Top 2% of Tax Payers will Pay for Obamas New Bloated Budget of $3.7 Trillion?

The truth is that if you taxed them (top 2%) at a rate of 100%, you still would not raise enough money to pay for all of his wasteful spending, but what you would do is leave our economy a basket case, which would result in less revenue being collected. Total government receipts have averaged 17.9% of GDP since WWII. If our budget this year represented that figure, then it would only be 2.506 trillion dollars based on a GDP of $14 trillion. So one might think that our fiscally responsible President Obama would be somewhere in that ballpark with his new budget, but no, he has instead proposed a budget costing $3.7 trillion, which is 26.4% of a GDP of $14 trillion. Does this man have no morals? Where does he think this money will come from? How much longer will the rest of the world believe that "some day" we will get our financial house back in order? So what planet does Obama live on? Is he serious that he wants us to spend over 26.4% of our nations GDP just to fund the federal government? Will the people of this country ever wake the Hell up and realize that this man is leading us down a road to total economic collapse even worse than that of the Great Depression? I sure hope they will, and if they do, I hope they kick every last big spending politician out on their butts, which would only leave 30 or so left out of 536. After that, we could start over, and do it the right way. jbranstetter04 The 2% Illusion President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it. On Tuesday, he left the impression that we need merely end "tax breaks for the wealthiest 2% of Americans," and he promised that households earning less than $250,000 won't see their taxes increased by "one single dime." This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions. Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income. Note that federal income taxes are already "progressive" with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need. But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion. Fast forward to this year (and 2010) when the Wall Street meltdown and recession are going to mean far few taxpayers earning more than $500,000. Profits are plunging, businesses are cutting or eliminating dividends, hedge funds are rolling up, and, most of all, capital nationwide is on strike. Raising taxes now will thus yield far less revenue than it would have in 2006. Mr. Obama is of course counting on... Link to the rest of the article: http://online.wsj.com/article/...

Channel: News & Politics
Author: jbranstetter04

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