It is arithmetically impossible to support progressive promises with a “tax the rich” plan, reported David Burton, The Heritage Foundation’s senior fellow in economic policy.
Because the new American progressive or socialist agenda requires increasing federal expenditures anywhere from 100% to 161%, the amount of income earned by the rich is too small to cover it.
In order to cover the national debt and just half of the progressive agenda, the federal government would have to confiscate every dollar earned by every taxpayer with incomes of $200,000 or more — a “very expansive definition of the rich” as Burton put it.
Burton concluded that “Even in the fantasy world where all income of those earning $200,000 or more and all corporate profits were confiscated and yet those individuals and businesses continued to earn the same income, the progressive program still comes up $13.2 trillion to $57.8 trillion short. To fund the lower cost-estimate shortfall, it would be necessary to increase middle-income taxes by $13.2 trillion to three times their current level (an increase of 216 percent). To fund the higher cost-estimate shortfall, it would be necessary to increase middle-income taxes by $57.8 trillion to 10.5 times their current level (an increase of 948 percent). In the real world, the necessary middle-income tax increases would be radically more since the hypothetical $27 trillion from a 100 percent flat tax will never materialize.”
The lower-cost estimates would also place the U.S. only behind Finland and France for the most spending by an industrialized country. If U.S. spending reached the higher-cost estimates, it would far exceed the spending of every other industrial country.
H/T: Heritage Foundation