Factcheck–Does Washington have a spending problem or an income problem?

The biggest share of federal spending now goes for Social Security (20.4 percent in 2010) and Medicare (13.1 percent), the two entitlement programs that big majorities of Americans want to protect from any reductions, according to a recent poll. Together these two programs for senior citizens consume more than one-third of spending, far more than national defense, which accounts for just 20.1 percent, despite the increases of recent years….

Who pays all of these taxes? The best information on that comes from the Congressional Budget Office, which has tracked the tax burden for many years. The most recent complete data cover 2007. CBO figured in that year more than half of all federal taxes was paid by the top 10 percent of income earners. They paid 55 percent of all federal taxes in 2007, CBO said.
That’s a comprehensive figure, counting the income tax, payroll taxes, excise taxes and even the corporate income tax (borne by stockholders in the form of reduced dividends and appreciation). And perhaps surprisingly, the top 10 percent of earners pay a greater share of federal taxes now than they did before the Bush tax cuts, which Democrats constantly criticize as a giveaway to “the rich.” The top 10 percent paid 50 percent of all federal taxes in 2001.

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Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Economy, Federal Reserve, History, Medicare, Social Security, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

7 comments on “Factcheck–Does Washington have a spending problem or an income problem?

  1. Dallasite says:

    Washington has a political problem. The Democrats and Republicans should tell their respective zealots (Tea Party Vs. MoveOn types) to go jump in the lake. Both ends are filled with people who want to see the nation go down in flames.

  2. Mark Baddeley says:

    One of the more helpful things I’ve seen in getting an understanding of the issues. Thanks Rev Canon Dr Harmon.

  3. BlueOntario says:

    [blockquote] and even the corporate income tax (borne by stockholders in the form of reduced dividends and appreciation) [/blockquote]
    Unless you’re Jack Welch and your holdings are in GE.

  4. Creedal Episcopalian says:

    It’s not so much a “spending” problem as an “already spent it” problem. Hence the national Debt. More spending is not the way to fix the problem.

    [i] Mouth frothing Tea Party zealot. Or should I say, constitutional conservative.[/i]

  5. Already left says:

    But I thought that people receiving Social Security were just getting some back that they put into their “bank” though the years.

  6. Creedal Episcopalian says:

    Already left:
    That was the claim in the 30s. Two problems.

    -The amounts disbursed are greater than the present worth of contributions for many who have been in the system.

    -Social Security expenditures exceeded the program’s non-interest income in 2010 for the first time since 1983. the administration is counting on an improving economy to ease the SS deficit.
    The reason #2 is a problem?
    [url=http://www.ssa.gov/history/BudgetTreatment.html ]In early 1968 President Lyndon Johnson made a change in the budget presentation by including Social Security and all other trust funds in a”unified budget.”[/url] Congress was now able to spend the “Trust fund” ( the one that was in Al Gore’s “Lock Box”), in return for a promise that those who pay taxes, (a portion of those those who are entitled to receive Social Security), would pay it back when needed. It’s needed now, and the only place to get the money is by more taxes.

    How Bad is it?
    From Forbes, by way of The SS Administration’s own actuaries:
    [url=http://www.forbes.com/2009/05/14/taxes-social-security-opinions-columnists-medicare.html ]To put it another way, the total unfunded indebtedness of Social Security and Medicare comes to $106.4 trillion.[/url]

    The nation’s total private net worth is only $51.5 trillion.

    Keywords: Ponzi. Broke. Bankrupt. Default

  7. J. Champlin says:

    To Kendall Harmon and T19 — thank you again for a factual, informative, and balanced piece that I never would have found on my own. It’s postings like this — both of broad interest and those focused on the church — that keep me coming back to the site.