There are two myths behind Democrats’ insistence that taxes should be raised to reduce federal budget deficits.
The first myth is that higher taxes lead to a net increase in government revenue. In fact, they often bring in less revenue. That’s because they choke off private-sector economic growth and thus shrink the economic base on which taxes are collected. The history of our nation’s tax increases provides ample evidence of that – and evidence that tax relief expands growth and ultimately brings in greater tax revenue from a broader economic base.
But just for the sake of argument, let’s pretend that tax increases could somehow be accomplished without hurting economic growth, and would simply be “free money” the government could use to reduce the deficit.
That’s where the second myth comes in: the myth that extra revenue from tax increases would actually be used to reduce deficits.
Look at our current federal budget, which has our nation spending about $1.5 trillion more, through borrowing, than it is raising in taxes that are already too high. Now consider our massive $13.2 trillion national debt, on which we must pay hundreds of billions of dollars in interest every year.