Analysis: The US balance sheet is out of whack
May 17, 2021 at 18:55
Most of the $3.5 trillion the government brings in -- about $1.9 trillion -- is from you and people like you, in the form of income tax paid by taxpayers, estates and trusts.
That's according to the annual IRS data book, most recently published for the 2019 tax year , when the IRS processed about 253 million tax returns.
Paired with tax cuts enacted by Republicans under former President Donald Trump , the US balance sheet, what it brings in versus what it spends, looks incredibly out of whack.
Experts who analyzed his proposals say it will add to short-term deficits, but even out in the long run.
The difficulty would be enacting the easy part of his proposals (spending) at the same time as the hard part (tax hikes).
Biden wants to offset infrastructure spending with tax hikes on corporations and the wealthy, promising the proposals will help deal with the country's inequality.
It needs to get more competitive with China and other countries that use government funds to invest in industries and technological advancements.
Raising taxes will be difficult, but focusing them on the wealthy and corporations has the support of the American public, according to recent polls.
Both parties like spending moneyRepublicans share much of the responsibility for the state of the country's finances.
They pushed through tax cuts on a party-line basis under Trump and did not find spending cuts to offset the plateauing revenue.
The amount of income tax paid by businesses has dropped substantially since that law went into effect.
About half of Americans -- 49% in a recent Gallup poll -- said they worry "a great deal" about federal spending and the budget deficit.