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Why We Have a Fiscal Cliff…

December 2, 2012

If you are tired of hearing about the “Fiscal Cliff” – you are not alone.  But, I think it is instructive to look at why we have a structural problem of not bringing in enough revenue to run the government and cover our liabilities.  A big part of this problem is NOT, I repeat NOT greedy teachers, and police officers, and public sector workers of all stripes!

It is because (as the graphs below show), we have steadily been bringing in less revenue through income taxation, especially on the wealthy.  My solution is simple, taxes need to be returned to where they were under Bill Clinton, tax loopholes and off-shore bank accounts designed to shelter income from taxation need to be policed and closed, and the cap for paying into social security needs to be raised to at least $250,000 – this alone would fund Social Security out for a hundred years.

Graphs are courtesy of the New York Times:

Tax rates have fallen for all brackets, especially for the wealthy.

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