I really do wish that they (the powers that be) would take social security income and outgo off the budget books. In my earlier post I was talking about a $3.8 trillion budget, but 880 million of that is Social Security which is already covered by the Trust Fund and should be ignored for our calculations.
So let us use a budget figure of $2.9 Trillion
$13.1 Trillion in total personal income.
$6.1 Trillion in deductions.
$7 Trillion available income to cover the budget.
Then a 41% tax on all income over $53,000 will cover the budget.
Alternatively, looking at the 2013 budget broken out, if we take the income tax income – $1.36 Trillion ($1,359 Billion) and add the deficit – $0.9 Trillion – Then we need to cover $2.26 Trillion and the remainder to $2.9 Trillion is covered by the estate, corp, etc. taxes. Oops, they are including $959 Billion of SSA trust income which is $76 Billion greater than the SSA outgo and we want to keep the SSA out of the calculation so lets add the $.076 Trillion to our total and we need to cover $2.34 Trillion to meet the budget.
So a 33% tax on all personal income over $53,000 should be able to meet the 2013 budget.
I am using high level swags here. The $6.1 Trillion in deductions is really a worst case where everyone in the low median half is counted with a $53K income. A more realistic total deduction is probably less than $5 Trillion since the total income of the lower median group is less than $2 Trillion and the total deduction would be the $3.1 Trillion from the higher median group and the actual total income of the lower median group.
My google-fu is weak. I am trying to find out what percentage of the total annual personal income is for the folks in the lower median group, and I can’t find an exact number. It appears to be in the 20-25% range, or lower. I saw one graph that might have been 15%. So if the Total income is $13.1 Trillion the Lower Median total income is somewhere in the $2 Trillion-$3 Trillion range