Wealthy Can't Be Taxed Enough To Pay For America's Massive Real Deficit By Walter E. Williams Posted 12/04/2012 06:39 PM ET

Is there any reason for today's Americans to care about what happens to tomorrow's Americans? After all, what have tomorrow's Americans done for today's Americans? Moreover, since tomorrow's Americans don't vote, we can dump on them with impunity.

That's a vision that describes the actual behavior of today's Americans. It would be seen as selfish, callous and ruthless only if it were actually articulated. Let's look at it.

Businesses, as well as most nonprofit enterprises, by law are required to produce financial statements that include all of their present and expected future liabilities.

On top of that, they are required to hold reserves against future liabilities such as employee retirement.

By contrast, the federal government gets by without having to provide transparent and honest financial statements.

The U.S. Treasury's "balance sheet" does list liabilities such as public debt, but it does not include the massive unfunded liabilities of Social Security, Medicare and other federal future obligations.

A conservative estimate of Washington's unfunded liabilities for the year ended in 2011 is $87 trillion. That's more than 500% of our 2011 GDP of $15 trillion.

Former Congressmen Chris Cox and Bill Archer have written an article — "Why $16 Trillion Only Hints at the True U.S. Debt," the Wall Street Journal (Nov. 26) — pointing out our dire economic straits.

They say, "When the accrued expenses of the government's entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually.

That is the total of the average annual accrued liabilities of just the two largest entitlement programs, plus the annual cash deficit."

Let's analyze that. Washington would have to collect $8 trillion in tax revenue, not to pay off our national debt and have reserves against unfunded liabilities, but just to avoid accumulating more debt. Recent IRS data show that individuals earning $66,000 and more a year have a total adjusted gross income of $5.1 trillion. In 2011, corporate profit came to $1.6 trillion.

That means if Congress simply confiscated the entire earnings of taxpayers earning more than $66,000 and all corporate profits, it wouldn't be enough to cover the $8 trillion per year growth of U.S. liabilities.

Given this impossible picture, the message coming out of Washington, especially from our leftist politicians and the news media, is that we solve our budget problems by raising taxes on the rich. If Americans were more informed, such a message would be insulting to our intelligence. There are not enough rich people to satisfy Congress' appetite.

The US government does not have to follow normal business accounting rules because the unfunded liabilities can be eliminated with a pen stroke.

We built a really nice country here but, it is bankrupt. Austerity will suck for most people.

We'd better hope that pen has a lotta ink. We're carrying over 120 trillion in unfunded liabilities.

http://www.usdebtclock.org/ 

I don't think that is correct.... Something about the math doesn't seem to add up (beyond the simple, we've spent too much as a country).
If that is true, (that the annual accrued liabilities plus cash debt is 8trillion) then we would expect that every year we would go into debt by $8trillion minus that year's tax returns. Unfunded annual liabilities didn't appear magically this year, they appeared last year, the year before etc etc... And at the point in time where an unfunded annual liability comes due and you don't pay it, an actual, real debt is created.

Seems to me that if there's that much annual unfunded liabilities being created, we must be "eliminating" it (to use HockeyDad's term) at roughly the same rate. (or at a rate of "Actual National Debt increase - annual income)

We don't really eliminate it. The debt doesn't exist until the fiscal year starts if the legislature allowed the entitlements to continue.....Businesses can't do accounting that way because they can't just cancel the entitlement/debt.


Then we collect FICA and Medicare tax from your paycheck and use that money to pay it now that it is actual debt.

My only question is... How can the guberment blame the American tax-paying citizens for not controling their personal spending through propoganda in the news media regarding mortgages, credit card debt, etc. when this is the same practice engaged by the guberment itself including far worse extremes such as TARP bail-outs, 40B a month in mortgage investments, etc. How can you tell the People not to do what you are doing yourself? Give them a hand-out with their own tax-dollars and tell them it's free - they're entitled - they're "owed" it for one reason or another, all because the rich didn't pay enough taxes.

This is the first in my lifetime when I felt that if your are successful, you are evil - you are the bad guy. You are blamed for not paying your fair share - regardless of how much of your fair share you had to pay on the road to becoming successful, or how much you're paying now. I'm not in the top 1, 2, or even 10% or top earners but I always strive/work to be. Just like my immigrant ancestors that sought the US legally through Ellis Island looking for a better life in America. Taxing the rich is not the answer and will not cover all the entitlements, loans, etc. for those that will not spend within their means and work for it - guberment and its employees included, or those coming to the US illegally seeking and getting a free hand-out in the form of Social Security, Disabiity, Welfare, etc.

YOU DIDN'T BUILD THAT!

The war on the rich has already been extended to the war on the upper class. Eventually it will be extended to the war on the upper middle class. This is becoming entrenched rapidly and is not going away any time soon. Its the new "American Dream".

In about 10 years I pity the last couple of thousand people left working and still able to pursue the American Dream...they're gonna be taxed right out of their minds.

The war on the middle classes has been going on for time immortal. The rich are the greatest of all protagonists. They enlist the poor and unwise to fight their wars while they laugh with ruthless abandon.

It is in the way of things . . . .

Oh come on... let's stop the pity party here.

"I feel like everyone hates me for being successful!!!"

BS.
My goal is to continue with success in my life, my friends all have goals to be successful in life. No one is demonizing success, that's pure bs.

Right.


They champion tobacco by taxing it too.

Trying to take sh&t from people who have more of it is much different than demonizing.

I have yet to hear a single person I know say "I wish I were poorer so my income tax rate were less".

If you had a bunch of cash, and I said, "Z, give me 30% of your cash, because I'm victor"... I'm not demonizing your acquisition of cash or even criticizing you for your ability to earn it. I'm just taking it.

Ah, yes. And how long have you sat on the Federal Reserve Board?

Who would not be jealous of a man who hangs out on a cigar auction site? Truly, you are the hated rich . . . .

Out of my cold dead hands Victor.....

So, I got a small bonus this year and 25% of it went in federal taxes.
Guys like Romney, who live off his intrest income only pay 13%.

So riddle me this, the money I bust my hump for gets taxed at almost twice the rate of money that comes from simply owning and doing nothing and they call that fair?

Then I get to hear snot nosed misanthropes whine about stealing from the rich? Boy, ain't that America?

Your "guaranteed" a check from your employer. You are not putting any monies at risk, therefore you are taxed at a higher rate.

Invest your cash. It's a risk. There is no guarantee on income like there is a paycheck. For that investment and risk you are rewarded with a lower tax rate.

Until recently we were trained to defend and emulate the rich upper class because we were taught to believe that it was an achievable dream if we delayed our gratification & worked hard (and smart).

:-k

BWAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAHAHAHAHA! [gonzo] [gonzo]



Brewha, one of my kids' caretakers complained about that same thing and will be cutting back hours in order to pay less tax.😲

Yes, the airline workers are "guaranteed" layoffs, pay cuts and underfunded pensions . . . .

Put some salt on your pretzel logic and more will swallow it.




Bloody – it kind of restores your faith in the nation to see people take charge of their finances like that . . . .

There is no 13% tax bracket for anything so I'm 98.2% sure you made that up. With that said, I see no reason why earned income, dividends, long term capital gains, and short term capital gains should not be taxed at the same rate.

...and you are still a peasant so get back to work.

All Income tax should be at the same rate. Rich or poor, everyone pays their fair share. I realize that I'm saying this at a high level, but I don't see the logic in why someone would be taxed differently just because they make more or less money or how they make their money.