Wednesday, October 21, 2015

Rocco by Death In Vegas

"The US is now spending 26% of available tax revenue to pay interest on the $18 trillion outstanding. Total US interest payments in Fiscal Year 2013 were a whopping $415 billion, roughly 17% of total tax revenue. Here's the thing, though - it's inappropriate to look at total tax revenue when we're talking about making interest payments.

The IRS collected $2.49 trillion in taxes last year (net of refunds). But of this amount, $891 billion was from payroll tax. According to FICA and the Social Security Act of 1935, however, this amount is tied directly to funding Social Security and Medicare. It is not to be used for interest payments.

Based on this data, the amount of tax revenue that the US government had available to pay for its operations was $1.599 trillion in FY2013. This means they actually spent approximately 26% of their available tax revenue just to pay interest last year, a much higher number than 17%." — Simon Black