· Revenue: $2.17T
· Spending: $3.82T
· Debt: $14.56T
Assuming all else remains unchanged, we’d have to cut federal spending by $2.14T – that’s 56% – to eliminate the debt in 30 years.
What’s that? “Increase taxes on the rich!” I hear, over and over?
... if individuals earning more than $200,000 were taxed at a 100 percent marginal rate–and we confiscated their passports so they could not flee–the take would come to $1.27 trillion, or just 77 percent of this year’s deficit.
- Arthur C. Brooks, president of the American Enterprise Institute
Ok, for sake of argument, raise taxes on the “rich” to 100%. Kicking ballpark numbers around, that leaves $0.41T in cuts – real cuts, not “rate of increase cuts” – in spending just to stop the deficit hemorrhaging. We need another $0.49T in cuts – real cuts – to pay off the debt in a very generous 30 years.
So, ball back to the Democrats' court: going whole-hog 100% “tax the rich” nets about $1.27T, and the deficit is still out of control. What $0.90T in spending cuts is the Left willing to offer? This amounts to the minimum amount of spending cuts we need to make now just to clean up this mess over the next generation.
Sure, it’s more complicated than that – but that’s the core framework to operate from. If we tax “the rich” (loosely defined) to the point of running out of other people’s money, we see the minimum steps required just to start moving in the right direction.
One alternative to cutting spending is, of course, to increase revenue. But how? Consider:
As a result of reducing taxes on the rich, the rich got much richer — so much so that they wound up paying nearly four times as much total tax (and nearly three times as much tax per rich person) as when taxes were higher.
“It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now … Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”
– John F. Kennedy, Nov. 20, 1962
1 - note that spending, in most cases, increases faster than revenue. Therein lies the core problem: political unwillingness to spend less than revenue.
2 - ignoring the agreed fact that increasing taxes on the rich slows the economy, and going to 100% would drive subsequent revenues to $0. This is reducto ad absurdum exercise in identifying how far each side is willing/capable to go.
3 - that’s real cuts, not “reductions in increase”. That’s next year and ongoing from that, not “over 10 years”.
4 - “this mess” is here, and continual pointing fingers years into the past at debatable causes doesn’t clean it up now.