U.S. debt at $33.5 Trillion (October 2023)

The current U.S. national debt is over $33.5 Trillion, as of October 2023.
This is a 47.5% increase above what it was 4 years ago.

That is $199,404 per each household filing a tax return, or about $148,800 per each individual person filing a tax return.

Keep in mind that the bottom fifty percent of households filing income taxes, with incomes below $42,184, only paid 2.3% of the total income taxes collected (in 2020).
Not counting the top 1%, the rest of the top fifty percent paid 55.3% of the total income taxes.
This means that households with incomes between about $42,000 and $548,000 pay around half the taxes. And so each of these "middle-income" households will be responsible for an average of about $200,000 of the debt.

If we factor in that household does not get to keep all of its income and must pay taxes, that $200,000 is more like the equivalent of $260,000, from the perspective of that household if they were not liable for paying taxes. It would take them that many years of income to pay off their share of the debt.

Interest rates have also been rapidly rising, which will eat into the government budget, to pay the return rates on this debt. The current yield on a 20-year U.S. Treasury bond has recently gone above 5%.
5% of 33.5 Trillion is 1.675 Trillion, which is about 34% of the government's annual revenue. That is percent of the tax revenue going just to make interest payments on the debt.

 

yep, wages need to increase for sure, raising the min wage would help

and reverse all the tax cuts on the rich we have had over the last couple decades

the other thing hurting Americans is the corps designing their products with planned obsolescence in mind

 

That will have to happen, combined with painful government spending cuts.

You can be sure tax rates are going to go up on all levels of the middle class as well.

 

ending the two 20+ year wars was a good move, that was over a 1\3 of our debt

if wages increase, that brings in more taxes, tax rates do not need to rise on the middle class

 

At some point this is going to very obviously near a crisis. Either that or inflation will start ramping up, as the government finds itself in a vicious spiral of inflation, and rising interest rates in response to that inflation, and even more exponential inflation if the Federal Reserve attempts to keep rates down in the face of higher inflation. (Also another separate spiral of inflation as the rest of the world begins dumping the U.S. dollar in response to high inflation)

 

Let's also not forget that the Social Security program (which provides for older retired people) is also running out of money, and will need either an increase in payroll taxes or a separate injection of money from the general fund (normal government budget) to be sustainable.
That's going to need about $2.9 to 4.9 trillion by 2034 to 2037.

thread discussion: Possible fixes for the Social Security Program

This is only going to exacerbate the debt problem, adding another front of liabilities onto the government budget.

They estimate it would require a payroll tax increase of 2% to deal with the deficit of Social Security funds. (That would be on top of any other tax increase to deal with the National Debt )

 

Any tax cuts will always benefit the highest earners because they pay most of the taxes. It doesn't matter to cut the taxes of people who already pay little or nothing.
All Americans are undertaxed.

 

remember the covid checks, the right said people earning over 100k were rich so capped it there, same can be done with tax cuts, created a cap for the max cut amount

 

Then the cuts won't amount to anything. Remember the problem is that no one is paying enough.

 

Indeed. https://www.commondreams.org/news/trump-bush-tax-cuts-fuel-growing-deficits

 

sure they would, they would just have a max $$$ amount they can be

 

Funny thing is that after Bush's cuts he scored the LOWEST deficit since WW II. Of course at that point he had a GOP controlled Congress.

Our problem is not enough revenue, it's too much spending. A far more difficult problem to deal with. 60-65%, or more of our spending is legally mandated, including debt service.

The problem with raising taxes is that while lower bracket people have little available to adjust their income, the lower quintiles are primarily wage earners and so have few options.

A few years the fiscal wizards in Washington had a great Idea. Since only the rich had huge private yachts, why impose a large luxury tax on new yachts. Sounded great; the idea pencilled out to major bucks to the government. What could go wrong.?

Time's up. What happened was the rich decided to make do with last's years boat. Shipbuilder jobs dried up, fired workers went on welfare. And some boatyards went out of business.

 

One thing to look at is how capital gains (like on stock market profits) is taxed separately from personal income. I suspect the rich leaders in the Democrat Party will try to divert attention away from that issue. (You can earn a billion dollars in capital gains and still only pay 20% taxes on it, because it's in a totally separate category from the progressive brackets of normal income taxes)
Though this is a separate issue.

But I still think it's a dangerous (and irresponsible) thing to be saying "Let's not worry about the national debt and huge budget problems because we can always just increase taxes."
I don't think it's going to end up being that simple. There will be tax increases, it's a near guarantee, but there is also going to have to be some big budget cuts at the same time.

Maybe if the country were able to stop running budget deficits now, I'd take a less dim view of that idea. I mean, if it will be so easy to increase taxes, do it now. Do it before you start advocating anything else or making the presumption that it will be easy to do.

 

Most of the people to whom the "cuts" would apply already pay little or nothing.

 

We have already demonstrated we really can't/won't cut spending.

 

the cuts are mainly for the middle class, but the rich would get only as much as the cap allowed, so about as much as the middle class

 

While nearly all Americans pay taxes, the composition of the type of taxes paid is very different for taxpayers at various points in the income distribution. Affluent Americans pay a larger share of their income in individual income taxes, corporate taxes, and estate taxes than do lower-income groups.

Who Pays Taxes? - Budget Basics
https://www.pgpf.org › budget-basics › who-pays-taxes

Major tax expenditures — such as lower rates on capital gains and dividends, deductions for charitable contributions, and deductions for state and local taxes — tend to benefit higher-income taxpayers more than lower-income groups. CBO estimates that the top quintile of taxpayers receive 44 percent of the value of major tax expenditures, while only 11 percent goes to the bottom two quintiles. However, even with substantial tax expenditures, the top one percent of American taxpayers still pay an effective tax rate of 31 percent, on average, while the bottom 20 percent of the population pay an average of 4 percent.

TPC estimates that 67 percent of taxes collected for 2022 came from those in the top quintile, or those earning an income above $189,200 annually. Within this group, the top one percent of income earners — those earning more than $982,600 per year — will contribute 26 percent of all federal revenues collected.

 

so, people don't need to be rewarded for making more dollars, the making of more dollars is the reward

were talking people making more than 400k, not the top half vs the bottom half

"those earning more than $982,600 per year — will contribute 26 percent of all federal revenues collected."

which is less percent wise per dollar than the middle class

 

". . . As a whole, the U.S. tax code remains progressive — with higher-income taxpayers paying a greater share of their income in taxes. That is true despite the fact that high-income Americans benefit disproportionately from tax breaks, otherwise known as tax expenditures. . . ."

And again, no one pays enough.

 

most of the income of the rich is not from labored income, people are taxed more for the income they labor for

 

And they pay a smaller percentage.
Personally, I'm indifferent to whether people "labor" for their money. It's all the product of labor somewhere along the line.

 

they pay a bigger percent per dollar they earn

if I earn a $1,000,000 and pay 20k tax
and you earn $100,000 and pay 10k tax

yes, I paid twice as much tax, but I would have paid way less tax per dollar I earned

tax per dollar earned is what counts...

 

No, they do not.

 

yes, the middle class do, we saw Trump and Romney's taxes paid

 

Anecdotes are not data, and the data say otherwise.