Too few billionaires to tax
Last week the government reported that it now spends $4 billion a day -- $1.4 trillion over the course of a year -- more than it takes in from taxes, tariffs, fines and fees.
In 223 years, the United States has amassed more than $16 trillion in debt. The potential impacts of this red ink on farmers and ranchers could be devastating.
As the government finds it harder to finance its debt, farmers will find it more expensive to borrow the money they need to plant their crops or expand their businesses. Rising inflation will increase the cost of inputs -- fuel, feed, chemicals, etc.
Both presidential campaigns recognize the mounting debt, now more than $16 trillion, is a threat to the country's future security and economic vitality. Each candidate has his own idea of a "balanced" approach to dealing with the problem, which suggests some equal amount of cuts and revenue increases.
Each proposes reducing expenditures, although their spending priorities are vastly different. One candidate wants to reduce tax rates, stimulating the economy to produce more income to tax. The other candidate wants to tax rich people "just a little bit more" to help cover the gap.
At first blush, that seems to make sense. The rich should pay more taxes because, well, they're rich and they have the money. But in reality, they don't have anywhere near the money to cover ongoing deficits, let alone pay off accumulated debt.
If beginning today they were taxed at 100 percent of their net worth, the Forbes top 10 richest Americans could cover the daily spending deficit for a little more than 80 days.
Bill Gates' fortune is worth $66 billion. If it were liquidated and turned over to the treasury to cover the deficit, the government would burn through the money by Nov. 17. Warren Buffet, who also thinks rich people should pay more taxes, has $46 billion. His money would be gone by the end of November.
Software magnet Larry Ellison's $41 billion could cover the deficit tab through Dec. 10. Charles and David Koch, sibling industrialists and conservative activists, have a combined $62 billion that would take us through Christmas.
Moving down the list, Christy, Jim, Alice and S. Robson Walton have a Wal-mart fortune worth a combined $106.9 billion that would keep the government in the black until Jan. 15.
And finally, New York Mayor Michael Bloomberg made $25 billion from his financial media and information empire. From where the Waltons leave off, Bloomberg could keep the country's books balanced through Inauguration Day, Jan. 21.
To continue having only rich people cover the deficit, the newly inaugurated president would have to drill down farther into the list. Alas, the combined net worth of the 390 next richest people on the Forbes 400 list -- $1.4 trillion -- would only last another year at current spending rates. Then it would be gone, never to be taxed again.
No realistic tax increase scheme will raise enough money to stem the red ink. It would take a tax increase of 200 percent on everyone making $75,000 or more to cover the annual deficits.
Whether taxes are raised, or revenues increase because the economy improves, the only thing that will decrease the deficit is a significant cut in spending.