At the edge of the fiscal cliff, policymakers and pundits are looking for answers to the question about what to do on Jan. 2, 2013. On that day, barring action by Congress, taxes — such as the personal income, payroll, capital gains and estate taxes — are scheduled to go up by a significant amount. Federal spending is also set to be cut, through automatic across-the-board reductions (sequestration).
Both parties are irresponsible. The data show that we cannot tax our way out of this mess. Even if all taxes could be raised without a negative impact on the economy, the resulting revenue wouldn’t be enough to address our future debt problem. In other words, the Democrats’ call for tax increases on the rich alone is more political posturing than a serious proposal.
