The United States’s budget outlook is bleak, and it’s only going to get bleaker as the American population ages and debt continues to accumulate. Indeed, within just three decades, spending on Social Security, Medicare, and paying the interest on the debt is projected to exceed total revenues. That means all of your tax dollars will go to those two programs and interest to America’s creditors alone, leaving nothing left for the innumerable other things the federal government spends money on.
It’s become an article of faith among progressives confronted with the reality of this rampant overspending that the solution lies in the wealth of the richest Americans. Simply make the rich pay their “fair share,” they say, and debt problems will melt away, allowing Congress to go back to its favorite pastime of spending money guilt-free.
That’s enormously wrongheaded. Most Americans have little conception of the relative difference between the fortunes of the wealthy and the sheer volume of resources the federal government churns through on a daily basis. The fact is, even the richest Americans do not have anywhere near the resources to save the United States from its predicament.
Elon Musk, the richest man in the world, currently has a fortune estimated to be around $190 billion. Even if the federal government managed to confiscate and liquidate Musk’s entire wealth tomorrow, that’s enough money to fund the federal government at fiscal year 2022 spending levels for less than 12 days.
Musk’s wealth appears even more miniscule compared to the absolutely gargantuan national debt — it’s less than a percent of the $31.3 trillion national debt. It’s not even enough to cover the deficit between what the federal government takes in and what it spends for this year alone — $190 billion is less than 20 percent of that amount. Deficits are on track to exceed $2 trillion every year by the end of the decade.
Part of the problem is that Americans often assume that the wealthy are a lot more numerous than they are. A YouGov survey at the beginning of the year found that Americans believe that about 20 percent of their fellow citizens have an annual income over $1 million. That number is actually well below 1 percent. Indeed, the annual income threshold to be a part of the “1 percent” is actually about $548,000, not even particularly close to $1 million.
What’s more, despite what the average progressive would have you believe, our tax code is already extremely progressive. The top 1 percent of Americans already pay over 40 percent of all income taxes, nearly double the share of income that they earn. The bottom half of American income earners earn about 11.6 percent of all income, but pay less than 3 percent of all income taxes.
America’s fiscal problem is not that we don’t tax the rich enough, it’s that we spend far too much. Just two decades ago, the federal government spent just over $2 trillion, taking in $1.85 trillion in revenue. The year before, the federal government ran a surplus, something it has not done since. This year, even after the pandemic-era spending of over $6.5 trillion each year has wound down, the federal government is set to spend $5.8 trillion. Tax revenue has exploded too, just not as fast — set to reach $4.8 trillion this year.
The culprit isn’t a secret — spending on healthcare and retirement programs is exploding. Twenty years ago, Social Security and Medicare cost taxpayers $706 billion. This year, these two programs will cost taxpayers more than three times as much, or $2.2 trillion. Thirty years from now, those two programs will cost taxpayers a stunning $9.2 trillion. On top of that, taxpayers will pay $5.4 trillion just on interest on the debt — nearly equal to total spending this year.
Considerable as the wealth of the rich is, it remains dwarfed by the size of the federal government’s ledgers and the magnitude of its fiscal irresponsibility. Taxpayers must demand that politicians are willing to tell the hard truths about America’s spending problems and the danger that future generations are in without a serious rethinking of how we plan to solve them, along with solutions that go beyond unhelpful class warfare platitudes that overstate the ability of our country’s wealthy to save us from Congress.
Andrew Wilford is a senior policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax and fiscal policy research and education at all levels of government.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.