A friendly reminder from Howard Dean on tax day
posted at 2:48 pm on April 15, 2013 by Guy Benson
I wrote about the following exchange at the time, but Dean’s cautionary candor is especially relevant on this, the dreaded 15th of April:
“The truth is everybody needs to pay more taxes, not just the rich.”
Indeed. But even if many more people paid a lot more taxes, those receipts still wouldn’t keep pace with Washington’s spend-and-promise rapacity:
The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure…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. Nothing like that $8 trillion amount is available for the IRS to target. According to the most recent tax data, all individuals filing tax returns in America and earning more than $66,193 per year have a total adjusted gross income of $5.1 trillion. In 2006, when corporate taxable income peaked before the recession, all corporations in the U.S. had total income for tax purposes of $1.6 trillion. That comes to $6.7 trillion available to tax from these individuals and corporations under existing tax laws. In short, if the government confiscated the entire adjusted gross income of these American taxpayers, plus all of the corporate taxable income in the year before the recession, it wouldn’t be nearly enough to fund the over $8 trillion per year in the growth of U.S. liabilities. Some public officials and pundits claim we can dig our way out through tax increases on upper-income earners, or even all taxpayers. In reality, that would amount to bailing out the Pacific Ocean with a teaspoon.
Gallup’s tax day poll reveals that 95 percent of Americans believe they’re either taxed fairly or too heavily. But if they also continue to abet politicians’ zealous resistance to fundamental changes to save our unsustainable entitlement programs, they’re going to see a lot more “fairness” heading their way — sooner rather than later. And the status quo safety net still won’t be sustainable.