A Taxing
Week
By Hank
Silverberg
A few years
back while doing a story on the financial stability of a local hospital, I was
reading through the facility's annual report. It kept referring to “negative patient outcome,” and it took me a few
minutes to realize they were talking about the death rate among patients. Over the
years, while covering numerous county boards and city councils, I often heard politicians talk about the need for more “revenue enhancements,” and it was
clear that "revenue enhancements" was a code word for taxes.
So, I begin this week’s blog with an old
saying slightly modified. There is nothing certain in life except negative
patient outcome and revenue enhancements.
It’s been a
taxing week. I had to write a fairly large check to the U.S. Treasury to meet
the April 15th income tax deadline, and like millions of Americans, I
am not happy about it. Don’t get me
wrong. I fully believe that each citizen should pay their fair share of taxes
to do what the U.S. Constitution says the federal government should do:
“provide for the common defense, [and] promote the general welfare” of the people. I’m
just not sure the leadership in Washington has been doing that.
Let’s take a
closer look. Here’s a pie chart of
federal spending for fiscal year 2018.
Social
Security, the INSURANCE that every American worker pays into, is the largest
portion of the budget at 24%. We paid for it. It is ours. Congress is not
supposed to touch it. It is somewhat ironic that Congress, in its infinite wisdom, decided that we were going to be taxed on money we set aside, in the government’s
care, for our retirement. But we pay it. The issue over the last decade has
been our lawmakers continued violation of the rules which say the Social
Security Trust Fund can not be used to pay for other things. They have raided
it numerous times and moved money elsewhere, destabilizing the fund and money promised to every working
American when they retire. They have also gradually moved the retirement age up from 65. For me it's 66. For those just a few years younger its 67.
Medicare
also takes up a substantial portion of the federal budget—14% in fiscal 2018.
Again, that is medical insurance for our old age which we have ALL paid for
with a guarantee that it would be there for us when we reach 65. The much-maligned
Obamacare amounts to just 1% of the federal budget.
I won’t
break it down in detail. You can see the chart. But the key category of “non-defense,
discretionary,” about 16% of the overall budget, is where all the debate comes
in.
I paid my taxes this year just a few days
after the latest report on our decrepit roads and bridges came out. Seventy thousand
bridges across the country are considered structurally deficient. Our airports
are outdated and our roads are falling apart.
The best example would be the
Baltimore-Washington Parkway, technically maintained by the National Park
Service.
The road is
in deplorable shape because the NPS has no money to fix it. The speed limit has been lowered to 40 in some places for safety reasons and emergency pothole repair has slowed traffic even more.
The story is
similar on many interstate highways and bridges all across the country where
state and local governments have been unable to fill in the funding shortfalls.
The federal government allocated $19.3 billion for ALL transportation in 2018.
President Trump has proposed cutting that by 3.4 billion. Some states are now looking at more tolls (revenue enhancements) to make up the difference
Defense
spending, in our 18th year of the “War on Terror” remains high at $606 billion, and there’s a proposal from the
current administration to raise it another $80 billion for 2020. It can be argued
it is necessary for our security. But a few billion dollars of that allocation
is being moved over to build an unnecessary wall on the border with Mexico. I’d
rather see that military construction money used to fix the unhealthy conditions of military housing for active duty troops and their families or diverted to better health care for veterans.
 |
| (Mold on walls on military housing. Courtesy of stripes.com) |
In order to spend money, the federal
government must collect it. According to
the Center on Budget and Policy Priorities, almost 48% of that revenue comes from individual
taxpayers, 35% comes from payroll taxes and goes right into the Social
Security Trust Fund, and 8% comes from
other taxes like real estate taxes, or sales tax on things like fuel, alcohol
and tobacco.
About 9% comes from corporate income taxes. Those are the same corporations that the Supreme Court has ruled in the infamous "Citizens United" case should be treated like people when it comes to campaign contributions. But they don't pay the same tax rate as the rest of the "people."
In 2017 taxes raised $3.3 trillion. But the government spent $4 trillion and
borrowed $665 billion dollars to make up the difference. If you look at the pie chart you will see that last year 8% of the budget was used just to pay interest on the national debt.
Seventy-five
percent of all individual taxpayers received a refund last year. The figure will be
slightly lower this year and so will the refunds, all attributed to the tax cut
approved by Congress. Less was taken out, so refunds will be smaller. For some, tax day payments to the government will be bigger for the same reason--less was taken out.
So, what’s
the bottom line? For me it’s not my tax bill that matters right now, or the
lack of a refund. It’s what our government is doing with the money.
Congress has
not passed a comprehensive transportation bill in three decades. It has
consistently raided the Social Security Trust Fund that is supposed to be
dedicated only to retirement checks. And the current administration wants to cut
even more from agencies like the EPA and Education Department. Something is wrong here and there is not a politician out there who has a plan to fix it.
I think about that every time I roll over a pothole while crossing a rusted
bridge over a dirty river, or check the deductions from my
paycheck. That’s something to focus on when you write a check to the IRS or
deposit your smaller refund.
(Your
comments or Suggestions are welcome)
(Signed
Copies of my book “The Campaign” can be obtained by at a reduced price by
emailing me at HankSilverberg@gmail.com for instructions. They can also be
ordered at Amazon.com, BN.com or hanksilverberg.books.com)
.JPG)
nothing about the military
ReplyDeleteto speak of.... very brief. and what about foreign aid? hint hint
ReplyDeleteI am not clear what either of you are talking about. You need to be more specific.
ReplyDeleteHello
ReplyDeleteI would add that the extraordinarily high cost of every aspect of medical care in this country results in 24% of the federal outlay going to that sector. In fact, it's more than 24% because spending on veterans (not specified here) includes spending on their healthcare. This is in addition to the money paid by state governments for health care and the money all of us pay for medical insurance, insurance deductibles, co-pays, etc.
Medical care gobbles up almost 20% of U.S. GDP, compared with the EU average of 9%. US GDP per capita in 2019 was $65,000+. 19% of that is $12,350. 9% of $65,000 is $5,850. So imagine the savings if medical costs here were comparable to those in Europe. It works out to more than $6,000 per person per year!!
Hello Anonymous. I would like to know who you are. Your comments were very good. And I am surprised you are just now commenting on something I wrote over a year ago. Keeping reading my blogs. I like to hear from my readers.
ReplyDeleteHS