TaxProf Blog: Hubbard: Obama's Budget Means 11% Tax Increase on Those Earning: "Finally, the president would limit certain tax deductions for individuals with incomes over $200,000. This would net $584 billion over the next decade.
Now let's review the math. All these tax increases on upper-income taxpayers are projected to raise $148 billion per year. Viewed next to proposed additional spending of roughly $500 billion per year, or this year's federal budget deficit of $1.3 trillion, the president's budget faces an arithmetic challenge.
How big is that challenge? Maintaining the president's higher spending will require raising taxes for all Americans. Assuming the president favors raising marginal tax rates over broadening the tax base (consistent with his failure to consider the tax proposals from Bowles-Simpson), an across-the-board tax increase of 11% for taxpayers with incomes under $200,000 would be required to raise the money the president proposes to spend."
And of course there's the inevitable comment:
Ah, but he doesn't intend to raise as much revenue as he spends. He plans to continue to spend many more times as much as he takes in. Then when the bill comes due 5 or 10 years from now, he won't be POTUS any more. It won't be his problem. It will be yours and mine, and that of our children and grandchildren. He doesn't care, because he doesn't need to care.
Posted by: Robert Hanson | Apr 25, 2012 4:36:00 PM
System broken? Much?
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