Now this I agree with. In any sort of tradeoff situation like this, you look for the best answer. To reduce the deficit by a given amount, assuming you think this is necessary, what is the least bad answer? I think it is pretty clear that increasing taxes oh the top 1% is it. It is clear that tax cuts for the rich are less effective at economic stimulus than tax cuts for the broader population, (or other stimulus measures) so it makes sense that increasing taxes (not to confiscatory levels, of course) is less harmful. I’m also not convinced that this would increase unemployment in a situation with lack of demand. The great increase in wealth at the top level has not improved prosperity, so removing some of it is unlikely to hurt prosperity.
How much would you increase it by and how much do you expect you’d get out of the ‘rich’ for your efforts? I mean, let’s say you increased it back to pre-Bush levels…I’d certainly be good doing that (I’d be good doing that for everyone, which I think would be more fair). What’s your expected increase in Federal revenue due to that increase? $10 billion? $100 billion? $200 billion? $500 billion? What’s your estimate?
-XT
Well, any way out has that problem to some degree, but raising taxes on upper-range incomes & net worths is probably the least painful way to balance the budget.
It’s easier on the economy to make some multi-millionaires pay another 10% of their income than to fire lots of civil servants, cut benefits on the rest (thus hurting the incomes of private-sector health-care workers), cut Medicare benefits (thus hurting the incomes of private-sector health-care workers even more), and cut DoD orders that prop up the Midwestern economy (the best blue-collar jobs in my hometown are in aerospace; I assume this is not unique to SW Missouri).
I’m for reforming Medicare (to a general single-payer system) & cutting DoD spending significantly, but I don’t pretend that’d be less painful to the economy than a 10% tax hike on upper incomes.
Complaining that tax hikes would hurt hiring is kind of like complaining that outpatient laser surgery will leave a scar.
The one flaw in this is your assumption that steep tax rates would hurt revenues. It’s like what Peter Orszag told Charlie Rose about Reaganomics.When you raise taxes, you gain revenues. The Laffer Curve just isn’t that steep.
About where does he say that raising taxes sharply will gain revenues? I’m not going to listen to the whole thing, which seems to be mainly about health care reform.
-XT
The question I would like to add to the OP’s question is: What can we estimate is the country’s credit score? If our money is good because the government is good, then what will happen if it goes bad?
I think the way Orszag put it was, “When you mean to raise taxes, that’s what you do.” The loss of revenue from lost productivity is smaller than the gain from higher tax rates. He was directly responding to Charlie asking about supply-side theory.
If that were true, then why doesn’t every country in the world raise their tax rates to 95% or so and then poverty, unemployment, low standards of living, etc would cease to exist on planet Earth?
I’m no student of history but I’m pretty sure there hasn’t been a single society in the history of the world that has successfully taxed itself into prosperity.
Never heard of the law of diminishing returns? Most things don’t work if you stretch them out ad absurdum; why would this be different?
Northern Europe?
For the same reason that, if cutting taxes increases government revenue, every country doesn’t just lower their tax rates to 0% so the tax revenue will rain mana-like from the heavens.
We’ll start immigrating illegally to Mexico for jobs.
We could only go bankrupt if other nations stopped giving us money and taking our money. It would be very hard to do, since as others have pointed out, the dollar sets the tone. We’d get stuck in some kind of economic dependence with other world leaders (provided they haven’t collapsed as a result of our woes).
In theory, if the whole entire world economy collapsed, we’d just go back to bartering and start over again.
The U.S. could be self-sufficient if it wanted to be (but no one is giving up their big screen T.V.s) since we have enough land, food, and water for everyone. And if the auto/oil/energy/etc. industries were forced, they’d be more efficient. 
Smitty is spot on. Interest rates will go through the ceiling. Hyperinflation will hit. A loaf of bread will be priced unbelievably. The availability of commodities will tighten
due to the inability of companies either being unable to purchase them or being withheld by foreign entities. All in all it is a disaster in the making and you can thank your gutless wonder politicians for it when it goes down. So get ready the revolution, it is coming and it will not be televised.
A Dodgy Dude: "If that were true, then why doesn’t every country in the world raise their tax rates to 95% or so and then poverty, unemployment, low standards of living, etc would cease to exist on planet Earth?
I’m no student of history but I’m pretty sure there hasn’t been a single society in the history of the world that has successfully taxed itself into prosperity. "
Are there any countries that have started a couple of big, expensive wars, then cut taxes, then sat around wondering how they got into debt and tried to blame it on the new guy?
How many of you think that if our economy collapses the banks will close for a “holiday” as they did in the Great Depression? You have $X,000 in the bank that holds your mortgage. You can’t get your money, so you can’t pay the mortgage, so the bank forecloses.
That happened in the 30’s. Think it can’t happen again? Let me sell you some sea-front property in Arizona!
Let me introduce you to the Federal Deposit Insurance Corporation.
Accounts are insured up to $250,000 per depositor per bank.
Does it work?
I’m betting 1933 was before you were born, so it’s been that way your entire life. How could you not have noticed?
The Treasury Secretary wrote a letter addressing OP.
( Featured Stories | U.S. Department of the Treasury )
Is this why the Great Depression of the 1930’s is barely mentioned by our grandparents, or in history books? 
BTW the $9.3 trillion of U.S. Treasury debt held by the public and marketable breaks down as
[ul][li] $1.5 trillion - bills (orig. maturity less than 1 year)[/li][li] $6.1 trillion - notes (orig. maturity 2-10 years)[/li][li] $1.0 trillion - bonds (orig. maturity 30 years)[/li][li] $0.7 trillion - TIPS (orig. maturity 5-30 years)[/li][/ul]