Why Higher Taxes Won’t Save Us

The idea that higher taxes on the wealthy are a cure-all for society’s woes is a dangerous myth. It won’t work. Why? Because math.

The annual Federal Budget deficit is around $1 trillion.

That’s about 5% of GDP. Not a huge problem in and of itself. But we have current debt that’s larger than GDP. And no matter what tax regime we’ve had over the past 100 years, the US Treasury has NEVER been able to capture much more than 18% of GDP.

Yes, even during the hallowed days of 90% marginal tax rates, the Treasury’s take was about 18%.

AND the cost to service this debt is projected to skyrocket within the next decade.

That’s because we’re going further into debt every year, and the interest is compounding against us. THAT’s because we’re only ever making payments on interest — and we’re adding our interest payments as debt!

It’s like paying down a credit card with a credit card. It gets you through the month but it makes your long term situation much worse.

By 2026, the Congressional Budget Office says we’ll be adding nearly $1 trillion to the debt in INTEREST alone.