People have long known that President Obama's plan to increase income taxes on higher-earning individuals is a budgetary nonsense as there simply are not enough people making more than $200,000 and families making more than $250,000 to bring the deficit down in a meaningful way.
In an important followup to this point, the Wall Street Journal looks at how the only way for the federal budget to even begin to move away from deficits is through either spending reductions (anathema to the left) or tax increases. There is no alternative to raising taxes on the middle class if the budget will not be reduced:
Democrats do have a plan, kind of. As debt continues to build, at some point U.S. creditors will lose confidence in the Treasury's ability to repay. Then Democrats and even some Republicans will impose a European-style value-added tax or another money machine to appease the bond markets.
What voters should know is that this taxing big bang won't only hit the affluent. Far from it. For evidence, consult a recent study by Eric Toder, Jim Nunns and Joseph Rosenberg of the Tax Policy Center. We know this Brookings-Urban Institute shop has credibility with liberals, because it is the source of the fiction that the Romney-Ryan team wants to boost middle-class taxes.
The researchers looked at how high income-tax rates would have to rise in the top two or even three tax brackets to lower debt to sustainable levels under something akin to CBO's alternative fiscal scenario. They conclude that even if the top rates hit 100%, the budget "cannot achieve the debt-reduction targets in some or any of the target years." Though conceding that near-total confiscation is "completely unrealistic," they report the results anyway "to indicate the infeasibility of achieving a high debt-reduction target simply by increasing top individual income tax rates." And this is from economists who favor higher taxes. [...]
Another way of putting it is that the rich aren't nearly rich enough to finance Mr. Obama's spending ambitions. Sooner rather than later, Washington will come for the middle class, because that's where the real money is.