Today is Tax Day.
Actually, every day is tax day, with a portion of our paycheck going toward income tax or gas tax or sales tax or other myriad methods used to raise money for services that help develop a civilized society. But today is the day when federal income taxes for 2018 are due.
The federal budget for Fiscal Year 2019, which runs through the end of September, is about $4.4 trillion — a little more than $13,000 per resident. Roughly half of that budget goes toward either Social Security or Medicare, Medicaid and other health care expenditures.
The largest chunk of discretionary spending is for defense, which is about 15 percent of the federal budget — $686 billion for this fiscal year. According to the International Institute for Strategic Studies, the United States spends more on the military than the 10 next biggest-spending nations combined.
This year, the federal government expects to receive about $3.5 trillion in revenue, and you might notice a problem with that. With expenditures exceeding revenue, the deficit is projected to be $897 billion — an unusual situation during a time of economic growth. The national debt has reached more than $22 trillion, with $16.6 trillion of that debt being held by the public, according to the nonpartisan Congressional Budget Office. That means that by the end of the fiscal year, each American will be holding more than $50,000 in debt accrued by the federal government.
The debt has been exacerbated by the Republican tax cuts promoted by President Trump and passed by a Republican-led Congress late in 2017. Years ago, when Barack Obama was in the White House, Rep. Jaime Herrera Beutler, R-Battle Ground, explained the danger of runaway deficits: “If Congress doesn’t stop the overspending, America will cease to be the ‘land of opportunity’ we all know … our current national debt is crippling businesses, hurting families and stifling the growth of new jobs.” But with Trump in office, Herrera Beutler supported both the 2017 tax cuts and a sharp increase in spending.
Interest payments on the federal debt are expected to be about $390 billion this year, roughly 50 percent more than in 2017. That interest is expected to outpace even defense spending within a decade. As The New York Times explained last year: “The deficit is soaring now as the economy booms. … The risk is that the government would have less room to maneuver if the economy slows.”
All of that might be a bit wonkish, but it is instructive to consider where your taxes go as Tax Day arrives. It also is instructive to consider whether recent policies have benefited the average taxpayer.
According to the nonpartisan Tax Policy Center, the top 1 percent of earners received 20.5 percent of the tax cuts that are in effect for this year’s filings. And the Internal Revenue Service has one-third fewer auditors than it did eight years ago, even though studies show that the U.S. Treasury reaps $4 for every $1 spent on trying to catch tax cheats. Meanwhile, President Trump refuses to release his tax returns, as has been the norm for presidents for nearly five decades.
Yes, with taxes being due today, we have taxes on our minds. But perhaps we have targeted the wrong milestone. According to The Tax Foundation, Tax Freedom Day for the typical Washington worker won’t arrive until Saturday. That is the day that we will have worked enough to pay all federal and state taxes for 2019.
So at least we have something to look forward to.
