Want an interesting thought experiment? Take a trip in a liberal dream world of total wealth confiscation, where for one year, politicians confiscate profits from major corporations, professional athletes, Hollywood, and the like—all in the name of paying for their big spending ways. Would it be enough? Watch the above video to find out.
President Obama would like you to believe that taxes will save the day. Amid the ongoing debt limit debates, raising taxes (or “increased revenue,” as he likes to call it) is his magic bullet for plugging the holes in America’s sinking fiscal ship. He even offers up his own income as a sacrifice, saying that he can afford to pay more in taxes “because a lot of folks bought my book.” And he tries to bring other millionaires along for the ride, like when he joked with the inventor of Twitter that he can give more to the government because his company “has done pretty well.”
The reality, though, is different. No amount of taxation would be enough to foot the bill for the level of spending the President wants. Here are a few things to keep in mind.
For starters, the wealthy already pay a ton in taxes. The top 10 percent of income earners—those making more than $113,799 in 2008 (the latest year available from the IRS)— pay 69.9 percent of the nation’s income taxes (as Heritage’s Patrick Tyrrell details here in great depth).
And back in October 2010, Heritage’s Curtis Dubay took a look at what it would take in taxes to pay the President’s bills. He found that in order to close the more than $1 trillion deficit Obama’s spending would produce in 2020 by taxing only the rich, it would require a top income tax rate of 134 percent. Dubay warns:
Of course it is impossible to tax more than 100 percent of any taxpayer’s income. More importantly, any rate even approaching such a dangerous level would destroy the economy. Period. So even if it were mathematically possible to tax more income than the rich earn, there would be none of it left for the government to confiscate.
As much as he would like to, the President just can’t tax his way out of America’s spending problem.