Tackling Debt and Deficit through Increased Taxes

Last updated on March 6, 2022

To tackle the U.S. deficit, taxpayers are being asked to pay more in taxes. That and spending cuts are the only solutions to resolve the deficit that Washington has offered. President Obama admits that there still is no long-term plan for introducing tax reforms for beating the deficit and the debt.

An increase in taxes is not a healthy solution to the deficit problem even if it is designed to increase the revenue the government brings in. Tax increases hit both businesses and individuals, possibly stunting recent economic growth, no matter how minimal. President Obama and Democrats in the Senate are calling to increase the tax rates for the rich, reverting back to the rates from the 1990’s.

“The deal we are about to strike will raise taxes on the rich. But, the fiscal imbalances we face remain unsatisfactorily large. So, I will ask for more tax increases on the rich later,” Obama said. Democrats are looking to resolve the deficit through spending cuts and increased revenue, but are reluctant to ask average taxpayers to pay more in taxes.

Still, uncertainty looms over how Congress will help remove the country from debt. Except for short-term solutions, such as increased taxes for the rich, there have come no proposals for tax reforms that have advanced in any chamber of Congress.

Raising taxes on the rich might not find opposition from the general public because they are in the minority, but what needs to be looked into is how much the country will benefit from it.