President Joe Biden released a $6.011 trillion federal budget proposal in May 2021 for fiscal year (FY) 2022. The U.S. government estimates it will receive $4.174 trillion in revenue through Sept. 30, 2022, creating a $1.837 trillion deficit for Oct. 1, 2022 – see here.
So how is the US doing collecting those taxes? According to the Monthly Treasury Statement, the federal government collected a record $2,121,987,000,000 in total taxes through the first six months of fiscal 2022 (October through March). See the trend chart below and learn more here.
This also marked the first time that federal tax collections have exceeded $2 trillion in the first half of a fiscal year. Remember, the numbers presented are for a half year, not the full year. See the following fiscal map that shows the source and outlays in the budget.
The federal government ran a deficit of $668,267,000,000. That is because the government spent $2,790,254,000,000 during the period. The spending is running about $400bn under projections, and revenue is running about $200bn better than projected. However, this assumes that spending and tax collections will be linear throughout the year, and no other budget provisions are passed by Congress.
As inflation surges, the IRS has boosted federal income tax brackets for 2022, standard deductions, 401(k) contribution limits, and more. But other provisions remain unchanged, leading to higher tax bills over time. For example, couples filing together to sell their primary home may exclude up to $500,000 of profit from capital gains taxes ($250,000 for single filers). These amounts haven’t changed since 1997, despite median home sales prices doubling over the past 20 years.
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Federal spending will increase by trillions in the future – 65% is considered mandatory. The rest is considered discretionary – a little more than 15%, of which the military is the largest. The three major budget categories – health care, social security, and interest on the debt – will account for 80% of this spending growth.
As inflation continues to steam forward, the numbers merely get bigger. Those with the privilege of obtaining credit, and certainly the US government does this well, can pay back their credit with cheaper money in the future. Governments get bigger and happier. Who are the losers?
The average citizen …
By Tom Williams at Right Wire Report
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The views and opinions expressed in this article are solely those of the author and do not necessarily represent those of The Blue State Conservative. The BSC is not responsible for, and does not verify the accuracy of, any information presented.