Let’s do some math. (Oh stop complaining, I’ll make it as simple as possible).
According to the latest census figures (these came from the Obama administration so feel free to give some leeway in their veracity, but I thought I’d play in their ball park to be fair) there are 117,181,000 households in America.
The top quintile (top one-fifth) is comprised of 23,436,200 households (117,181,000/5)
According to census figures, the lowest end of that one-fifth makes $137,642 and the average for the top quintile is $170,844.
Now if the average of the top quintile is $170,844 and there are 23,436,200 households in that group then that means that the top quintile made $4,003,934,152,800 (4 Trillion Dollars).
Now, according to the New York Times, the top quintile paid 69.3% of income taxes in 2006 (I can’t find 2009 numbers because I have no research staff and limited time…Paul Krugman has neither limitation and still has yet to say anything intelligent in decades)
So let’s be really generous to the liberals and say the top quintile only paid 50% of income taxes in 2009 (I’m spotting them 19% because I can’t be sure of what the actual number is, I think that’s more than fair). 50% of 1.4 Trillion is 700 Billion. If the top quintile made 4 Trillion and paid .7 Trillion that means they paid 17.5% of their income to the federal government (it only goes up to 24% if you take the 2006 percentage). So clearly rich people have really good tax lawyers to avoid currently paying the full 35% that the top marginal rate is currently at. However since I don’t hear Obama arguing to scrap all the exemptions, it really isn’t a relevant issue.
But Obama wants to raise taxes on the rich. Will that solve our budget problems?
Let’s say we go back to pre-Reagan taxes, an increase of 35% and still assume the accountants can save their clients from 18% they currently are dodging. (In case you’re wondering the guy at the bottom of quintile makes $137K if he has a good CPA, 17.5%+35%, is only taking home, will only be taking home 65K before the state takes it share…rich beyond the dreams of avarice indeed, don’t you feel safe knowing those Democrats are out there making sure those evil rich are paying their fair share?).
35% of 4 Trillion dollars that was earned by the top quintile is $1,401,376,953,480.00 or 1.4 Trillion Dollars (4,003,934,152,800 x .35)
So if we went with the most outrageous scheme to tax the rich we’d raise 1.4 Trillion dollars.
The 2010 Budget was 3.552 Trillion. That’s $9,731,506,849 a day (3,552,000,000,000 / 365). So let’s say that Obama raised the tax rate to obscene levels and raised that 1.4 Trillion…how long before he spent it all? Let’s see $1,401,376,953,480.00 divided by 9,731,506,849…hmmm…carry the one…five goes into thirty…six times seven is the answer to everything…oh that’s right 144 days 5 minutes and 54.8 seconds. So even if he immediately raised taxes and collected all that money that would only give us another 144 days before we go broke. What’s 144 days after August 3rd the day we hit the debt limit? Oh that’s right December 25th. Merry Christmas, we’re bankrupt. Not only is the country broke but the rich have had most of their wealth stolen from them.
You know the rich still have like 30% of their income. Maybe if we stole all of it we could make it to Valentine’s Day. Honey, here is an IOU for the roses and chocolates I couldn’t afford.
Now you could argue that Obama doesn’t want to raise the top tax rate by 35% but that would be insane because a 35% hike will only get us to Christmas, anything less than that would be insanely irresponsible…
Just a thought…
Perhaps the answer isn’t raising taxes on the rich (although I’d be fine with getting rid of loopholes) and maybe not spending 9.7 Billion dollars a day. Maybe drastic cuts are the only way to save this country. But that’s just what the wacky thing called math says. Anyone who has ever looked at Keynesian economics or the budget from a Democratic President knows Democrats don’t believe in math.
Don’t believe me? I’ve put up all the numbers and showed all the links. Check the math yourself.