.
I don't really know how to react to this data.
The combined value of the financial system bailout / stimulus in the Bush and Obama administrations is, as popularly reported, $1.2 trillion dollars. That is a number so big it is difficult to comprehend.
According to the Tax Foundation (which summarized IRS data), approximately 32% of US tax return filers owe no taxes. The balance of the 138 million filers bear the total burden of taxation.
Putting those two data groups together, if you in fact do pay taxes, the Bush-Obama adminstrations have just committed you personally to perpetually borrowing $12,632 with no intention of paying anything other that the interest each year. You had already been committed to a debt load of about $120,000. Now you are personally in debt through your federal government by something close to $135,000. That means that your "national" net worth - whatever it is - is lower by the same amount.
Assuming you, being the government, pay 3.5% (by issuing bonds) your federal taxes have just increased by $442 each year (in addition to approximately $4,500 you already owed each year to pay interest on your share of the national debt). As far as anyone can tell, this is the load you will pass on to your children, grandchildren and beyond. When the principal amount of the bonds come due, you - again being the government - will just issue more bonds. The principal, the national debt, will never be repaid.
The IRS numbers indicate the average taxpayer owes about $10,000 in federal taxes each year, so the added burden from the stimulus interest is an added 4% in taxes. Those are averages, and misleading, because the top 1% of taxpayers pays five times that amount according to the Tax Foundation.
Those are the numbers. Is the added debt load and annual cost worth it?
Wednesday, March 18, 2009
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