I’ve seen the bit, excerpted below, in a couple of places on the internet now. This gist is that there’s not enough money out there to tax to cover expenses, or more specifcially, taxing the rich won’t balance the budget–the implication being, don’t raise taxes ('cause it won’t work). Now, I can see a lot of potential problems with this analysis (like, why just the Fortune 500? That’s a fraction of US business). My guess is that it’s a gimmick (that’s not to say budget cuts are not in order, just that the author is poormouthing a little). Can one of you direct me to a good rebutal out there somewhere? If not, would someone like to take a stab at it?
Your quote doesn’t explicitly say this, but it seems to strongly imply that cuts in spending are needed no matter what. That is… “raise taxes on the rich and continue spending” I think is meant to say continue spending without any cuts.
And it’s true, but the fact is everyone is talking about making cuts, too, so it’s really a strawman argument. The debate is about what the proper mix is, not about fixing the problem solely by raising taxes.
The author of the screed seems to assume the government collects taxes and then permanently “consumes” the money, as if expenditure was like burning firewood or something.
The Fortune 500 collectively made a profit of $825 billion last year (which was admittedly a record), and the total net worth of the Forbes 400 is $1.7 trillion.
The main reason why only tax increases on the very wealthy are talked about more than on the upper middle class is because they’re more politically feasible. No one is pretending that we can eliminate the deficit just by taxing the upper class.
The GOP do this, too, by implying that we need to raise taxes on only the lower half of the country, which also wouldn’t do much to lower the deficit (especially when balanced agaisnt a tax cut for the rich.)
Unless I’m missing something and Obama said that we could balance the budget by raising taxes on only the rich. He knows we can’t. We need a combination of broad based tax increases and spending cuts. Every politician knows this. (I did originally say “everyone knows this”, except some ignorant non-politicians out there might still sincerely believe that lowering taxes increases revenue. Actual politicians have read the report that the GOP ordered supressed that explicitly said that this doesn’t work.)
Also, the issue is paying down the debt is a responsible way, not paying off the debt is 3 months or one year. Most calculations are looking at changes over 10+ years.
You know, you just have to look into tax rates in other western democracies to realize that something doesn’t add up. It’s nice to imagine trickle-down economics works, but it doesn’t. Business taxes need to be competitive, or why would companies stick around or even take root, but increasing taxes on people who can obviously afford the increase, as part of the plan to balance the budget is common sense.
Are some Americans so daft that they can’t imagine that increasing revenues and cutting spending is necessary at this point? Taxing the poor is a shitty idea, but a reasonable national sales tax would probably work. For decades you’ve sneered about tax rates and energy costs in other countries. As Journey puts it, “Wonder Who’s Crying Now.”
And more importantly taxing the rich has one of the least anti-stimulative effect of all taxes. Higher estate taxes are the only tax increases that have a lower anti-stimulative effect (there is evidence that it actually has a stimulative effect).
The problem with tax competition between industrialized jurisdictions is that it quickly becomes a race to the bottom, one that noone wins over the long run.
