The federal government set the record for the highest amount of taxes collected in the first half of the fiscal year at more than $2.1 trillion.
The government collected a whopping total of $2,121,987,000,000 from October 2021 to March 2022, breaking the $2trillion mark for the first time in history, according to the Bureau of the Fiscal Service. In 2021, the Treasury collected $1,8trillion in taxes, during the same period.
In total, roughly $1.1trillion in individual income tax, $697.7billion in social insurance and retirement taxes, $127.2billion in corporation income, $48.5billion in customs duties, $38.7billion in excise, $14.2billion in estate and gift taxes, and $70.9billion in ‘miscellaneous receipts.’
Despite collecting a record number, the government still ran into a $668.2billion deficit after spending $2.7trillion.
The Treasury has reached a new high in the first half of the 2022 fiscal year at $2.1trillion, the first time it has reached the $2trillion mark in the first six months
Despite collecting a record number, the government still ran into a $668.2billion deficit after spending $2.7trillion
The government actually spent more during the first half of the 2021 fiscal year, coming in at $3.7trillion. A portion of the money could come from the various stimulus checks given out to Americans to help offset the cost of the pandemic and the high rate of unemployment.
The Department of Health spent $793.8billion between October and March. The Social Security Administration $622.9billion and the Department of Defense came in third at $358.3billion in the first half of the 2021 fiscal year.
Despite collecting $2.1trillion, the Treasury Department announced in September that the country’s richest avoid paying more than $150billion in taxes each year.
The top 1 percent of earners, or those who have an annual income of more than $758,000, account for 28 percent of all owed but uncollected income taxes, according to the Treasury estimates.
Natasha Sarin, the Treasury’s deputy assistant secretary for economic policy, made the claim in a blog post on Tuesday, arguing in favor of President Joe Biden’s proposals to expand the budget and enforcement powers of the IRS.
Sarin wrote that the IRS is unable to collect 15 percent of taxes that are owed, and advocated for an additional $80billion in IRS funding over a decade, as well as powers for new ‘compliance initiatives.’
The Biden administration economist claimed that these changes would generate an additional $780billion in tax revenue that would have otherwise gone uncollected over the next decade.
‘This revenue will be collected in a highly progressive way, as the tax gap is more concentrated toward the top of the income distribution,’ she wrote.
Citing academic estimates of unpaid taxes, Sarin said the difference between taxes that are owed and collected totals around $600billion annually, meaning approximately $7trillion of lost tax revenue over the next decade.
It comes as Democrats hotly debate whether and how to target the wealthiest Americans for higher taxes.
A ProPublica report in June, relying on tax filings provided by an anonymous leaker unknown to the outlet, pushed the argument for a ‘wealth tax’ advocated by some Democrats such as Senator Elizabeth Warren.
The report purported to show how some of the richest Americans, including Jeff Bezos, Elon Musk, and Warren Buffet, pay income taxes only on their cash income, arguing that there should be a way to tax the rising value of stocks before they are sold.
The majority of money was collected from individual income taxes, which came to $1.1trillion, while $70.9billion was collected from ‘miscellaneous receipts’
The report did not allege any wrongdoing on the part of the billionaires, but rather lamented that their net worth was not taxed in addition to their income.
For her part, Sarin has publicly argued against a wealth tax, saying that it would be too byzantine to assess and administer, and that it likely would not generate the tax revenue that its supporters claim.
Instead, Sarin and IRS Commissioner Charles Rettig have both advocated for cracking down on ‘tax cheats’ as a way to boost collection from the wealthiest Americans.
Rettig told Congress in June that the agency is ‘outgunned’ by increasingly sophisticated tax avoidance schemes, while years of budget cuts have left it with about 17,000 fewer revenue enforcement staff than it had a decade ago.
New sources of wealth, such as trading in cryptocurrencies, were escaping taxation, he said, as was rising foreign-sourced income and abuses of business income passed through as personal income.
He called for Congress to provide ‘consistent, timely, adequate and multiyear funding.’
President Joe Biden’s fiscal 2022 budget request would boost the IRS budget by about $1.3billion, or 10.4 percent over current levels.
Biden is reportedly planning to propose a new ‘minimum tax’ targeting billionaires, establishing a 20 percent levy on all American households worth more than $100 million.
The ‘Billionaire Minimum Income Tax’ aims to close a purported loophole that benefits the nation’s 700-odd billionaires, many of whom have most of their wealth in stock, which is not taxed until it is sold for a profit.