As Congress continues to discuss the Big Three budget debates happening over the next four months, the President and his allies in the Senate are continuing to talk about increasing taxes as part of any deals. They will talk about taxing corporations, and the “wealthy.” But how does taxation take place in Washington?
Yesterday, Tea Party Patriots highlighted where the federal government spends your tax dollars. Today, we’ll examine what taxes the federal government takes in. According to Page 42 the report, there are nine areas of taxation for federal revenues. They are in the chart below:
As you can see, under “Consolidated Revenue,” the total government revenue in Fiscal Year 2012 was just over $2.5 trillion, and the vast majority of taxes come in through the individual income tax. This tax was unconstitutional until the 16th Amendment a century ago, though it was occasionally put into place for times such as the Civil War. Since that time, it has been modified and changed countless times, until we have the mess known as the modern tax code.
It is the common argument by proponents of Big Government that more taxes will solve the deficit problem. Yet in looking at the above chart, it is clear that if we spent within the Constitution we wouldn’t “need” any more money going to the federal government. Between eliminating unconstitutional programs and reforming the rest, there would be a surplus for years to come, barring a major war or other unusual circumstance.
Additionally, if proponents of more spending would like the government to receive more revenue, they have only to join Tea Party Patriots in supporting tax reform. While reformation of the code should be done to better the lives of the American people, not give more money to politicians for them to spend, eliminating loopholes and lowering rates would be a great way to accomplish both goals through economic recovery.
So there you have it. Yesterday, we showed where the money goes. Today, we looked at where it comes from. Check out the blog tomorrow for the next in our series on the Treasury Report.