Treasury Secretary Timothy Geithner says, “There’s just no reason why 98 percent of Americans have to see their taxes go up because some members of Congress on the Republican side want to block tax rate increases for 2 percent of the wealthiest Americans” (“Geithner and GOP dig in on tax rates,” Page A1, Dec. 3). This avoids addressing the real problem — the massive overspending by government.
You and I cannot go over our budget without putting ourselves into bankruptcy. The US government spends 40 percent more that it receives in revenues. Why are we not demanding a balanced budget with a reduction in the debt? Why are we not balancing the budget by increasing everyone’s taxes in a graduated way so that everyone finally sees what is happening? Then why not reduce government expenditures by an amount sufficient to be in balance with annual income?
Comments
The common meme is that "taxing the 2%" will solve the budget crisis is simply false. If tax rates were raised across the board, as the cliff has ensured, the drop in economic output would likely result in LESS tax revenue than we are recieving today. Raising it only on the wealthy would create nothing more than a rounding error in revenue, but across the board tax hikes would deliver us to recession.
The only solution is to lower the amount of spending, and encourage economic growth to increase tax revenue. Tweaking tax rates is a parlor game, and will not solve the problem.
Maybe this approach is just too obvious and balanced? It is the matrix for a solution with the winners being all of us, not one political party.