Beware! 30% Tax Hike Coming!

Yesterday, we wrote about several damaging Congressional Budget Office (CBO) reports. Today, we’ve learned that, according to the CBO’s Budget and Economic Outlook, taxes are set to increase by over 30% over the next two years:

“In particular, between 2012 and 2014, revenues in CBO’s baseline shoot up by more than 30 percent mostly because of the recent or scheduled expirations of tax provisions, such as those that lower income tax rates and limit the reach of the alternative minimum tax (AMT), and the imposition of new taxes, fees, and penalties that are scheduled to go into effect.”

Oh, and guess what? The economy will remain sluggish partly because of the higher taxes:

“The pace of the economic recovery has been slow since the recession ended in June 2009, and the Congressional Budget Office (CBO) expects that, under current laws governing taxes and spending, the economy will continue to grow at a sluggish pace over the next two years. That pace of growth partly reflects the dampening effect on economic activity from the higher tax rates and curbs on spending scheduled to occur this year and especially next. Although CBO projects that growth will pick up after 2013, the agency expects that the economy’s output will remain below its potential until 2018 and that the unemployment rate will remain above 7 percent until 2015.”

Now, the report seems to be saying that current spending cuts will hurt the economy. If memory serves me correctly, spending increased dramatically over the past several years and our economy is still struggling. And if we continue on our current path, our economy will move toward a total, Greek-like collapse.

We cannot allow the left to use these numbers to mislead the America people by telling them that all we have to do is trim around the edges, drastically raise taxes and we’ll be fine. We’re spending $1 trillion more than revenues bring in. No amount of tax increase on just the wealthiest Americans can close that gap (the estimates by CBO include dramatic tax hikes on middle-income Americans). In fact, even a massive tax increase on them and nominal spending cuts won’t solve the problem.

We need to stop the reckless spending, plain and simple. Continuing on the current path of high taxes and even higher spending will lead to a European-style collapse. Can we afford that?

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