Hiding Future Tax Hikes on Tax Day 2011
Today, April 15, is typically Tax Day. Taxpayers would usually be furiously figuring out how much they owe Uncle Sam right about now. In case you didn’t know it, taxpayers this year get a three-day reprieve because of a holiday in Washington, D.C., commemorating President Abraham Lincoln’s emancipation of slaves in the District.
No matter what day Tax Day falls on in coming years, we’ll all be paying considerably higher taxes unless Washington’s reforms its reckless spending ways immediately. To make matters worse, Washington has been able to hide this enormous potential tax hike through all the deficit spending it is doing now.
In 2010, the federal government collected about $2.2 trillion in total tax revenue. Income taxes accounted for $900 billion of collections, or about 40 percent of all tax receipts. The federal government spent around $3.5 trillion, with the resulting deficit of $1.3 trillion made possible by borrowing.
If Congress, rather than borrowing or cutting spending, raised income taxes by the $1.3 trillion necessary to pay for 2010 deficit spending, it would need to more than double income tax collections.