Correcting for 40 Years of Under Taxing and War

To be blunt a correction needs to be made for what has happened over the last 40 years.  We need to deter this cycle from occurring for the next 40 years.  The promises of increased growth to pay for these tax cuts never came true and the fortunes created as a result of these tax cuts are not just.  The debt that has incurred never went to some foreign entity we now owe our labor too; it went to the top of the income ladder.  We have yet to seriously address tax issues to the increased efforts in the middle east which have cost $6.4 trillion according to the Watson Institute for International and Public Affairs “United States Budgetary Costs   and Obligations of Post-9/11 Wars through FY2020: $6.4        Trillion.” [8]

If for example if we took $5 Trillion of the $36 Trillion in net worth of the 1%, we wouldn’t force them to sell things and crash markets.  Their most liquid assets would just go to our treasury.  Their stocks, bonds, and real estate would be assets of the treasury.  US treasury bonds would obviously just be zeroed out.  The treasury can manage the assets as it sees fit from there. 

Invoice Coming Due

  • Reagan Tax Cuts $7.1 Trillion
  • Clinton Discount $-1.9 Trillion
  • Bush Tax Cuts $2.1 Trillion
  • Middle East Wars $6.4 Trillion
  • Wall Street Bailout $0.7 Trillion
  • Trump Corporate Tax Cuts: Tab Ongoing

US Debt Clock

  • $23 Trillion in January 2020 (prior to coronavirus)
  • $187k per taxpayer?
  • …depends on how much you think the 1% owe from their $36 trillion in assets

Alternatively, if we actually collected all the taxes owed to the treasury each year and the tax gap was 0 instead of ~2-3% of GDP, the debt would be near 0… 2-3% x 40 years is 80-120% of GDP.

Better rules need to be put in place for government borrowing at federal, state and local levels since it is an obvious temptation and laws and rules are meant to combat temptations.

References

8. Neta C. Crawford, Watson Institute, Brown University. United States Budgetary Costs and Obligations of Post 9/11 Wars through FY 2020: $6.4 Trillion. November 13, 2019.