We hear, “You are going to get $1,400” in stimulus money, and we wonder why it is taking so long to bet this thing passed. But, like anything, there really is no free lunch. I did some poking around and, amazingly, good, bipartisan information is almost impossible to find.
What is easy to find is information about is who pays what taxes. We know that there are about 331 million people in the United States. According to the IRS, there are about 143.3 million taxpayers (2017 is the latest data). The top 50% of taxpayers by household income pay 97% of all federal income taxes. The bottom 50% pay 3%. The income split point between the top and bottom 50% is $41,740. The average tax rate for those over this amount is 16% and the average tax rate for those under is 4%. Contrary to popular belief, the top 1%, those who make over $515,371, have an average federal tax rate of 26.8%, almost 7 times higher than those earning less than $41,740. I have no problem with these numbers; those who have much are taking care of those who have less. The stimulus package phases out payments to individual making over $75,000 and two-income households making over $150,000. Again, I have no problem with this.
The current stimulus package as presented to the senate comes at a cost of $1.9 trillion. My first discovery was that my little desktop calculator is not able to count up to a trillion; it’s two zeros short. Google to the rescue; $1.9 trillion divided by 331 million taxpayers comes to $13,258.90 per taxpayer. About 84% of taxpayers will see a stimulus payment, and the cost for this is 422 billion dollars. That leaves about one trillion four hundred seventy-eight billion dollars to be accounted for.
People are still hurting, and I am not opposed to giving those in need a boost as we feel our way out of this pandemic. But I am greatly concerned with the details of this humongous borrow we are making. Again, details are hard to find, but there is a piece of this legislation that earmarks 570 million dollars to federal workers. Up to $1,400 per week for 15 weeks is available to them if their children are not attending school in person. Annualized it comes to $72,800 per federal worker. I understand that it is a hardship on those who need to work and have school-aged children who need to be at home. By why single out federal employees?
Other reports claim exorbitant amount to museums. There are huge amounts going to specific states.
Our government was formed over 233 years ago with the signing of the Constitution, establishing our federal democratic republic. We have an indivisible union of 50 sovereign states, functioning as a democracy because we govern ourselves. It is representative because we choose elected officials by free and secret ballot. Through our elected officials we decide how much power to delegate to our government, what taxes we pay, and where these funds are used.
Financial experts predict that it will take many decades for our country to repay this debt, and that is if our economy grows. There are only two ways we can repay this – raise taxes or cut spending. Given our current government I don’t believe cutting spending is an option. Either way, this is a debt that our grandchildren will be faced with. I don’t know about you, but in my house, we think long and hard before we borrow over thirteen thousand dollars.