Monday, October 14, 2013

Our "crushing" national debt

Tea Party members and even the less radical GOP folks get red faced when talking about our national debt.  It's a very large number - $16,753,925,891,000 when I looked this morning and increasing steadily.

But let's look at it per taxpayer.  I couldn't find all the numbers I needed later for than 2009, so I'll use that. It's inaccurate, of course, but it does tell the tale.

There were 137,982,203 taxpayers that year, so each of them is responsible for $121,420.00 of that debt.   While that may still be a "crushing" figure to some taxpayers, it's less than the mortgages that many others carry and, unlike a mortgage, doesn't have to be paid off in 20 or 30 years.  A lifetime of work is a more reasonable figure, so let's look at it as though we all had 50 years to pay it off - that's less than $2,500.00 per year per taxpayer.

Is that fair?  I think so - after all the GOP says we are passing this debt to our children and unless we increase taxes radically, we will be.  I don't know why we shouldn't - this debt came from wars that were not funded.  It's hardly unreasonable to expect that future generations pay for wars that protected their future.

Yes, I'm pretending that our wars were necessary and useful. Whether they were or not has nothing to do with paying for them.

These calculations ignore interest on our debt and also assume that we won't spend more money on more wars.  On the other hand, they also ignore inflation:  that $2,500 per year figure might be a day or two's wages in a few decades.

But there's another important thing that I ignored:  we have plenty of poor people who may pay some taxes but honestly cannot afford anything close to $2,500 per year.  That increases the burden on the rest of us, so  many of us will have to pay more.

I agree.  So let's again use figures from 2009 and apportion the debt where it belongs.  Or if not where it belongs, at least where it will fall based on the income taxes we each pay. Fair?

The top 1% of taxpayers paid 36.73% of all taxes that year, so they should get 37.63% of the debt.  I think they should pay for more of it, but let's leave it there.  Here is what it looks like:

Percentage Number of taxpayers Adjusted Yearly Gross Income Percent of all Taxes Paid Amount of debt
Amount of debt each  Amount of debt over 50 years
Top 1% 1,379,822 over $343,927 36.73 $6.16 $4,464,344 $89,286
Next 4% 5,519,288 over $154,643 21.93 $3.68 $666,752 $13,335
Next 5% 6,899,110 over $112,124 11.81 $1.98 $286,993 $5,740
Next 15% 20,697,331 over $66,193 16.83 $2.82 $136,249 $2,725
Next 25% 34,495,551 over $32,936 10.45 $1.68 $48,702 $974
Bottom 50% 68,991,102 under $32,936 2.25 $0.37 $5,363 $107

Now, I don't know where you fall in that table, but I can tell you that I do not feel "crushed" by my share.  I'd like it to be lower, but if all those stupid (in my opinion) wars must be paid for, that's what it is.

Of course each bracket also covers a range.  Some people who are in in the top 90%, but not in the bottom 75%,  will pay more than the $2,725.00 per year shown here and some will pay less, but it all works out somewhat fairly.

Also note that for most of us, that' would require only an extra 3% or so off the top.  We could start paying this off immediately if we raised taxes just that much.

I can afford my share.  So can you.

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