The Financial State of the Union

What income tax rate do we need to have in order to cover government spending without incurring more debt (or printing more money)?

The US Debt Clock as of today shows government spending of $10.2 trillion (Federal, State, and Local combined)

Since taxes ultimately come from income (directly for the income tax or indirectly for taxes like property and sales) - What is our national income?

Social Security publishes an incredibly informative wage statistic every year - The 2020 Wage Statistics shows an average income of $53,383.18.

Total wages/salaries/commissions for 2020 was $8.9 trillion.

Can you see the problem?

To get $10.2 trillion out of $8.9 trillion in W-2 income would require a tax rate (no exemptions) of 114.6%.

In other words - if you made $1,000 this week, our governments need $1146 from you.

It takes work to try to figure out what our total income is. The Wage Statistics report does the best job of telling us what W-2 income is vs. IRS Tax Stats as some people don't have to files returns.

Other income basically falls into 3 categories - business income, investment income, and retirement income. It takes many months to get the final personal tax stats for the year, and several years to get the C Corporation tax stats.

In researching for my book, I found that W-2 income comprises about 70% of all income.

This would give us a total income for 2020 of $12.7 trillion. This is just an estimate, but should be within a few hundred billion of what the final stats show.

That drops the required tax rate to just 80.3% of all income.

Now before you get too excited about getting to keep 19.7% of your income, there's more to the picture.

We haven't discussed public and private debt.

We haven't discussed the un and under funded liabilities of Social Security, Medicare, and public and private pensions.

I don't want to ruin your Christmas too much, so for now I'll let you believe that you can at least keep some of your income.

Maybe the IRS Christmas motto should be:

Ho, Ho, Ho - Send in your dough!

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Resources for USA Prepares - November 26th

11/25/2021

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Sandpiles - What they tell us about our future

Fifth Generation Warfare

Who Will Be Brave in Huxley’s New World?

The War on Science and the 20th Century Descent of Man

The Origins of the Counterculture Movement: A Gathering of Anarchists, Occultists and Psychoanalysts for a New Age

$53,383.18 - The 2020 Average Wage

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Special Links:

The last Dr Tennant Virtual Conference

My New Blog For My Grandkids - johntrek.com

If we have time:

Bill Gates says you should read this book

The Aspen Institute

Socialist Revolution

Schwab - The Fourth Industrial Revolution

Armstrong Economics

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Resources for USA Prepares - March 5th

3/5/2021

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We'll talk about what we didn't get to on February 19th

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(Video) How One GMO Nearly Took Down The Planet

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