The economy is a disaster, the federal government is operating at a deficit unequaled in the history of the Republic, it is essential to find a way of coping with the National Debt in order to restore economic confidence, and the democrats naturally want to raise taxes.
Scott A. Hodge looks at the options for taxing our way back to a balanced budget.
To erase this year’s estimated $1.5 trillion deficit, we would need either to:
Enact a 25% VAT (Greece is still a mess with a 19% VAT);
Take 130% of the taxable profits earned by U.S. companies this year (that’s what you call net opperating losses);
Raise the top three tax brackets (28%, 33%, and 35%) to 100%. Actually, this would still not raise enough money to erase the deficit – of course, assuming all the wealthy taxpayers didn’t flee to Switzerland.
Take 100% of the business income earned by individual taxpayers in 2008.
In other words, new taxes are not the solution to Washington’s deficit problem. That is, unless we want to wreck our economy for decades to come.