"Right now, taxes are at unsustainably low levels."
That's the message from the Washington Post's Ezra Klein, who adds:
Reform will have to get them somewhat higher. But if we end up asking Congress to choose between the current tax code with the Bush tax cuts and a reformed tax code without them, the latter will look like a huge tax hike. That'll make reform more difficult to pass, or it'll force us to pass a reform that doesn't raise any more money than the tax code with the Bush tax cuts. As you can see from the Center for Budget and Policy Priority's debt graph above, that's not a good situation.
What passes for wisdom in DC is beyond me.
Here's a thought experiment: Let's retitle the piece "Right now, government expenditures are at unsustainably high levels."
Which they are. Since the 1950s, federal revenue as a percentage of GDP has clustered around 18 percent, despite endless attempts to squeeze more money out of the economy and into government coffers. The great variable in the federal balance sheet has been spending, not revenue. Debt comes from spending more than you have, not from having too little. Does anyone really believe that the feds (or the states, who have similarly overspent for years) have been frugal or wise or cheap in their spending decisions since the Truman administration?
Another thought experiment: Pretend you live in a world where the government raises taxes by 100 percent and that hike has no effect on economic activity (yes, a dream world inhabited by all too many people). So the government gets oodles and oodles more money. How many years do you think it would be before the government was once again broke? One or two? Three or four? Five?
Spending is the problem, not revenue. And cutting spending is the solution, not raising revenue.