Paying For Washington's Mistakes

Investors .com ^ | November 3, 2009 | INVESTORS BUSINESS DAILY Staff

[Kaslin]

Taxation: Policymakers piled up a $1.4 trillion deficit for fiscal 2009. The figure is so high that if Congress were to use the income tax to balance the budget, rates would have to be nearly tripled.

The 2009 deficit was larger than the combined federal debt of the first two centuries of the country's existence. As staggering as that is to the mind, the 2010 deficit projects to be even bigger, roughly $1.5 trillion.

The rates for joint filers earning at least $373,601 would have to be almost tripled, from 35% to 95.2%, to help close the 2010 deficit. (See table.) Though the brackets are at different income levels, the rate progressions are the same for single filers.

The rates would not be as punitive in 2012, when the deficit is smaller, but they would still be excessive. Those at the top of the income scale would be moved from 39.6%, the rate that will be reinstated after the Bush tax cuts expire, to 74.1%.

Unless Washington issues another foolish stimulus package or decides it will continue its ill-advised bailout business, the deficits should moderate somewhat. But the debt created by the deficits will still have to be paid. Ultimately, taxpayers will have to satisfy Washington's massive tab.

While it's unlikely policymakers would try to use income tax revenues — which provide almost half of all federal revenues — to close the deficits, it's instructive to see how high the rates would have to go to do that. Data from the Tax Foundation show this Congress and administration are poor stewards of other people's money and are failing their constitutional duty to protect the future of the republic.

[Kaslin]

[Repeat Offender]

Paying For Washington'sidiot voter Mistakes

Elections having consequences and all.

[arthurus]

if Congress were to use the income tax to balance the budget, rates would have to be nearly tripled.

and that would, of course, cause income to fall as people realize they are at best treading water and strive to earn less or move their incomes offshore or leave the country themselves. Tripling the rates would make for a "shortfall" which would have to be made up by doubling them again. Anyway, what is triple 39%? How about a 100% wealth tax? If that brings in x trilion dollars then it could be done every year and Uncle Sam would surely be out of the financial woods, no?

[boop]

Rush said something like this years ago. If you make a million dollars and the tax rates go to 90%, you’ll only work until you make 100,000 the next year and stop. Who would be stupid enough to work to pay at 90%?