As I said below, however, federal income tax accounts for "only" around $1.1 trillion a year, so the taxes paid by the upper 3% would "only" be around $550 billion a year. To solve the $1.6 trillion deficit by raising taxes only on "the rich" who make over $250,000 a year, you'd thus have to quadruple their taxes. Do you think that would make them change their behavior? All those doctors and lawyers and business owners... do you think they might change their decisions? Do you think that might have an impact on economic activity, on hiring, on investment? Huh? Do you think? Again, an economy is not a static system... it's composed of actors who will act rationally and will change decisions based on incentives and disincentives.
And, even more importantly, Miss Liberall, do you really think that's fair? If those 3% are already paying half of the federal income tax burden, do you think it's fair to ask them to quadruple what they pay? At that rate, they'd be paying around 80% of the federal tax burden (about $2.2 trillion out of $2.75 trillion), rather than 50% ($550 billion out of $1.1 trillion).
We can't tax our way out of our deficit, no matter how many times we invoke the evil "rich white men." The only way we can do it is to cut our spending, and do it soon.
Ace of Spades makes much the same point I've been making here, and does so with the added bonus of beating up on Paul Krugman, one of the most despicable liberal pundits out there:
Okay, so, hypothetically, the "Bush Tax Cuts" are now ended. Poof. That brings the yearly deficit from $1.65 trillion all the way down to... $1.468.5 trillion per year.
And what next, Krugman? You violently oppose any reduction in spending so you must have in mind either:
1) The simple collapse of government and the economy, or
2) Generating more revenue from somewhere else.
Where else, Mr. Krugman? Where are you imagining you can get ten times the $181.5 billion per year you just heroically "saved" us?
And what next?