Cliff higher than reported
President Barack Obama says the rich aren’t paying their fair share of taxes. Here’s what the government isn’t saying: Current tax revenue is the same as pre-crash 2007. We have a spending problem, not a revenue problem. Eliminating the federal budget deficit – $1.3 trillion – we would still outspend tax revenue by $500 billion. More taxes on the wealthy have little deficit impact. Our $16 trillion debt will grow larger.
But wait, there’s more: The feds don’t follow accounting rules about disclosing liabilities. Experts who served on President Bill Clinton’s tax and entitlement reform commission calculate $63.3 trillion in Medicare and Social Security obligations, so the real debt is $87 trillion. To service $87 trillion, tax revenue must increase from $2.3 trillion to more than $8 trillion.
How hard is that? If taxes took 100 percent from people earning over $66,000, and 100 percent of corporate income, this adds to $6.5 trillion; still short by $1.5 trillion. Financing the real obligation with more debt, as we do now, exceeds the entire world’s credit-market capacity. Still think taxing the rich will take care of things? The fiscal cliff is only the beginning.