President Joe Biden wants to triple down—if not quadruple down—on Washington’s borrowing-and-spending spree. How much is that going to cost taxpayers? Maybe more than you think.
The National Debt Clock, which tracks real-time federal debt, says current federal debt stands at $28.4 trillion. That works out to about $85,300 per citizen, according to the Clock. (Actually, those aren’t all “citizens,” but people in the United States.)
The U.S. Bureau of Labor Statistics says the current weekly median income is $984—or a little over $50,000 a year. That means current federal debt is about 72 percent more than the median income worker earns in a year.
But not everyone of the 333 million people in the U.S pays income taxes, though they might pay other taxes, including payroll taxes and state sales taxes. For example, some spouses aren’t in the paid workforce, many people are retired and on low fixed incomes, and most children don’t fill out income tax forms. The Debt Clock pegs the number of federal income taxpayers—as opposed to citizens—at 125.5 million.
If we divide the current federal debt of $28.4 trillion by 125.5 million taxpaying households, we get $226,000 per household.
But wait, that’s not exactly the right number either—because households don’t share the income tax burden equally.
For several years the Tax Foundation has tracked tax returns and regularly reports that the bottom half of income earners pay about 3 percent of all federal income taxes, while the top 50 percent pay about 97 percent.
So, if we take half of the 125.5 million income tax-paying households, about 63 million, and assume they will pay 97 percent of that $28.4 trillion federal debt, that turns out to be about $436,000 for each household in the top 50 percent of income.
The bottom 50 percent of tax-paying households will cover only 3 percent of that $28.4 trillion, or about $850 billion. That’s about $13,500 per household.
Of course, these are just illustrative estimates. But they are meant to reinforce a few important facts.
- The federal debt is extremely large and growing quickly.
- That debt will have to be paid by someone.
- Higher-income households, not “all citizens,” are responsible for almost all federal income tax revenue, and they are the ones who will bear this massive debt burden—a burden that is much larger than most people think, and will likely get even larger very soon.