Monday, February 09, 2015

Can we please balance the budget?

The GDP of the United States was estimated to be $16.8 Trillion in 2014. The "GDP per capita" was $37,075.50. (Now, given that this calculates a total population of 316.1 million people, I'm guessing that some of that is business to business. We don't have that many wage-earners in the US yet. But I'll use the number anyway.)

The 2014 Federal expenditures were $3.7 Trillion. That included a $483 Billion deficit.

If every wage earner, both individual and business, paid the same flat tax rate to the Federal Government, that tax rate would need to be 22.44%, or an average of $11,927 out of that $37,075.50. (by the way, that doesn't take into account the number of actual wage earners, it's total population in including our kids and elders.)

Now, 22.44% is a slightly higher tax rate for Americans than we are used to.  Here's a graph showing what it has been over the last half-century:

If you consider that with a balanced budget we could really get serious at creating jobs, rebuilding our crumbling infrastructure and actually start paying down the Debt, maybe this would be worth it.

But, nobody is talking about charging everyone $11,927.  Some people earn more, and they pay more.  Some people earn less, and they pay less.  But if we all paid our share, and we stayed focused on the idea that we need to pay enough to balance the budget, we could.

Do we want to?  I do.