Let's Tax the Rich

According to the Brookings Tax Policy center in 2011 the Top 20% Wage Group paid 76% of all Individual Income Tax.  In 2011 the Government collected 1.1 Trillion in Individual Income Tax so 836 Billion of that number came from the Top 20% Wage Group.

Let's say we raise taxes on the Top 20% Wage Group by 5% in 2013.  Based on 2011 numbers that would increase Government Revenue by roughly 55 Billion.

As I mentioned in a previous post the CBO Projects Government Spending in 2013 at 3.5 Trillion with a forecast Deficit of 640 Billion.  Now if we reduce Government Spending by 10% that leaves a savings of 350 Billion.  Meanwhile if we add in the extra 55 Billion from Taxing the Top 20% Wage Group we have now decreased the Deficit by 405 Billion so we still have another 235 Billion to go.  Based on Consumer Spending in 2011 which was 11 Trillion for Goods and Services, if we implement just a 2.1% National Sales Tax, that would generate an additional 231 Billion in Government Revenue which would basically bring the forecast Deficit to Zero and lead to a Balanced Budget.

So there you have a balanced approach in "3" Easy Steps which allows every single American to have a part in reducing the Deficit for 2013.

1.  Decrease Government Spending by 10%
2.  Increase Taxes on the Top 20% Wage Group by 5%.
3.  Implement a National Sales Tax of 2.1%

Once again I have presented another rather easy approach Congress could implement to Balance the Budget in 2013.