Paying for the Green New Deal

The post The Costs of the Green New Deal pulled together some of the costs of the Green New Deal. These costs included free education, free health care, and a guaranteed jobs program. These costs resulted in the need for tax increases based on 2016 tax figures from $14,453 per tax return to $56,390 per tax return. This would increase the amount of money collected by the federal government in income taxes from $1.446 trillion to around $5.563 trillion dollars.

The theory put forward by the socialists proposing the Green New Deal for paying this additional tax is to simply tax the rich more. Rather than get into making assumptions about tax rates and the number of people filing jointly or as a single person, I'm going to take the route of capping the potential income anyone can make. When they pass the threshold, the government takes all their extra income over a set amount. From the IRS worksheet I find the number of people making above a certain range and the average income in that range, subtract the limit and the rest is taxes.

For instance, in 2016 there were 16,087 returns showing an income over $10 million dollars. The average income for those in that range was $29,966,272. I'm starting by setting the maximum income anyone can make to be $1,000,000. After all, who couldn't live on a million dollars a year? So, I am taking the extra $28,966,272 from each of the 16,087 returns filed and using that money to pay for the Green New Deal. When I do this for this tax range I get $0.465 trillion dollars of the tax money I need. This estimate is actually too high since I am ignoring the taxes already paid on everything over $1 million in income. In 2016, any income over $1 million was taxed at a rate of 39.5% which is already included in the $1.446 trillion of current income tax paid to the government.

Going through this exercise for everyone making over $1 million in 2016 I and able to obtain $0.935 trillion dollars. Adding that to the original $1.446 trillion I have hardly makes a dent getting me to the $5.563 trillion I need to fund the Green New Deal. That's OK. How about if we limit what people can make in income to $500,000?

Going through the same exercise as above but limiting the income that can be made in any one year to $500,000 I am able to get $1.301 trillion. Now we are really getting somewhere, we only need another $3 trillion or so and those rich people will pay for everything.

I keep working on how to pay this by limiting the income that can be made, taking all that money those rich people don't deserve.

Maximum Income	Taxes Obtained	Total Tax Receipts
$200,000	$2.168 trillion	$3.614 trillion
$100,000	$3.524 trillion	$4.970 trillion
$75,000	$4.321 trillion	$5.767 trillion

OK, we got it. Remember these numbers ignore the amount of taxes already paid on income over our limits so they are low. Actually we would probably have to confiscate all income made over $50,000 to get the money we need to pay for the Green New Deal. So no one in the U.S. can make over $50k a year no matter how hard we work, how smart we are, how talented we are (for movie stars or professional athletes), or even how lucky we are (think of those lucky souls that win a huge lottery). The average income in 2016 was $68,049 for all taxpayers and $71,767 for everyone that paid taxes. Now everyone will be below the 2016 average. That will certainly help take care of the income inequality in the country.

Another way to get the money is simply to quadruple the tax burden of everyone that paid taxes in 2016. Remember this graph from the post It's Tax Season Again:

If we quadruple the taxes for everyone paying taxes those that make over $1 million a year would be paying around 120% of there salary in taxes. At the same time those with lower incomes would be paying 40% in taxes. That won't work.

My belief is those politicians advocating these changes never intend to put them in place. We'll never see these changes because it's just not financially sound. Total incomes in this country are just over $10 trillion dollars, to take $5.6 trillion or so in taxes would be horrible for this country. These politicians are simply using the recommendation of these changes to get votes. In other words, they are lying to us hoping there are enough uninformed people that will see this as a reason to vote them so they can be elected.