Just how high would taxes need to go?

To reiterate, higher taxes are not the answer to deficit problem (via the Tax Foundation):

So for fun, we’ve been putting pencil to back of envelope to see how else lawmakers could raise revenues to erase the deficit using tax increases alone. The results (and these are very much back of the envelope) are truly frightening.

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);

or,

• Take 130% of the taxable profits earned by U.S. companies this year (that’s what you call net operating losses);

or,

• 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.

or,

• 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.

James Pethokoukis