Necessary but Not Sufficient: Why Taxing the Wealthy Can’t Fix the Deficit

NOW OR NEVER | SEPTEMBER 2012

By David Brown, Gabe Horwitz, and David Kendall

In this paper we shatter the myth that taxes on the wealthy can come close to solving our long-term budget problem. We readily acknowledge that raising taxes on top earners is necessary, but it is not sufficient to solve the looming fiscal crisis. And we make clear that if entitlements are left on autopilot, burdensome middle class tax hikes become inevitable.

Even a 50% tax rate on the wealthy can’t fix the deficit.
This is the first in a pair of papers that demonstrate that purely ideological fixes will not sufficiently address our fiscal issues. Our other report, Death by a Thousand Cuts: Why Spending Cuts Alone Won’t Fix the Deficit, proves that a cuts-only strategy cannot solve our budget woes without severely compromising our safety, security, and economic growth. Together, these papers make the case that a big and balanced fiscal package is the preferred way to avoid the fiscal cliff, prevent deficits from exploding in the future, and allow our economy to grow.

To stabilize the debt and create a positive economic climate for U.S. growth, most mainstream economists agree that annual deficits must be reduced to 3% of GDP. The question is: how do we get there?

In order to demonstrate that taxes alone cannot solve our budget woes, we explore three budget scenarios, all of which rely solely on

Guess what? Mitt Romney STILL pays a lower tax rate than you… you 47% slob.

You sleazebag, free-loading, dirtbag, entitlement-minded, mamby-pamby, wussified, two-bit, grifter…

No, not you, dear reader.

Mitt Romney.
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Romney paid $1.9 million in 2011 taxes

Washington Post

Published 11:13 p.m., Friday, September 21, 2012, By Philip Rucker, Jia Lynn Yang and Steven Mufson

Mitt Romney paid $1.9 million in taxes on $13.69 million in income in 2011, most of it from his investments, for an effective rate of 14.1 percent, according to hundreds of pages he released Friday in a move to quiet political controversy over his personal finances.

Wall Street Crap Shoot – h (Photo credit: SouthernBreeze)

The Republican presidential nominee could have paid less in taxes, but he engineered his 2011 returns to

Mitt & Wealthy Republicans out of touch with Average Americans?

Mitt?

Hello?

Mitt?

Earth to Mitt.

Come in, Mitt.

You’re out of touch, Mitt.

From George Romney To Mitt, A Shrinking Tax Rate

by Scott Horsley and Tamara Keith
– February 24, 2012Mitt Romney gave a major economic speech Friday, in which he stressed his plan to lower personal income taxes.

Romney’s own taxes became an issue last month, when he acknowledged paying a lower tax rate than many middle-class families.

Warren Buffet tells Congress, “Stop coddling the Super-Rich.”

Op-Ed Contributor

Stop Coddling the Super-Rich

By WARREN E. BUFFETT

Published: August 14, 2011

Omaha

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was