Many are proposing that tax rates for upper-income earners go back to their levels during the Clinton Administration. What you don’t hear is how we can return to Clinton-era spending levels. That would be a real solution to the upcoming fiscal crisis, and the President could lead the way.
The President says he wants Clinton-era marginal tax levels for families and small businesses earning more than $250,000 a year ($200,000 for individuals). However, tax rates for these earners would actually go up much more because of Obamacare tax hikes already signed into law.
Never mind that this would slow growth and hurt job creation. And no, these tax hikes won’t balance the budget—not next year, not the year after, not ever. Under Obama’s budget, federal debt would continue growing by $7.7 trillion even if the President gets his favorite tax hikes.
The debate over tax hikes is just a distraction from what is really going on: Washington has a spending problem, not a revenue problem, and President Obama is at the helm. According to the White House Office of Management and Budget, President Obama’s two-term average spending level is projected at 23.4 percent of gross domestic product (GDP).