I will be the Dirty Old Man in the scenario, and state that this is not only true, but what should occur. We need higher taxes, and more on the order of 26%, than on the order of 10%. Our dear President and Congress should grow a Pair, and start to straighten out the Mess. There are a number of reasons for that Statement, and I will try to explain; forever engendering the anger of Conservatives and Business. I will want to present the ideation that Government makes a poor Consumer of Last Resort, and Congress and President should be enticed to spend much less, which they will not do unless Taxpayers are actually pressured by taxation.
1) There is an increasing lack of validity to Government expenditures, unless they are paid for; a good Case in Point being an individual I know who had never made more than $20k in his entire 45-year Work life, but already has had over $2m in health care courtesy of the Government. Medicare and Health Care in general are the most tense Subjects in the federal budget, but has to be addressed.
2) Government Spending is the only source of Inflation today, and Bernanke is hot to maintain the Inflation–entirely the wrong idea. Inflation will pick up again, and come from its natural source; this being a boom in the economy. The Problem here is that Inflation will pick up far faster than the Fed can get out of the economy once it starts–think 18 times faster–and removal will have the same flavor as the sunset of the Bush Tax Cuts.
3) We are destroying the reconstructive ability of the US Dollar which will destroy the Wage platform of Americans, not only smashing the current suppressions of Inflation, but Savings, Capital accumulation, and Service payments. Try paying the Plumber $2000 for a Job that he wanted $200 for in 2005.
4) The above payment would be fueled by higher Capital Costs, higher Operating Costs, higher Insurance premiums, and only a small increase in Taxes.
5) My example gives a good Accounting of what I describe: Top-Down Inflation is worse than Stagflation or Deflation, where Corporations bully their way to Inflation elimination, but only by destruction of the business format under which Small Business must operate.
I here call for a automatic 21% flat Tax Assessment against all Income, all reductions of Such only to granted upon filing a Tax Return, then paid only in some form of US Treasuries. FICA taxes will be included as applying to the Assessment level of taxation, and the Assessment will not mean a limitation to the total Tax burden eventually collected. It simply means that the federal government is collecting enough tax revenues to pay the Cost of their Expenditures, and giving back only Funny Money which Taxpayers must unload on Someone for Cash. I guarantee that such a Process will lead All to be more Budget Conscious. lgl