“It’s hard to imagine that spending restraint alone can solve America’s long-run fiscal woes. Facing an aging population and rising health care costs, the federal government will continue to expand even if policymakers take serious steps to trim spending,” wrote Marron in an analysis this week. “Cutting back on loopholes and other tax expenditures, taxing carbon emissions, introducing a value-added tax – all of these deserve attention in case America decides that it wants to finance a substantially larger federal government.”
But Republicans question why Democrats would effectively increase taxes when the economy is in the pits and millions of Americans are out of work. The answer is simply because they believe that higher taxes don’t curb growth. That’s the root of the problem, says Moylan.
“We could eliminate our deficit and create a surplus tomorrow by enacting a $2 trillion tax hike immediately, but that wouldn't be responsible and it sure wouldn't be smart,” he said. “Seeing as the federal budget has doubled in little more than a decade, it's clear that Washington has a spending problem, not a revenue problem."