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Thursday, August 6th, 2009 | Health Care, Politics, Social Security |

Washington Times - Congress in Fantasyland:

The Congressional Budget Office projects a total additional deficit of approximately $4.9 trillion dollars during President Obama’s first term (2009-2012). Currently, the top 1 percent of taxpayers pay 40 percent of the tax, or $450 billion a year, or approximately $1.8 trillion dollars during the next four years, leaving a $3.1 trillion hole. Increasing the tax rate on those high earners to 100 percent might yield an additional $1.5 trillion the first year, but this will only work for the first year. Most people, after being taxed 100 percent on their income, will quit work and/or put their investments in nontaxable entities, such as tax-free local government bonds.

It is also not mathematically possible to take care of all the new spending by increasing taxes on the top 5 percent of taxpayers (those making $160,000 or more annually) who already pay 61 percent of the federal tax (or $676 billion per year). Most of these people are now paying close to the revenue maximizing rate, which means that any increase in their tax rate is unlikely over the long run to bring in much more tax revenue

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