Solely taxing the rich and corporations isn't enough to stop deficit spending, spending cuts would be needed as well. In the US, if you taxed the top 1% at 100% (and it somehow didn't have massive second order effects) you would only generate about $800 billion in tax revenue. Current federal tax revenue is about $3.7 trillion, and a decent chunk of that is already coming from the wealthy and corporations. The current federal budget is around $6 trillion. And individual states, counties, cities, and other entities like school districts and water boards also still need tax revenue too, mind you.
Regardless of one's feelings on raising taxes, solely raising taxes is simply not enough to get rid of deficit spending. Pretty much all governments (and all western governments especially) spend far more than they can bring in as revenue. This ends up getting paid for long term by the general public in a lot of different ways, such as inflation, bankrupt retirement and healthcare programs, and more.
> Pretty much all governments (and all western governments especially) spend far more than they can bring in as revenue.
No, they tax the rich and corporations way too low. Back in the 70s/80s, in Germany almost every little village had enough tax base to fund the construction and operation of swimming halls, there were massive buildouts of all kinds of infrastructure from railways over highways to gigantic airports, everyone got decent streets, electricity, water, phone lines and other utilities. All funded with taxpayer money, as investors in infrastructure simply were not a thing, not even legal.
Then in the 90s, neo-liberal privatization vandals sold off everything to the highest bidder, and now the owner class keeps skimming off profits while socializing losses (e.g. by having the government pay for Kurzarbeit/paycheck protection programs) in crisis time.
Additionally, the CEO wage gap exploded - from 20:1/1965 and 58:1 in 1989 [1] to 670:1 last year [2], and on top of that comes crap such as share buybacks which only serve to benefit the elites.
> Additionally, the CEO wage gap exploded - from 20:1/1965 and 58:1 in 1989 [1] to 670:1 last year [2], and on top of that comes crap such as share buybacks which only serve to benefit the elites.
Wow, it was already 300:1 a few years back (2014 iirc), that's so sick it still managed to double…
Top 1% of what, earners? Is this just 100% on their income? Does it include capital gains? Does it include corporations? Be clear about what you're hypothetically taxing so we can discuss what else is being left on the table. I'm sure the answer is "a lot", despite the severe sounding "100%".
Keep in mind that for every 1% of GDP of public spending you cut, you're going to cut GDP by a little more than 1% (more like 1.2%), which will then cut the federal revenue by an additional .3% of GDP.
You just cannot cut spendings during a recession unless you want to go straight to disaster. Greece is a great example of that.
> In the US, if you taxed the top 1% at 100% (and it somehow didn't have massive second order effects) you would only generate about $800 billion in tax revenue.
Which also means that by getting back to the post New Deal tax level (~80%) on those people alone, you'd get $640 billion! And I'm not talking about some communist fantasy (like your 100%), I'm talking about Nixon's tax policy!
Having done so in the decade prior to the pandemic would have massively improved things with regard to the current federal debt.
And how about taxing fortune 500 companies to the levels they're supposed to be taxed? That's also hundreds of billions missing every year.
> Regardless of one's feelings on raising taxes, solely raising taxes is simply not enough to get rid of deficit spending.
But that's just factually not true! even with the mere tax experiment I did above (that is, without making Apple pay their taxes) you can bring the US budget close to an equilibrium in the 2000-2020 era, despite the 2008 crisis and its costs!
That's OK if a government runs a budget with a deficit during a crisis (like the pandemic, or financial crisis), it's not OK that the US (and most western governments actually) have been running with a deficit during the 2012-2020 era, because of tax cuts on the wealthiest. That's how we ended up where we are now.
Government deficit are a political choice, since the 80s we've decided to borrow money instead of getting it trough taxes, but the money was there all along.
Regardless of one's feelings on raising taxes, solely raising taxes is simply not enough to get rid of deficit spending. Pretty much all governments (and all western governments especially) spend far more than they can bring in as revenue. This ends up getting paid for long term by the general public in a lot of different ways, such as inflation, bankrupt retirement and healthcare programs, and more.