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Category: federal debt

Ranked: The Revenue Impact of U.S. Tax Hikes

by Aran Ali
This post is by Aran Ali from Visual Capitalist

historic tax revenue increases from tax hikes

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The Briefing

  • Tax increases backing the American Jobs and Families Plan are expected to exceed 1% of U.S. GDP
  • Only 3 tax increases in U.S. history have ever equaled or exceeded 1% of GDP
  • The infrastructure plans will require 15 years of higher taxes on corporations to fund 8 years of spending

Ranked: The Revenue Impact of U.S. Tax Bills

The United States is opening up its wallet and writing some serious checks under the Joe Biden administration. The American Jobs Plan and the American Families Plan are expected to cost a combined $3.2 trillion in total taxpayer dollars. For comparison, the federal government spent slightly more than $6.5 trillion across all of 2020.

In order to foot the bill, tax hikes will roll out for corporations and the ultra-wealthy.

A History of Tax Hikes

But how do these present tax hikes compare to those of the past?

When comparing the estimated increase in tax revenue as a percentage of GDP, the Biden tax hikes fall on par with the Revenue Act of 1951 under Harry (Read more...)

The State of Household Debt in America

by Aran Ali
This post is by Aran Ali from Visual Capitalist

The growing household debt in America

The Briefing

  • U.S. household debt stands at $14.56 trillion, and has doubled since 2003
  • Student loan debt has expanded a colossal 550% in the same time frame

The State of Household Debt in America

American households are becoming increasingly indebted.

In 2003, total household debt was $7.23 trillion, but that figure has recently doubled to $14.56 trillion in 2020. With just under 130 million households in the country, this equates to an average of $118,000 of debt per household.

Here’s how the various forms of U.S. household debt compare.

Type of Debt2003 (in trillions)2020 (in trillions)% Growth
Mortgage$4.94$10.04+103%
Home Equity Revolving$0.24$0.35+45%
Auto Loan$0.64$1.37+137%
Credit Card$0.69$0.82+18%
Student Loan$0.24$1.56+550%
Other$0.48$0.42-12%
Total$7.23$14.46100%

Mortgages: Steep Price to Pay for Home Ownership

Making up roughly 70% of all household debt, and growing $5.1 trillion since 2003, mortgage debt now stands at $10.04 trillion.

A fundamental driver of mortgage activity is interest rates. Given the two variables tend to have an inverse relationship with one another, interest rates have a big impact on the affordability of housing. As long as U.S. interest rates remain near 200-year lows, its likely mortgages will maintain at elevated levels.

Students Continue Struggling with Student Debt

The second-largest form of debt is student loans. Although not quite the size of mortgages in raw dollars, student debt is the fastest growing as a percentage, having (Read more...)