/2012 10:44:50 PM PST by lentulusgracchus
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To: C210N

“The data indicate that 17,446,537 tax returns showed an income over $100,000. These returns represented a total income of $3.765 trillion.

Estimated 2012 spending comes in at $3.796 trillion (refer to page 205 here). This is still $30 billion more than a 100% confiscation of the annual income of all Americans that reported more than $100K of income for 2009.”

-—<>-—<>-—<>-—<>-—<>-—

I have been yearning to do this type of analysis myself, but never got around to it. I WILL use this article in my discussions from now on!

One way I will expand upon it is by telling/asking, “It seems too draconian to take 100%, though, right?” [”Yes”] “So let’s allow all of these people to keep $100,000.” [”Great-that’s surely enough for anyone”]... “Our government should certainly be small enough that that much should be enough, right?” [”Right”]

So, 17,446,537 taxpayers with an income over $100,000 - we let them keep their first $100K... that means instead of $3.765 trillion, they end up paying $2.020 trillion in taxes - that is about 53% of the current spending of the Federal government (only Federal, not state and local). Who is going to fund the other 47%, and how? (By the way, Corporations NEVER pay taxes- the people who buy their products pay them!) We’re clearly going to have to confiscate most of the salary of people earning $50,000/yr, or even $20,000/yr, also.

The point is, and it is made VERY well with this data - our Federal government is TOO BIG to be funded at all right now.


22 posted on 12/13/2012 9:02:51 AM PST by AFPhys ((Praying for our troops, our citizens, that the Bible and Freedom become basis of the US law again))
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