Biden ’s Math of Just Taxing the Rich Doesn’t Add Up

Adam N. MichelDespite the headlines, thePresident ’s 2024 Budget demonstrates how challenging it is to raise significant new tax revenue from a  small minority of wealthy taxpayers. The budget raises about $1.8 trillion from non‐​corporate taxpayers over ten years. Yet, following all the rhetoric about the rich not paying their fair share, it should be striking that across more than twenty new and expanded taxes, the administration’s plan does not even raise enough revenue from wealthy taxpayers to cover new spending proposed in Biden’s budget, let alone theprojected $20 trillion deficit over the next ten years.So, what ’s going on? Bypromising the American people he would only raise taxes on people earning over $400,000, President Biden has made his budget math next to impossible. There is simply not enough income at the top of the distribution to cover the projected federal budget deficit, let alone a  significant expansion in federal spending over the next decade.What ’s left to tax?Using IRS data, we can illustrate the difficulty of raising a  lot more revenue from a narrow segment of the population.In 2020, theIRS reported that there were 164 million individual tax returns filed, with $12.6 trillion inAdjusted Gross Income (AGI). AGI includes wages, capital gains, and personal business income, in addition to other forms of income and adjustments for things like student loan interest and retirement contributions. This IRS data can show an upper bound on ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs