I just heard Obama guarantee that no one making less than $250,000 a year will pay a dime in higher taxes for the budgets he is proposing. He said he would be rolling back the tax cuts for the wealthiest 2% of the American people.
The top 1% of all taxpayers currently pay about 40% of the income taxes. So what Obama is saying is that that is not enough. The wealthy need to pay more.
And he is also saying that the other 98%, who are getting all the goodies are going to get it for free.
This process cannot be sustained.
UPDATE: Just to make it clear–I'm talking about the extra goodies Congress just passed, $787 billion. The way I understood Obama tonight is that the bill for that will not require the bottom 98% to pay higher taxes. That's what's unsustainable–giving 98% of the population a free lunch at the expense of the top 2%. Because why stop at an extra trillion. How about two trillion? It's the political economy that's unstable, not higher marginal tax rates. It's not higher marginal rates that are problematic, it's ZERO perceived marginal rates. Yes, I know about the payroll tax. I've written here many times about why the income tax is not an accurate measure of tax burden. But it may be an accurate measure of perceived tax burden as I argue here.